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AN ACT

RELATING TO INSURANCE; REVISING DEFINITIONS AND ELIGIBILITY

CRITERIA IN THE MEDICAL INSURANCE POOL ACT; CLARIFYING

LIFETIME MAXIMUM BENEFIT LEVELS IN NEW MEXICO INSURANCE POOL

POLICIES; CLARIFYING SMALL GROUP POLICIES.

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) the Medical Insurance Pool Act;

(7) a health plan offered pursuant to

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5 USCA Chapter 89;

(8) a public health plan as defined in

federal regulations; or

(9) 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, governmental plan,

church plan or health insurance coverage, as those plans or

coverage are defined in Section 59A-23E-2 NMSA 1978, offered

in connection with that 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;

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(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;

D. "health care facility" means an entity

providing health care services that is licensed by the

department of health;

E. "health care services" means services or

products included in the furnishing to an individual of

medical care or hospitalization, or incidental to the

furnishing of that care or hospitalization, as well as the

furnishing to a person of other services or products for the

purpose of preventing, alleviating, curing or healing human

illness or injury;

F. "health insurance" means a hospital and medical

expense-incurred policy; nonprofit health care service plan

contract; health maintenance organization subscriber

contract; short-term, accident, fixed indemnity or specified

disease policy; disability income contracts; limited benefit

insurance; credit insurance; or as defined by Section 59A-7-3

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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 a liability insurance

policy;

G. "health maintenance organization" means a

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;

H. "health plan" means an 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

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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;

I. "insured" means an individual resident of this

state who is eligible to receive benefits from an insurer or

other health plan;

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;

K. "medicare" means coverage under Part A or

Part B of Title 18 of the Social Security Act, as amended;

L. "pool" means the New Mexico medical insurance

pool;

M. "preexisting condition" means a physical or

mental condition for which medical advice, medication,

diagnosis, care or treatment was recommended for or received

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by an applicant within six months before the effective date

of coverage, except that pregnancy is not considered a

preexisting condition for a federally defined eligible

individual; and

N. "therapist" means a licensed physical,

occupational, speech or respiratory therapist."

Section 2. 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 a health plan that provides coverage for

comprehensive major medical or comprehensive physician and

hospital services;

(2) 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 a mental health diagnosis and has

individual health insurance coverage that does not include

coverage for mental health services;

(4) has been rejected for coverage for

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comprehensive major medical or comprehensive physician and

hospital services;

(5) is only eligible for a health plan with

a rider, waiver or restrictive provision for that particular

individual based on a specific condition;

(6) has a medical condition that is listed

on the pool's prequalifying conditions;

(7) 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

ninety-five day or longer period during all of which the

individual was not covered under any creditable coverage; or

(8) 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

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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; and

(2) 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 policyholder's newborn child or newly adopted

child is automatically eligible for thirty-one consecutive

calendar days of coverage for an additional premium.

E. Except for a person eligible as provided in

Paragraph (7) 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.

F. The preexisting condition exclusions described

in Subsection E of this section shall be waived to the extent

to which similar exclusions have been satisfied under any

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prior health insurance coverage that was involuntarily

terminated, if the application for pool coverage is made not

later than ninety-five 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.

G. An individual is not eligible for coverage by

the pool if:

(1) except as provided in Subsection I of

this section, the individual is, at the time of application,

eligible for medicare or medicaid 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;

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(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 (7) 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 the

individual has elected the coverage and did not exhaust the

continuation coverage under the provision or program,

provided, however, that an unemployed former employee who has

not exhausted COBRA coverage shall be eligible.

H. A person whose health insurance coverage from a

qualified state high risk pool health policy is terminated

because of nonresidency in another state may apply for

coverage under the pool. If the coverage is applied for

within ninety-five 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.

I. The board may issue a pool policy for

individuals who:

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(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."

Section 3. Section 59A-54-13 NMSA 1978 (being Laws

1987, Chapter 154, Section 13, as amended) is amended to

read:

"59A-54-13. BENEFITS.--

A. The health insurance policy issued by the pool

shall pay for medically necessary eligible health care

services rendered or furnished for the diagnoses or treatment

of illness or injury that exceed the deductible and

coinsurance amounts applicable under Section 59A-54-14 NMSA

1978 and are not otherwise limited or excluded. Eligible

expenses are the charges for the health care services and

items for which benefits are extended under the pool policy.

The coverage to be issued by the pool and its schedule of

benefits, exclusions and other limitations shall be

established by the board and shall, at a minimum, reflect the

levels of health insurance coverage generally available in

New Mexico for small group policies; provided that a health

insurance policy issued by the pool shall not include a

lifetime maximum benefit. The superintendent shall approve

the benefit package developed by the board to ensure its

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compliance with the Medical Insurance Pool Act. The benefit

package shall include therapy services and hearing aids.

B. The Medical Insurance Pool Act shall not be

construed to prohibit the pool from issuing additional types

of health insurance policies with different types of benefits

that, in the opinion of the board, may be of benefit to the

citizens of New Mexico.

C. The board may design and employ cost

containment measures and requirements, including preadmission

certification and concurrent inpatient review, for the

purpose of making the pool more cost effective."

Section 4. Section 59A-54-16 NMSA 1978 (being Laws

1987, Chapter 154, Section 16, as amended) is amended to

read:

"59A-54-16. POOL POLICY.--

A. A pool policy offered under the Medical

Insurance Pool Act shall contain provisions under which the

pool is obligated to renew the contract until the day on

which the individual in whose name the contract is issued

first becomes eligible for medicare coverage, except that in

a family policy covering both husband and wife, the age of

the younger spouse shall be used as the basis for meeting the

durational requirement of this subsection.

B. The pool shall not change the rates for pool

policies except on a class basis with a clear disclosure in

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the policy of the right of the pool to do so.

C. In the case of a small group policy, a pool

policy offered under the Medical Insurance Pool Act shall

provide covered family members the right to continue the

policy as the named insured or through a conversion policy

upon the death of the named insured or upon the divorce,

annulment or dissolution of marriage or legal separation of

the spouse from the named insured by election to do so within

a period of time specified in the contract subject to the

requirements of this section."