HOUSE BILL 238

49th legislature - STATE OF NEW MEXICO - first session, 2009

INTRODUCED BY

Keith J. Gardner

AN ACT

RELATING TO HEALTH CARE; CREATING THE MEDICAID INVESTS IN HEALTH DEMONSTRATION PROJECT; ESTABLISHING HEALTH OPPORTUNITY ACCOUNTS WITH CATASTROPHIC COVERAGE AND USE OF PRINCIPLE FOR HEALTH SERVICES, INSURANCE OR EDUCATION; REQUIRING THE HUMAN SERVICES DEPARTMENT TO SUBMIT A STATE MEDICAID PLAN AMENDMENT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     Section 1. A new section of the Public Assistance Act is enacted to read: 

     "[NEW MATERIAL] MEDICAID INVESTS IN HEALTH DEMONSTRATION PROJECT CREATED--PROGRAM FEATURES--HEALTH INSURANCE COVERAGE--HEALTH OPPORTUNITY ACCOUNTS.--

          A. The "medicaid invests in health demonstration project" is created as a program of the department. The demonstration project shall have the following features:

                (1) as department funding permits, the department shall allow medicaid recipients the opportunity to enroll in the medicaid invests in health demonstration project, except for the following categories of recipients:

                     (a) individuals who are aged sixty-five and older;

                     (b) individuals who are blind or disabled;

                     (c) pregnant women;

                     (d) individuals who have been eligible for medical assistance for less than three months;

                     (e) individuals residing in health facilities;

                     (f) individuals entitled to any part of medicare;

                     (g) individuals who are terminally ill and are receiving hospice benefits;

                     (h) individuals whom the department finds are medically frail or have special medical needs; or

                     (i) children receiving medical assistance because they are in foster care or because their households are receiving adoption assistance; and

                (2) the department shall provide to enrollees:                      (a)  a qualified higher deductible health plan, as defined in the Medical Care Savings Account Act; provided that the deductible be at least one hundred percent, but no more than one hundred ten percent, of the annualized amount of contributions to the health opportunity account as provided in Subparagraph (c) of this paragraph;

                     (b) exclusions from the deductible of the higher deductible health plan for services that the department deems to be preventive or an emergency;

                     (c) a health opportunity account, in which funds consist exclusively of those deposited by the department; the department shall use combined federal and state funds to deposit up to two thousand five hundred dollars ($2,500) for a person over the age of nineteen and one thousand dollars ($1,000) for a person under the age of nineteen;

                     (d) a system using electronic technology to reimburse providers for services provided to medicaid invests in health demonstration project enrollees;

                     (e) an account administrator to administer health opportunity accounts;

                     (f) incentives for enrollees to seek preventive care services;

                     (g) education regarding the high cost of health care;

                     (h) programs to reduce the inappropriate use of health care services by enrollees;

                     (i) enrollment counselors and ongoing educational activities; and

                     (j) negotiated provider payment rates, including arrangements with medicaid managed care organizations for services to enrollees.

          B. Funds in an individual's health opportunity account shall be used to pay the individual's deductible for health care services under the individual's higher deductible health insurance plan.

          C. Enrollment in the medicaid invests in health demonstration project shall last for a period of twelve months during the initial demonstration project. If the medicaid invests in health demonstration project continues after its first year of implementation, individuals may reenroll in the project as department funds permit. Any funds remaining in an individual's health opportunity account when the individual reenrolls shall remain in the health opportunity account.

          D. Principle contributed to and interest earned on a health opportunity account and money paid for eligible medical expenses are exempt from taxation under the Income Tax Act.

          E. Amounts in or contributed to health opportunity accounts shall not be counted as income or assets for purposes of determining eligibility for public assistance pursuant to the Public Assistance Act.

          F. Funds that remain in an individual's health opportunity account after three years from the date the individual has effectively disenrolled from the medicaid invests in health demonstration project or has become ineligible for medicaid, as well as any income that accrues from a health opportunity account, shall be reinvested into the medicaid invests in health demonstration project or, in the event that the project has ended, shall:

                (1) revert to the department to pay the expenses that it incurred pursuant to the medicaid invests in health demonstration project; or

                (2) revert to the general fund and to the federal government in the same proportion that each contributed to the account.

          G. The department shall appoint an account administrator to administer enrollees' health opportunity accounts. The department shall pay any reasonable compensation to the account administrator to administer the health opportunity accounts, and the department shall not require a recipient to contribute to the account administrator's compensation while a recipient participates in the program.

          H. When an account holder of a health opportunity account disenrolls or becomes ineligible for medicaid, no additional contributions shall be made to the individual's health opportunity account pursuant to Subsection A of this section and twenty-five percent of the principle shall revert to the department for disposition pursuant to Subsection J of this section. Seventy-five percent of the principle remaining in the health opportunity account shall remain available to the account holder for three years after the date on which the individual does not reenroll or becomes ineligible for medicaid for the following purposes:

                (1) an individual who disenrolls or becomes ineligible for medicaid, who has had a health opportunity account for less than one year and has a remaining balance in the individual's health opportunity account may use the balance to cover the cost of health care expenses that the department deems qualified pursuant to federal and state law or to purchase private health insurance; and

                (2) an individual who disenrolls or becomes ineligible for medicaid, who has had a health opportunity account for more than one year before disenrolling or becoming ineligible for medicaid, may use the funds in the following ways:

                     (a) to cover health care expenses the department deems qualified pursuant to federal and state law;

                     (b) for tuition at a state public post-secondary educational institution; or

                     (c) for the cost of enrolling in job training programs that the department, the workforce solutions department or the higher education department funds or operates.

          I. The department shall establish procedures to penalize or remove an individual from a health opportunity account for withdrawals that the department deems to be unqualified withdrawals and to recoup costs that derive from unqualified withdrawals from health opportunity accounts.

          J. The department shall promulgate rules regarding the disposition of any income pursuant to Subsection F of this section; funds that revert to the department pursuant to Subsection H of this section; or funds that remain in health opportunity accounts for three years after the date an individual was last enrolled in the medicaid invests in health demonstration project.

          K. An individual who is eligible for medicaid who, for any reason, is disenrolled from the medicaid invests in health demonstration project shall be ineligible to reenroll in the project before the end of the one-year period that begins on the effective date of the individual's disenrollment."

     Section 2. A new section of the Public Assistance Act is enacted to read:

     "[NEW MATERIAL] APPLICATION FOR MEDICAID STATE PLAN AMENDMENT--RULEMAKING.--The department shall submit a state plan amendment to the United States department of health and human services' centers for medicare and medicaid services and promulgate rules necessary to implement the medicaid invests in health demonstration project. The medicaid invests in health demonstration project shall be implemented pursuant to federal law and rules regarding health opportunity accounts pursuant to the federal Deficit Reduction Act of 2005."

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