46th legislature - STATE OF NEW MEXICO - first session, 2003
RELATING TO HEALTH INSURANCE; REVISING BOARD MEMBERSHIP AND ELIGIBILITY CRITERIA FOR THE MEDICAL INSURANCE POOL; AMENDING SECTIONS OF THE NMSA 1978.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 59A-54-3 NMSA 1978 (being Laws 1987, Chapter 154, Section 3, as amended) is amended to read:
"59A-54-3. DEFINITIONS.--As used in the Medical Insurance Pool Act:
A. "board" means the board of directors of the pool;
B. "creditable coverage" means, with respect to an individual, coverage of the individual pursuant to:
(1) a group health plan;
(2) health insurance coverage;
(3) Part A or Part B of Title 18 of the Social Security Act;
(4) Title 19 of the Social Security Act except coverage consisting solely of benefits pursuant to Section 1928 of that title;
(5) 10 USCA Chapter 55;
(6) a medical care program of the Indian health service or of an Indian nation, tribe or pueblo;
(7) the Medical Insurance Pool Act;
(8) a health plan offered pursuant to 5 USCA Chapter 89;
(9) a public health plan as defined in federal regulations; or
(10) a health benefit plan offered pursuant to Section 5(e) of the federal Peace Corps Act;
C. "federally defined eligible individual" means an individual:
(1) for whom, as of the date on which the individual seeks coverage under the Medical Insurance Pool Act, the aggregate of the periods of creditable coverage is eighteen or more months;
(2) whose most recent prior creditable coverage was under a group health plan, government plan, church plan or health insurance coverage offered in connection with such a plan;
(3) who is not eligible for coverage under a group health plan, Part A or Part B of Title 18 of the Social Security Act or a state plan under Title 19 or Title 21 of the Social Security Act or a successor program and who does not have other health insurance coverage;
(4) with respect to whom the most recent coverage within the period of aggregate creditable coverage was not terminated based on a factor relating to nonpayment of premiums or fraud;
(5) who, if offered the option of continuation of coverage under a continuation provision pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 or a similar state program elected this coverage; and
(6) who has exhausted continuation coverage under this provision or program, if the individual elected the continuation coverage described in Paragraph (5) of this subsection;
[C.] D. "health care facility" means any entity
providing health care services that is licensed by the
department of health;
[D.] E. "health care services" means any services
or products included in the furnishing to any individual of
medical care or hospitalization, or incidental to the
furnishing of such care or hospitalization, as well as the
furnishing to any person of any other services or products for
the purpose of preventing, alleviating, curing or healing human
illness or injury;
[E.] F. "health insurance" means any hospital and
medical expense-incurred policy; nonprofit health care service
plan contract; health maintenance organization subscriber
contract; short-term, accident, fixed indemnity, specified
disease policy or disability income contracts; limited benefit
insurance; credit insurance; or as defined by Section 59A-7-3
NMSA 1978. "Health insurance" does not include insurance
arising out of the Workers' Compensation Act or similar law,
automobile medical payment insurance or insurance under which
benefits are payable with or without regard to fault and that
is required by law to be contained in any liability insurance
policy;
[F.] G. "health maintenance organization" means any
person who provides, at a minimum, either directly or through
contractual or other arrangements with others, basic health
care services to enrollees on a fixed prepayment basis and who
is responsible for the availability, accessibility and quality
of the health care services provided or arranged, or as defined
by Subsection M of Section 59A-46-2 NMSA 1978;
[G.] H. "health plan" means any arrangement by
which persons, including dependents or spouses, covered or
making application to be covered under the pool have access to
hospital and medical benefits or reimbursement, including group
or individual insurance or subscriber contract; coverage
through health maintenance organizations, preferred provider
organizations or other alternate delivery systems; coverage
under prepayment, group practice or individual practice plans;
coverage under uninsured arrangements of group or group-type
contracts, including employer self-insured, cost-plus or other
benefits methodologies not involving insurance or not subject
to New Mexico premium taxes; coverage under group-type
contracts that are not available to the general public and can
be obtained only because of connection with a particular
organization or group; and coverage by medicare or other
governmental benefits. "Health plan" includes coverage through
health insurance;
[H.] I. "insured" means an individual resident of
this state who is eligible to receive benefits from any insurer
or other health plan;
[I.] J. "insurer" means an insurance company
authorized to transact health insurance business in this state, a nonprofit health care plan, a health maintenance organization and self-insurers not subject to federal preemption. "Insurer" does not include an insurance company that is licensed under the Prepaid Dental Plan Law or a company that is solely engaged in the sale of dental insurance and is licensed not under that act, but under another provision of the Insurance Code;
[J.] K. "medicare" means coverage under Part A or
Part B of Title 18 of the Social Security Act, as amended;
[K.] L. "pool" means the New Mexico medical
insurance pool; [and]
M. "preexisting condition" means a physical or mental condition for which medical advice, medication, diagnosis, care or treatment was recommended for or received by an applicant within six months before the effective date of coverage, except that pregnancy is not considered a preexisting condition; and
[L.] N. "therapist" means a licensed physical,
occupational, speech or respiratory therapist."
Section 2. Section 59A-54-4 NMSA 1978 (being Laws 1987, Chapter 154, Section 4, as amended) is amended to read:
"59A-54-4. POOL CREATED--BOARD.--
A. There is created a nonprofit entity to be known as the "New Mexico medical insurance pool". All insurers shall organize and remain members of the pool as a condition of their authority to transact insurance business in this state. The board is a governmental entity for purposes of the Tort Claims Act.
B. The superintendent shall, within sixty days after the effective date of the Medical Insurance Pool Act, give notice to all insurers of the time and place for the initial organizational meetings of the pool. Each member of the pool shall be entitled to one vote in person or by proxy at the organizational meetings.
C. The pool shall operate subject to the
supervision and approval of the board. The board shall consist
of the superintendent or his designee, who shall serve as the
chairman of the board, four members appointed by the members of
the pool and [five] six members appointed by the
superintendent. The members appointed by the members of the
pool shall consist of [one representative of a nonprofit health
care plan] one representative of a health maintenance
organization and [two] three representatives of other types of
members of the pool. The members appointed by the
superintendent shall consist of four citizens who are not
professionally affiliated with an insurer, at least two of whom
shall be individuals who are insured by the pool, who would
qualify for pool coverage if they were not eligible for
particular group coverage or who are a parent, guardian,
relative or spouse of such an individual. The superintendent's
fifth appointment shall be a representative of a statewide
health planning agency or organization. The superintendent's
sixth appointment shall be a representative of the medical
community.
D. The members of the board appointed by the members of the pool shall be appointed for initial terms of four years or less, staggered so that the term of one member shall expire on June 30 of each year. The members of the board appointed by the superintendent shall be appointed for initial terms of five years or less, staggered so that the term of one member expires on June 30 of each year. Following the initial terms, members of the board shall be appointed for terms of three years. If the members of the pool fail to make the initial appointments required by this subsection within sixty days following the first organizational meeting, the superintendent shall make those appointments. Whenever a vacancy on the board occurs, the superintendent shall fill the vacancy by appointing a person to serve the balance of the unexpired term. The person appointed shall meet the requirements for initial appointment to that position. Members of the board may be reimbursed from the pool subject to the limitations provided by the Per Diem and Mileage Act and shall receive no other compensation, perquisite or allowance.
E. The board shall submit a plan of operation to the superintendent and any amendments to it necessary or suitable to assure the fair, reasonable and equitable administration of the pool.
F. The superintendent shall, after notice and hearing, approve the plan of operation, provided it is determined to assure the fair, reasonable and equitable administration of the pool and provides for the sharing of pool losses on an equitable, proportionate basis among the members of the pool. The plan of operation shall become effective upon approval in writing by the superintendent consistent with the date on which coverage under the Medical Insurance Pool Act is made available. If the board fails to submit a plan of operation within one hundred eighty days after the appointment of the board, or any time thereafter fails to submit necessary amendments to the plan of operation, the superintendent shall, after notice and hearing, adopt and promulgate such rules as are necessary or advisable to effectuate the provisions of the Medical Insurance Pool Act. Rules promulgated by the superintendent shall continue in force until modified by him or superseded by a subsequent plan of operation submitted by the board and approved by the superintendent.
G. Any reference in law, rule, division bulletin, contract or other legal document to the New Mexico comprehensive health insurance pool shall be deemed to refer to the New Mexico medical insurance pool."
Section 3. Section 59A-54-10 NMSA 1978 (being Laws 1987, Chapter 154, Section 10, as amended) is amended to read:
"59A-54-10. ASSESSMENTS.--
A. Following the close of each fiscal year, the pool administrator shall determine the net premium, being premiums less administrative expense allowances, the pool expenses and claim expense losses for the year, taking into account investment income and other appropriate gains and losses. The assessment for each insurer shall be determined by multiplying the total cost of pool operation by a fraction the numerator of which equals that insurer's premium and subscriber contract charges or their equivalent for health insurance written in the state during the preceding calendar year and the denominator of which equals the total of all premiums and subscriber contract charges written in the state; provided that premium income shall include receipts of medicaid managed care premiums but shall not include any payments by the secretary of health and human services pursuant to a contract issued under Section l876 of the Social Security Act, as amended. The board may adopt other or additional methods of adjusting the formula to achieve equity of assessments among pool members, including assessment of health insurers and reinsurers based upon the number of persons they cover through primary, excess and stop-loss insurance in the state.
B. If assessments exceed actual losses and administrative expenses of the pool, the excess shall be held at interest and used by the board to offset future losses or to reduce pool premiums. As used in this subsection, "future losses" includes reserves for incurred but not reported claims.
C. The proportion of participation of each member in the pool shall be determined annually by the board based on annual statements and other reports deemed necessary by the board and filed with it by the member. Any deficit incurred by the pool shall be recouped by assessments apportioned among the members of the pool pursuant to the assessment formula provided by Subsection A of this section; provided that the assessment for any pool member shall be allowed as a thirty-percent credit on the premium tax return for that member.
D. The board may abate or defer, in whole or in part, the assessment of a member of the pool if, in the opinion of the board, payment of the assessment would endanger the ability of the member to fulfill its contractual obligation. In the event an assessment against a member of the pool is abated or deferred in whole or in part, the amount by which such assessment is abated or deferred may be assessed against the other members in a manner consistent with the basis for assessments set forth in Subsection A of this section. The member receiving the abatement or deferment shall remain liable to the pool for the deficiency for four years."
Section 4. Section 59A-54-12 NMSA 1978 (being Laws 1987, Chapter 154, Section 12, as amended) is amended to read:
"59A-54-12. ELIGIBILITY--POLICY PROVISIONS.--
A. Except as provided in Subsection B of this section, a person is eligible for a pool policy only if on the effective date of coverage or renewal of coverage the person is a New Mexico resident, and:
(1) is not eligible as an insured or covered dependent for any health plan that provides coverage for comprehensive major medical or comprehensive physician and hospital services;
(2) [is only eligible for a health plan that
is offered at a rate higher than that available from the pool]
is currently paying a rate for a health plan that is higher
than one hundred twenty-five percent of the pool's standard
rate;
(3) has been rejected for coverage for comprehensive major medical or comprehensive physician and hospital services;
(4) is only eligible for a health plan with a rider, waiver or restrictive provision for that particular individual based on a specific condition;
(5) has a medical condition that is listed on the pool's pre-qualifying conditions;
[(5)] (6) has as of the date the individual
seeks coverage from the pool an aggregate of eighteen or more
months of creditable coverage, the most recent of which was
under a group health plan, governmental plan or church plan as
defined in Subsections P, N and D, respectively, of Section
59A-23E-2 NMSA 1978, except, for the purposes of aggregating
creditable coverage, a period of creditable coverage shall not
be counted with respect to enrollment of an individual for
coverage under the pool if, after that period and before the
enrollment date, there was a sixty-three-day or longer period
during all of which the individual was not covered under any
creditable coverage; or
[(6)] (7) is entitled to continuation coverage
pursuant to Section 59A-23E-19 NMSA 1978.
B. Notwithstanding the provisions of Subsection A of this section:
(1) a person's eligibility for a policy issued under the Health Insurance Alliance Act shall not preclude a person from remaining on or purchasing a pool policy; provided that a self-employed person who qualifies for an approved health plan under the Health Insurance Alliance Act by using a dependent as the second employee may choose a pool policy in lieu of the health plan under that act;
(2) a pool policyholder shall be eligible for renewal of pool coverage even though the policyholder became eligible for medicare or medicaid coverage while covered under a pool policy; and
(3) if a pool policyholder becomes eligible for any group health plan, the policyholder's pool coverage shall not be involuntarily terminated until any preexisting condition period imposed on the policyholder by the plan has been exhausted.
C. Coverage under a pool policy is in excess of and shall not duplicate coverage under any other form of health insurance.
[D. A pool policy shall provide that coverage of a
dependent unmarried person terminates when the person becomes
nineteen years of age or, if the person is enrolled full time
in an accredited educational institution, when he becomes
twenty-five years of age. The policy shall also provide in
substance that attainment of the limiting age does not operate
to terminate coverage when the person is and continues to be:
(1) incapable of self-sustaining employment
by reason of developmental disability or physical handicap; and
(2) primarily dependent for support and
maintenance upon the person in whose name the contract is
issued.
Proof of incapacity and dependency shall be furnished to
the insurer within one hundred twenty days of attainment of the
limiting age and subsequently as required by the insurer but
not more frequently than annually after the two-year period
following attainment of the limiting age.
E. A pool policy that provides coverage for a
family member of the person in whose name the contract is
issued shall, as to the coverage of the family member or the
individual in whose name the contract was issued, provide that
the health insurance benefits applicable for children are
payable with respect to a newly born child of the family member
or the person in whose name the contract is issued from the
moment of coverage of injury or illness, including the
necessary care and treatment of medically diagnosed congenital
defects and birth abnormalities. If payment of a specific
premium is required to provide coverage for the child, the
contract may require that notification of the birth of a child
and payment of the required premium shall be furnished to the
carrier within thirty-one days after the date of birth in order
to have the coverage continued beyond the thirty-one day
period.]
D. A policyholder's newborn child or newly adopted child is automatically eligible for thirty-one consecutive calendar days of coverage for an additional premium.
[F.] E. Except for a person eligible as provided in
Paragraph [(5)] (6) of Subsection A of this section, a pool
policy may contain provisions under which coverage is excluded
during a six-month period following the effective date of
coverage as to a given individual for preexisting conditions
[as long as either of the following exists:
(1) the condition has manifested itself within
a period of six months before the effective date of coverage in
such a manner as would cause an ordinarily prudent person to
seek diagnoses or treatment; or
(2) medical advice or treatment was
recommended or received within a period of six months before
the effective date of coverage].
[G.] F. The preexisting condition exclusions
described in Subsection [F] E of this section shall be waived
to the extent to which similar exclusions have been satisfied
under any prior health insurance coverage that was
involuntarily terminated, if the application for pool coverage
is made not later than thirty-one days following the
involuntary termination. In that case, coverage in the pool
shall be effective from the date on which the prior coverage
was terminated. This subsection does not prohibit preexisting
conditions coverage in a pool policy that is more favorable to
the insured than that specified in this subsection.
[H.] G. An individual is not eligible for coverage
by the pool if:
(1) except as provided in Subsection [J] I of
this section, the individual is, at the time of application,
eligible for medicare or medicaid [which] that would provide
coverage for amounts in excess of limited policies such as
dread disease, cancer policies or hospital indemnity policies;
(2) the individual has voluntarily terminated coverage by the pool within the past twelve months and did not have other continuous coverage during that time, except that this paragraph shall not apply to an applicant who is a federally defined eligible individual;
(3) the individual is an inmate of a public institution or is eligible for public programs for which medical care is provided;
(4) the individual is eligible for coverage under a group health plan;
(5) the individual has health insurance coverage as defined in Subsection R of Section 59A-23E-2 NMSA 1978;
(6) the most recent coverages within the
coverage period described in Paragraph [(5)] (6) of Subsection
A of this section were terminated as a result of nonpayment of
premium or fraud; or
(7) the individual has been offered the option of continuation coverage under a federal COBRA continuation provision as defined in Subsection F of Section 59A-23E-2 NMSA 1978 or under a similar state program and he has elected the coverage and did not exhaust the continuation coverage under the provision or program.
[I.] H. Any person whose health insurance coverage
from a qualified state health policy with similar coverage is
terminated because of nonresidency in another state may apply
for coverage under the pool. If the coverage is applied for
within thirty-one days after that termination and if premiums
are paid for the entire coverage period, the effective date of
the coverage shall be the date of termination of the previous
coverage.
[J.] I. The board may issue a pool policy for
individuals who:
(1) are enrolled in both Part A and Part B of medicare because of a disability; and
(2) except for the eligibility for medicare, would otherwise be eligible for coverage pursuant to the criteria of this section."