The state intends to have a New Mexico-run insurance exchange ready for small businesses to shop for coverage for their employees this fall and will use a federally operated exchange to offer medical insurance plans to individuals for the next year, Dr. J.R. Damron, chairman of the exchange’s governing board, said Monday.
A law was enacted earlier this year to create a state-run exchange for individuals and small businesses.
But a “hybrid” approach to the exchange, Damron said, is necessary because the state doesn’t have enough time to implement its own computer system to serve individuals by a looming federal deadline.
Federal law called for states to have exchanges ready to enroll the uninsured in October and be fully operating by January. States had the option of establishing their own exchange, leaving it to the federal government or developing a state-federal partnership for some operations
Although New Mexico will rely on the federal exchange for enrolling uninsured individuals until October 2014, the state will determine the health benefit packages that are offered to individuals and will regulate prices charged by private insurers for those insurance plans.
“The state of New Mexico is different than Massachusetts or California or whatever. Our prices will be different. The feds will use our prices not someone else’s prices,” said Damron, a Santa Fe physician.
New Mexico also will continue to handle some of the responsibilities of an exchange for individuals, such as outreach, education and marketing to make residents aware of their options in obtaining medical coverage through the online marketplace.
The 13-member governing board voted last week to partner with the federal government because a computer system needed to enroll individuals will take more time to establish and is more complicated than what’s necessary to offer online insurance shopping for small businesses, according to Damron and board vice chairman Jason Sandel of Farmington.
The individual exchange will not only need to allow people to shop for insurance plans, but also must connect with other government systems that will determine whether someone is eligible for a federal tax credit to help pay for insurance or qualifies for health care through Medicaid, which is jointly financed by the state and federal government.
Sandel said the state had little choice but to partner with the federal government but he’s worried that New Mexicans may face problems with the federal exchange.
“Obviously my concern is that where an individual signs up and has a bad experience, and then we lose them forever,” Sandel said in a telephone interview. “If we lose people in this process, whether it be because of bad customer service or language barriers or just a lack of understanding of what our unique needs are, then we’ve have kind of defeated the purpose of the entire reform.”
Nearly 200,000 New Mexicans may be able to buy health insurance through the exchange by 2020.
The board has agreed to contract with Palo Alto, Calif.-based Getinsured.com to build and maintain the computer system needed for the New Mexico exchange. The five-year contract is worth nearly $40 million. The state has received a $34 million federal grant for an exchange and may be able to qualify for more federal assistance. The board also can impose fees on insurers to help cover costs of the state-run exchange.