Insurance choices plentiful in N.M. as open enrollment begins
As New Mexico Superintendent of Insurance John Franchini travels the state, he takes a lot of questions about new premium rates and problems with the Affordable Care Act, the federal law that requires most Americans to have health insurance or pay a penalty.
He doesn’t often hear from those who remember what the market was like four years ago for individual health insurance. Just two insurers were in New Mexico and customers with pre-existing health problems or a history of illness were often denied coverage.
For those fortunate enough to be accepted as a customer, it wasn’t unusual to be dropped if costs for an illness exceeded $500,000.
“You would only qualify for those plans if you were in perfect health,” Franchini said. “Those plans were dangerous plans at the time, but it was all we could get and no one was griping.”
Now a record 90 percent of New Mexicans are covered by health insurance in some form. Still, complaints abound with individual insurance premiums rising in the state an average of 25 percent to 30 percent. And the health insurance market remains fragile with one major carrier, Presbyterian Health Plan, withdrawing individual coverage through the Affordable Care Act portal, healthcare.gov, also called the health exchange. It won’t offer coverage in 2017.
But as open enrollment for individuals who need to purchase insurance on the healthcare.gov website begins Tuesday for coverage that begins Jan. 1, New Mexicans will find dozens of choices from four major companies and some of the lowest premiums in the country.
“We’re in a much better place than we were four years ago. It’s getting better and better,” Franchini said.
“I think it’s a tightrope, but I think New Mexico has navigated some of these issues well,” said Barbara K. Webber, executive director of Health Action New Mexico, a consumer advocacy group. She said insurance companies and Franchini’s office have worked to balance competition with consumer choice and that is growing the market.
New Mexico has seen one of the largest increases of insured people in the country, according to the U.S. Census Bureau. “The health sector is the driver of the economy right now,” Webber said, because more residents have insurance and are receiving needed care for the first time in years.
Data provided by The Associated Press and Avalere Health, a firm based in Washington, D.C., show that New Mexico still has among the lowest premiums in the United States for insurance plans that meet the Affordable Care Act guidelines on healthcare.gov.
The price of what the industry calls a benchmark Silver Plan — a typical plan for a 50-year-old nonsmoker in New Mexico before any federal assistance — goes from $303 per month to $341. Nationally, customers are finding a range of rates, from modest decreases to spikes of more than 100 percent in some Arizona counties, depending on competition in the market.
In New Mexico, four companies — Christus Health Plan, Molina Healthcare, New Mexico Health Connections and Blue Cross Blue Shield of New Mexico — are offering 57 different plans. They include those that only cover major hospitalizations to 18 midrange Silver Plans, the product most consumers purchase. Prices vary depending on age, location and whether the insured is a smoker.
The companies are also quite different. Health Connections is a nonprofit cooperative that was started with federal money to bring more competition to the marketplace in New Mexico. Christus is a nonprofit provider based in Texas but with a larger footprint in Northern New Mexico. Molina is a for-profit publicly traded company. Blue Cross Blue Shield of New Mexico is part of a larger entity, the Health Care Service Corp., that is customer-owned and licensed to sell plans in New Mexico, Illinois, Montana, Oklahoma and Texas.
Even though the largest insurer in the state, Presbyterian, is not selling health insurance on healthcare.gov for 2017, New Mexico has gone from one of the worst insurance markets in the United States to among the most competitive.
The Associated Press data show that five states have just one insurance company providing plans, and eight states have one company providing coverage in a majority of their counties.
New Mexico is in a rarer category, one of nine states where residents in all counties have a choice of three or more insurance companies.
“Health insurer participation is decreasing nationwide. One-third of the counties are offering just one insurance provider,” said Caroline Pearson, an executive with Avalere, a health care analysis company.
Just 4 percent of those with health insurance purchased it on their state or federal portal, known as a health insurance exchange. The majority of insured are covered through a government plan as Medicare or Medicaid or a private carrier that covers an employee group.
Premiums and benefits of those plans are negotiated based on the costs of the group and the health care costs in a community. Premiums for group insurance plans have not increased at the same rate as individual policies.
Pearson said the market for individual coverage long has been more volatile. Group plans generally have a more balanced risk pool because they collect premiums from all participants and their families, whether they are healthy or sick.
After the Affordable Care Act took effect, many companies started selling in communities without knowing a lot about the health needs of that population.
“The population participating in the exchanges are very high need,” Pearson said in a conference call with reporters. “They needed insurance for many years, and did not get access to affordable coverage. Insurers have not been able to cover their medical costs.”
One reason New Mexico still has a number of insurance providers is that many of the high-risk adults are now covered with Medicaid, a government insurance program with no monthly premiums. Gov. Susana Martinez decided to move forward with expanding Medicaid under an option of the Affordable Care Act in which the federal government assumes 90 percent of the cost. Single adults with a household income of $16,000 or less now qualify for that program.
Two providers who sell insurance on the exchange, Molina and Christus, also have their own clinics and doctors, and they have benefited from more insured Medicaid patients.
Colin Baillo, the director of policy and communication at Health Action New Mexico, does outreach to health consumers across the state. He is already getting calls about the advertised premium increases. The increases are basically list prices, he said.
The Affordable Care Act caps premiums based on income, so New Mexicans in low-wage jobs won’t see health insurance costs rise much, according to Baillo. Others will also see higher subsidies from the federal government because such assistance will go up along with the premiums.
About 68 percent of New Mexicans who buy on healthcare.gov receive some federal assistance, according to the Department of Health & Human Services. The majority of these buyers should be able to find coverage with a monthly premium below $100.
And there are an additional 8,000 New Mexicans who might qualify for some federal assistance if they purchased from the exchange, instead of from companies directly.
No one has to purchase coverage on the exchange to comply with the health insurance mandate, but those who want a subsidy must do so. The site links with other federal databases, such as those of the Internal Revenue Service or Homeland Security, to confirm income and citizenship status.
“Tax credits increase dollar for dollar with the cost of a consumer’s benchmark plan, and so they protect the large majority of consumers from rate increases,” U.S. Health and Human Services Secretary Sylvia M. Burwell said in a statement.
The agency gave the example of a 27-year-old in Albuquerque with an annual income of $25,000 who paid $143 per month to purchase the second-lowest-cost Silver Plan in 2016. For 2017, a 27-year-old with an annual income of $25,000 will pay almost the same amount, $142 per month. “While benchmark premiums have increased, tax credits will increase to compensate,” she said.
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Open enrollment assistance starting Tuesday, Nov. 1
• Call the assistance center at 855-996-6449, open 7 a.m. to 7 p.m. daily, except holidays
• Native American enrollment assistance, 855-241-8137
• Online at www.bewellnm.com
In-person assistance centers
The following centers are open from 8 a.m. to 5 p.m. Nov. 1 to Jan. 31., and by appointment other days.
• Santa Fe: 2945 Rodeo Park Drive, Unit 5. The staff speaks both English and Spanish and can be reached at 505-954-1715. Appointments are also available Wednesday evenings and Saturdays.
• Albuquerque: 6403 Menaul Blvd., 855-241-8137
• Farmington, 1305 E. 20th St., 505-258-4058
• Las Cruces: 1990 E. Lohman Ave., 575-524-6867
• Gallup: 1618 S. 2nd St., 505-297-3187
States with the lowest monthly premium cost for benchmark Silver Plan, before federal tax credits and other assistance. These figures show the cost of insurance for a 50-year-old nonsmoker starting in January 2017. Younger consumers will have lower premiums.
New Mexico: $341
New Hampshire: $373
National average: $533
Source: The Associated Press