By Winthrop Quigley
Journal Staff Writer
Mimi Stewart had listened to almost four hours of testimony Saturday, the third of three days of hearings last week on different approaches to bringing health-care coverage to New Mexico's 400,000 people without insurance.
"There is no consensus," the Albuquerque Democrat said, not on the committee, not in the hearing room and not among the public.
Based on the testimony, New Mexicans say they support universal coverage but can't agree whether that is best done by using the private, for-profit insurance industry that has been the norm in the United States since the 1940s, or replacing insurance with some variant of a single-payer system that would establish some kind of governmental control on health-care costs and financing.
Last week's testimony shows the divide comes down to this: Do New Mexicans believe profit-motivated competition in the health industry helps or hurts care?
The House Health and Government Affairs Committee, chaired by Stewart, is the first stop for the competing universal coverage bills. If any or all of them survive Stewart's committee, they go on to at least one other House committee.
Greater Albuquerque Chamber of Commerce President Terri L. Cole also doubts consensus can be reached. She told the Journal's editorial board that since people can't agree how health care should be paid for, the next best thing is to follow the lead of Gov. Bill Richardson, whose health-coverage plan is not perfect but is at least reasonable, feasible and preserves private insurance.
At one of Stewart's hearings, state Health Secretary Alfredo Vigil listed the half dozen or so committees, commissions and task forces he has personally served on over the years, each one chartered to find a way to end the uninsured problem in New Mexico. Consensus eluded every one of them, including the most recent, last year's Health Coverage for New Mexicans Committee.
That committee was to find an objective way to evaluate which approach to universal coverage made the most sense. An out-of-state consulting firm found that a single-payer approach called the Health Security Act would insure the most people at the least cost. That was largely because the analysis included elimination of the administrative cost associated with insurance and assumed that a commission the act would form to control costs would be better at negotiating lower rates with medical providers than insurance companies have been.
Insurance industry people vehemently objected to the analysis. They said the consultant vastly overstated the non-medical costs associated with private insurance in New Mexico. They argued that in a state with chronic medical provider shortages, the odds of a governmental or quasi-governmental agency obtaining better prices were zero.
Financial disclosures required by the State Insurance Division show that in 2007 the four insurance companies that dominate New Mexico's market collected a total of about $2 billion in premiums, spent $1.7 billion of it on health care, paid about $80 million of the premium to the state in taxes and kept profit of about $70 million. The rest went to administrative costs, insurance broker commissions and other nonmedical expenses.
Health Security Act supporters testified Saturday that industry profits are too high, that health-care costs are higher because of insurance companies, that insurance companies routinely keep people from getting needed care, and that the cost of insurance is the reason so many people are uninsured.
Single-payer opponents said that because insurance companies have to fight for customers, competition keeps costs as low as they can be and quality higher. They warned that giving control to a single payer, however it is organized, will drive medical providers out of New Mexico. They said competition among insurance companies is responsible for much of the innovation in care, including disease management and corporate wellness programs.
In addition to the Health Security Act, the committee is considering Gov. Bill Richardson's Health Solutions plan. Richardson would keep private insurance intact because, he said, it covers 80 percent of the state's population successfully. He would require companies to guarantee they will insure anyone, regardless of their health. He would limit price increases on small groups.
The plan also requires the state to move toward community rating, which means prices for insurance would no longer be based on the costs and medical experience incurred by a company or class of companies buying insurance or on the health status of an individual. Instead, prices would be set by the status of everyone in the state.
Companies have said they can accept those requirements if another Richardson requirement— that everyone who can afford insurance is required to buy it— is also implemented. Otherwise the plan won't work financially, they say.
A third bill, sponsored in the House by Rep. Danice Picraux, D-Albuquerque, delays a decision on the financing issue. It would establish a health-care authority responsible for coming up with a universal-coverage strategy for the 2009 Legislature to enact.
Richardson's bill has an authority, too, but his would implement the financing plan his Health Solutions measure describes in some detail, including expansions of public programs to cover more people.
The difficulty with Picraux's bill is that, unlike Richardson's plan and the Health Security Act, it does not tell the authority what, in the opinion of state government, health financing reform looks like. Without that direction, all options would remain on the authority's table and another hunt for consensus would begin.
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