SANTA FE — New Mexico would raise a state health-insurance tax and dedicate the new revenue to programs intended to make health care more affordable under a proposal that passed the state House on Sunday.
Rep. Deborah Armstrong, D-Albuquerque, described the legislation as an unusual opportunity to generate more revenue for health care without increasing the total amount consumers now pay.
The increased state tax would partially replace a federal tax that’s being repealed, she said, meaning health insurance carriers would actually be charged less in taxes than they are now, even after the state increase.
The legislation, House Bill 278, would raise about $125 million in annual revenue when fully phased in — the bulk of it dedicated to a new fund for health care affordability, according to legislative analysts.
Republican lawmakers slammed the bill, describing it as an unfair attempt to take advantage of federal tax relief. The savings of the repealed federal tax, they said, should be passed on to consumers.
“It’s something that would be much appreciated by the taxpayers,” Rep. James Strickler, R-Farmington, said.
Armstrong argued the proposal would allow New Mexico to launch programs aimed at more broadly reducing the cost of health care — perhaps through lower deductibles or copays for some New Mexicans.
There could also be efforts to make health insurance affordable enough to attract people who are now uninsured — a move that would help keep families healthier and reduce health costs for everyone, Armstrong and other supporters said.
“This bill is one of the most direct actions we can take to lower healthcare costs for New Mexican families,” Armstrong said in a written statement. “A maternity check-up or emergency room trip with a sick toddler should not throw families into debt.”
House Bill 278 passed the House on a 41-25 vote and now heads to the Senate.