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F I S C A L I M P A C T R E P O R T

SPONSOR Martinez

ORIGINAL DATE

LAST UPDATED

2/1/06

HB 610

SHORT TITLE Health Coverage Trust Fund Implementation

SB

ANALYST Lewis

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

100,000.0* Non-Recurring

General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

*Contingent - see narrative.

Companion to HJR 10 (Health Care Coverage Trust Fund, CA).

Relates to HB 481/SB 280 (Health Coverage for New Mexicans Committee).

REVENUE (dollars in thousands)

Estimated Revenue

FY06

FY07

FY08

Recurring

or Non-Rec

Fund

Affected

(100,000.0)*

Non-Recurring

General Fund

100,000.0*

Non-Recurring Health Care Cover-

age Trust Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

*Contingent - see narrative.

SOURCES OF INFORMATION

LFC Files

Responses Received From

Health Policy Commission (HPC)

Department of Health (DOH)

SUMMARY

Synopsis of Bill

House Bill 610, with emergency clause, creates the Blue Ribbon Health Care Coverage Task

Force, which shall function from the date of its appointment until December 1, 2007.

House Bill 610 – Page

2

If the health care coverage trust fund is established by a constitutional amendment adopted in the

2006 general election,

$100 million is transferred from the general fund to the health care coverage trust fund;

money in the fund shall only be used to make an annual appropriation, in fiscal year 2009

and each fiscal year thereafter, based on recommendations of the Blue Ribbon Health Care

Coverage Task Force, for any health care coverage or insurance program for the prevention,

diagnosis and treatment of disease, illness or injury; and

money in the fund shall not revert.

The Blue Ribbon Health Care Coverage Task Force shall consist of nine members, including:

three public members appointed by the governor;

three members appointed by the Legislative Council from the House of Representatives; and

three members appointed by the Legislative Council from the Senate.

Members shall be appointed from each house so as to give the two major political parties in each

house the same proportionate representation on the task force as prevails in each house.

No action shall be taken by the task force if a majority of the total membership from either house

on the task force rejects the action.

After its appointment, and upon approval by the Legislative Council of its work plan and budget,

the Blue Ribbon Health Care Coverage Task Force shall, with staff provided by the Legislative

Council Service:

1)

examine the public and private financing of health care in the state;

2)

inventory, consider and take testimony on the various unmet health care coverage and access

needs in the state and determine or devise a method for setting priorities among those unmet

needs;

3)

study the impact of appropriating distributions from the health care coverage trust fund and

determine whether any changes should be made in the law regarding the funds or the distri-

bution mechanism;

4)

develop a formula or guidelines for determining which purposes, programs or activities will

be funded annually, using categories generally for household incomes below 150 percent, be-

tween 150 and 300 percent, and over 300 percent of the federal poverty level; and

5)

review any other statutes, constitutional provisions, regulations and court decisions relevant

to the use of health care coverage.

The task force shall report its findings and recommendations, including proposed legislation, for

the consideration of the second session of the forty-eighth legislature. The report and proposed

legislation shall be submitted to the Legislative Council on or before December 15, 2007.

FISCAL IMPLICATIONS

The appropriation of $100 million contained in this bill is a contingent, non-recurring expense to

the general fund. Money in the health care coverage trust fund shall not revert to the general

fund.

SIGNIFICANT ISSUES

HJR 10 (Health Care Coverage Trust Fund, CA) provides that submission to the people at the

House Bill 610 – Page

3

next general election of the constitutional amendment creating the health care coverage trust

fund is contingent upon enactment into law of a bill that transfers $100 million to the fund. The

joint resolution further provides that:

money in the fund shall be invested by the State Investment Officer as land grant permanent

funds are invested;

earnings from investment of the fund shall be credited to the fund; and

money in the fund shall not revert or be expended for any purpose, but an annual distribution

shall be made pursuant to law.

It should be noted that, although submission of the constitutional amendment to the people under

HJR 10 and HB 610’s appropriation of $100 million to the health care coverage trust fund are

mutually contingent, creation of the Blue Ribbon Health Care Coverage Task Force does not de-

pend on either action. If the $100 million is not appropriated, and the fund is not created, the

Blue Ribbon Health Care Coverage Task Force could still be established; and three of its five

responsibilities would still be relevant to planning with regard to the state’s health care needs.

According to the Health Policy Commission (HPC),

New Mexico has the second highest rate of

uninsured in the nation, with 21 percent of the population or nearly 400,000 uninsured. HPC’s

most recent Employer Survey has confirmed that small businesses in particular do not offer

health insurance largely because of the high cost. Also noted was the increasing cost of health

insurance and the possibility that more employers would drop or reduce health benefits because

of affordability.

The Department of Health (DOH) notes that HB 610’s one-time transfer of $100 million from

the general fund to the new health care coverage trust fund would convert a current year revenue

surplus into long-term use.

According to the DOH, several executive and legislative agencies and groups, including the

Health Policy Commission, deal with issues of health care coverage and access; and HB 610

does not specify how the activities of these other entities would be coordinated with those of the

Blue Ribbon Health Care Coverage Task Force.

ALTERNATIVES

The HPC suggests

that the proposed $100 million could be matched on a three-to-one basis with

the

Centers for Medicare & Medicaid Services (CMS) if a waiver was obtained.

ML/yr