NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the
legislature. The Legislative Finance Committee does not assume responsibility for the accuracy of the information
in this report when used in any other situation.
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F I S C A L I M P A C T R E P O R T
SPONSOR: |
Maes |
DATE TYPED: |
03/06/01 |
HB |
|
SHORT TITLE: |
Minimum Health Care Protection Act |
SB |
439/aSFL#1 |
|
ANALYST: |
Valenzuela |
APPROPRIATION
Appropriation Contained
|
Estimated Additional Impact
|
Recurring
or Non-Rec |
Fund
Affected |
FY01 |
FY02 |
FY01 |
FY02 |
|
NFI |
|
|
|
|
(Parenthesis ( ) Indicate Expenditure Decreases)
SOURCES OF INFORMATION
Public Regulation Commission (PRC)
Health Policy Commission (HPC)
Attorney General's Office (AG)
SUMMARY
Synopsis of SFl#1 Amendment
SB439/aSFL#1 deletes the section of the bill that does not allow a carrier, agent or broker to
enroll an individual or group member in the comprehensive insurance pool (CHIP) or the health
insurance alliance if that person is eligible for a policy under the Minimum Healthcare Protection
Act.
SB 439/aSFL#1 will allow a person who needs the higher level of health care benefits to acquire it
if they can afford to do so.
Synopsis of Original Bill
SB 439 eliminates the six-month waiting period of the Minimum Healthcare Protection Act and
clarifies the criteria to apply for small group rate and renewability.
SB 439 prohibits New Mexico insurance carriers, agents or brokers from allowing a group, or an
individual, to enroll in an individual policy or plan through the NM Comprehensive Health
Insurance Pool or NM Health Insurance Alliance if these people would be eligible under a group
policy under this act.
SB 439 also does the following:
- Raises the maximum group size from 20 members to 50 members.
- Removes the following criteria for eligibility: necessity to be without coverage for 6
months, a dependent who loses dependency qualifications, loss of healthcare coverage
from employment change, death of a spouse, or divorce.
- Adds coverage for 48 hours or more of inpatient care after a mastectomy and 24 hours
following a lymph node dissection for treating breast cancer and allows the imposition of a
deductible and co-insurance.
- Includes the Minimum Healthcare Protection Act under provisions for policy issuance.
- Removes limits of age, gender geographic area, place of employment and smoking status
as the only factors allowable for determining first year premiums and rate charges.
Subsequent year premiums and rate charge restrictions are also removed.
- Excludes group policies issued under this act from falling under the Small Group Rate and
Renewability Act.
Significant Issues
The industry supports SB 439 and claims that it will allow them to offer coverage to more
consumers. The consumer groups claim that this bill will not affect the number of people who are
uninsured, but will increase the number who are "under insured."
RELATIONSHIP
Relates to HB275, Small Employers Catastrophic Group Health
OTHER SUBSTANTIVE ISSUES
The HPC provided the following:
- Approximately 26 percent of New Mexicans are uninsured and 29 percent of non-elderly
adults, most of whom are working, are uninsured. Affordability was the primary reason
cited for lack of insurance coverage by adults followed by not being offered by employer.
To the extent that this act opens up the market for minimal insurance and potential lowered
premium costs, more individuals and employers may opt for coverage, particularly
uninsured young adults.
- New Mexico has in the period from 1996-1998 the lowest percentage of private health
insurance in the non-elderly population (19-64) in the US at 59 percent and the highest 48
percent of low-income persons in that same age group.
- Affordability is the primary reason for lack of insurance coverage. New Mexicans without
health insurance coverage do not generally receive the benefits of medical care for the
treatment of treatable or chronic illnesses. This results in the delay of treatment until
progression of the illness or results in treatment at emergency facilities. This can result in
both decreased quality of life and lowered economic productivity for unhealthy individuals
and increased health care costs to the state when emergency room care is substituted for
routine health care.
- NM workers contribute a higher percentage of their income to health insurance premiums
than the national average. This is partly attributed to the nature of the New Mexico
economy and the fact that New Mexico has more firms with low wages and less with
unionized workers than the U.S.
- Employers in New Mexico who do not offer health insurance claim that they cannot
afford to subsidize health insurance for their employees. Most of the employers who had
been offering health insurance cited increasing premium costs as the reason for dropping
health insurance.
- HB 439 provides small employers with a health insurance policy option in lieu of small
group health insurance policies containing those provisions currently mandated by the
Insurance Code, which may actually increase the number of small employers that offer
health insurance to their employees.
- There are group health insurance plans in the marketplace that offer high deductibles,
manage to maintain a quality level of benefits and offer affordable premiums. For
example, the New Mexico Health Insurance Alliance offers a $5,000 deductible plan with
a premium around $55 for a male employee under 30 years old.
- Mandatory benefits were enacted to provide protection for individuals, because they are
cost-effective, and for public good. There may be a tendency for insurers to drop these
benefits, resulting in a longer term health care costs for the health system as a whole.
There may also be a tendency to transfer these services and associated costs to government, for example: immunizations through public health offices, PAP smears and
mammograms through the Department of Health breast and cervical cancer screening
program.
- The exclusion of so many mandated benefits covered under the group health insurance
code could restrict access to health care services for a fairly large population in New
Mexico who consider themselves protected by law and unknowingly purchase a catastrophic plan with reduced services. Additionally, many small employers lack technical
understanding of what is 'standard' benefits and what is not being covered under the plan.
- Could open liability for insurance companies, health insurance agents and other related
entities because they may also presume that current group health insurance code applies to
all group health insurance.
- Currently high deductible health insurance plans, which can be categorized as a form of
minimal health insurance, will remain mandated by the same provisions as other health
insurance. Small employers may remain unable to afford to offer health insurance, and
healthy young adults may continue to be uninsured.
POSSIBLE QUESTIONS
Why does SB 439 not allow a group or an individual to enroll in a plan through the CHIPs or
Alliance programs if they are eligible for a group policy under SB 439? The CHIPs and Alliance
programs may be better coverage and more suited to the consumer's need.
MV/ar