NM health insurer to close at end of 2020

Marlene Baca

New Mexico Health Connections will close its doors at the end of the year, citing declining membership during tough economic times.

“It is with deep sadness that we have to come to this conclusion and make this announcement,” Marlene Baca, CEO of New Mexico Health Connections, told the Journal on Tuesday. “We wish that things would have been different.”

The nonprofit healthcare organization notified providers Monday that it will no longer offer health insurance policies after Dec. 31, and will cease operations on Jan. 1, 2021. Baca said members enrolled in Health Connections’ plans may shop for a new plan for 2021 during the upcoming open enrollment period.

Health Connections, one of four remaining health insurance cooperatives established in conjunction with the federal Affordable Care Act, has had its fair share of financial challenges. In 2017, the organization sold its small and large group business lines amid concerns about its financial solvency.

More recently, Baca said increased competition and the financial downturn associated with the COVID-19 pandemic have hurt the organization’s membership. Due in part to mass unemployment, Baca said some members have opted to enroll in Medicaid instead, part of a nationwide shift.

Because of that, Baca said Health Connections’ enrollment, which stood at approximately 17,000 prior to 2019’s open enrollment period, has shrunk to around 14,000.

As a smaller health plan that offers exclusively individual plans, Baca said the organization found it challenging to stay competitive.

“When you’re really competing against the bigger players in the marketplace, it’s kind of difficult for you to be too aggressive with pricing,” Baca said.

In a prepared statement, Superintendent of Insurance Russell Toal thanked Health Connections for its years of service, but added that New Mexicans will still have plenty of options for health insurance going forward.

“Even with the departure of Health Connections, this fall New Mexico will have more health insurers offering plans in the marketplace than ever before,” Toal said.

Health Connections will continue to accept claims for dates of service through Dec. 31, and is asking providers to continue treating members as they have been under the existing terms of their agreement.

Baca said the organization is sending letters to members informing them of the change. In the next three to four weeks, members should expect to receive a more detailed letter that informs them what health plan they have been assigned to.

However, Baca and Toal each encouraged New Mexicans to shop for health plan options during the upcoming open enrollment period, which runs from Nov. 1 through Dec. 15.

Baca encouraged members or providers with questions to call the organization at 1-866-668-9002.

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