Insurance premiums fall as NM prepares new subsidies for '23 - Albuquerque Journal

Insurance premiums fall as NM prepares new subsidies for ’23

SANTA FE – Health care access is getting substantially less expensive for consumers on the state’s health insurance exchange through a combination of federal pandemic relief, a growing pool of subscribers and – coming soon – proceeds from a new state tax, insurance regulators told a panel of legislators Thursday.

State lawmakers this year approved a tax increase on a wide range of health insurance premiums, starting on Jan. 1, 2022. That will help underwrite health-exchange insurance offerings for low- and moderate-income individuals along with employees at small businesses, starting in 2023.

Federal pandemic relief already has substantially reduced the cost to consumers of monthly insurance payments, with the average premium on the state exchange falling from $195 in late 2020 to $139 in 2021. Heavily discounted premiums were aggressively marketed during a six-month special enrollment period that ended on Aug. 15.

State health exchange CEO Jeffrey Bustamante and state insurance Superintendent Russell Toal briefed a panel of legislators Thursday on the shifting financial landscape for access to medical care.

Several legislators – Republican and Democratic – remained wary of the 2.75% tax increase on insurance policies, warning it may be passed on to businesses and consumers by health insurance companies with unintended consequences. Insurance officials say the major brunt of the tax increase will fall on managed care organizations that provide Medicaid insurance.

At the same time, state House Majority Floor Leader Javier Martínez, D-Albuquerque, provided a full throated endorsement of the initiative, saying it promises to help break the costly and brutal cycle of providing medical care to the poor through emergency room visits.

“This isn’t to punish those of us with health insurance,” Martinez said. “This is to ensure that those that don’t have access can access health care. … This is one of those rare moments when this Legislature has actually taken a leap of faith, a very well-informed and data-driven leap of faith.”

Across New Mexico, about 214,000 residents remain uninsured among a statewide population of 2.1 million. About half of those uninsured residents qualify for assistance through Medicaid or subsidized insurance policies sold on the state exchange, Toal said.

Bustamante, who oversees New Mexico’s insurance exchange, said about 60,000 people are likely to exit Medicaid insurance next year as special federal pandemic provisions expire. Many are likely to seek out new insurance policies on the state exchange.

Under the Affordable Care Act, New Mexico cut the number of uninsured residents in half with the expansion of Medicaid.

Legislators have laid the groundwork to extend insurance further though financial subsidies and incentives, while shunning proposals to provide universal insurance through a state-run, single-payer system.

The state’s increased tax on health insurance premiums is expected to generate about $280 million annually. More than half the money initially goes toward health exchange subsidies.

Toal said that federal pandemic aid has successfully lowered monthly insurance premiums. He said the state’s new mission is to reduce other “out-of-pocket” insurance costs such as per-visit charges to physicians and “deductible” amounts that people must spend before insurance policies pay for some or all of claims.

“If you’re a low-income family, you’re faced with almost $8,000 worth of out-of-pocket costs for your insurance. You’re not going to purchase that insurance,” he said.

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