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NEW MEXICO STATE COVERAGE INSURANCE
To address the state’s high rate of uninsured adults, New Mexico has initiated an employer-based public/private partnership program that is one of the first of its kind in the country. The program calls for New Mexico to contract with managed care organizations to provide a new insurance product for small businesses to offer to their low-income workers. Employers and employees pay part of the premium with state and federal funds picking up the remainder of the cost. In the past, programs that seek to make existing employer insurance coverage accessible to low-income employees have generally depended on premium assistance for the employer-sponsored products.
The five-year demonstration program, begun in July 2005, is expected to provide health care coverage to an estimated 40,000 uninsured adults age 19 to 65 with incomes below 200 percent of the federal poverty level (FPL). Uninsured parents of children covered by Medicaid or the State Children’s Health Insurance Program (SCHIP), as well as childless adults ineligible for Medicaid, are eligible for the new program.
Employers will pay $75 per person per month. No premiums will be required from participants with incomes up to 100 percent of the FPL ($9,570 in 2005; $19,350 for a family of four). Individuals with incomes above the FPL will pay monthly premiums of up to $35 based on income. Participants will be subject to co-payments on a sliding fee scale based on family income, with out-of-pocket charges limited to 5 percent of family income. The co-payments will range between $5 and $30 for specific primary care services. For example, an individual with annual income of $14,355 (150% of FPL) would pay $5 for a doctor visit or $25 per admission for hospital inpatient care.
The benefit package includes primary and specialty care; inpatient and outpatient hospitalization; physical, occupational and speech therapy; behavioral health and substance abuse services; and pharmacy, lab, and X-ray. Medicaid benefits such as optometrists, podiatrists, dental, dentures, and eyeglasses are not covered. Also not included in the benefit package are long-term care, personal care services, transportation, case management, hospice, or ICF/MR services.
The state expects that the program will cover about 10,000 adults in its first year, with ultimate enrollment of 40,000 adults. Individuals without an employer may also sign up; however, they must pay the employer share of the cost as well as the individual share. Children in New Mexico, currently eligible for Medicaid or SCHIP coverage if they are in families with incomes up to 235 percent of the FPL, are not affected by the new program.
The New Mexico Human Services Department (HSD) is partnering with the New Mexico Hospitals and Health Systems Association to manage the program. HSD announced on June 23, 2005 that it had entered into agreements with three managed care organizations to implement the program beginning July 1.
New Mexico plans to use unspent SCHIP funds that have an 82 percent match rate to pay for the coverage expansion as well as regular Medicaid funds at a 75 percent federal match. The program was designed through a grant from the Robert Wood Johnson’s State Coverage Initiative (SCI) program and through a federal Health Insurance Flexibility and Accountability waiver. The national SCI program has characterized the New Mexico project as “the next generation employer buy-in” approach.
In recent surveys, the state found that only 40 percent of small businesses (10 or fewer employees) offered health insurance. Thirty percent of New Mexicans with incomes between 100 percent and 185 percent of the FPL were uninsured.
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