Senate approves bill changing state's approach to employee health care premiums

SANTA FE — Amid rising health care costs, the Senate voted Tuesday to approve a bill revising New Mexico’s insurance plan for more than 36,000 state and judicial branch employees.

The bill, Senate Bill 376, would set the state’s portion of all employees’ health care premium costs at 80% — the amount currently depends on a worker’s income level — while also establishing new pricing guidelines.

Backers described the changes as necessary to avoid big annual health care deficits, as Gov. Michelle Lujan Grisham’s administration has kept insurance premiums for state workers flat even as health care costs climbed during the COVID-19 pandemic.

“It’s a cost containment that has to happen in New Mexico,” said Sen. George Muñoz, D-Gallup, who warned the state would continue to face $100 million-plus liabilities every year under the current approach.

But Senate President Pro Tem Mimi Stewart, D-Albuquerque, described the bill as unfair, since it would apply to state workers but not teachers and school employees.

“It’s just really kind of outrageous to begin fixing our health care system on the backs of the lowest-paid workers in the state,” Stewart said during Tuesday’s debate.

The bill advancing at the Roundhouse is backed by the Governor’s Office, with Lujan Grisham saying last month it would fix longstanding issues with the state’s health plan and ultimately reduce employee premiums.

It would specifically accomplish that in large part by diverting money from a state health care affordability fund created in 2021 to help New Mexicans access health coverage under a federal exchange.

That fund would be tapped to pay off an existing $68 million shortfall and, going forward, to subsidize health premiums for state workers who make less than $50,000 per year. Health care coverage would also be provided for more than 560 New Mexico National Guard members who do not have insurance, said Sen. Liz Stefanics, D-Cerrillos.

But Stefanics said it would be up to New Mexico cities and counties to set their own rates for health care premium contributions for their employees.

A judge recently barred a state agency from levying retroactive assessments on local governments to help cover a deficit in the state health insurance benefit fund.

The bill ultimately passed the Senate on a 36-2 vote, with Stewart and Sen. William Soules, D-Las Cruces, casting the two “no” votes.

It now advances to the House of Representatives with less than two weeks left in this year’s 60-day legislative session.