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Study: More money likely to be needed for universal health care

Consultants have outlined for New Mexico’s Democratic-led Legislature the financial consequences of adopting a state-administered universal health insurance program for all residents.

The final report, commissioned by lawmakers in 2019, says that such a system would improve affordability for low-income households. However, premiums for other families, employer contributions and payroll taxes likely would go up to pay for what could be as much as a $5.8 billion shortfall for the program over the first five years.

In addition to employer contributions and higher premiums, the report says, most of the cost could be financed by redirecting public funding from duplicative health programs.

“Still, additional funding sources may be needed to fully cover the cost of the program, depending on the structure of the plan,” the report says.

The analysis by Maryland-based KNG Health Consulting says that New Mexico’s effort to shift to a single-payer system would be the most ambitious state-based health care overhaul ever carried out in the U.S. and that the state’s uninsured rate would likely fall below 1%.

It also says that the use of health care services would likely increase as the vast majority of residents turn to public insurance.

Under a state-administered plan, some segments of the private insurance industry would disappear, resulting in financial hardship to New Mexico households and businesses that are dependent on the industry, the report says.

The study looked at four scenarios that included a range of premium and cost-sharing alternatives. Two of the scenarios also relied on stemming the growth of provider and hospital reimbursement rates.

The effect on employers would depend on how policymakers implement contribution requirements, including the level of contribution and which employers would be exempt, the study says.

While the goal is to have all New Mexicans insured, the study acknowledges that the gains in coverage may be overstated because many uninsured residents are already eligible for Medicaid.

Several states have contemplated universal health care as they deal with legal and financial hurdles while seeking to consolidate federal tax subsidies, and spending on Medicare, Medicaid and health care exchanges.

New Mexico cut its uninsured rate roughly in half by expanding Medicaid to more people on the cusp of poverty in 2014 during Republican Gov. Susana Martinez’s tenure.

Enrollment leveled off in recent years, with about 10% of the population still uninsured.

Democrat Gov. Michelle Lujan Grisham has said that access to high-quality and affordable health care is “a non-negotiable priority” for her administration.

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