NM insurance exchange switching to HMOs

Dan Schwartz

FARMINGTON — Officials involved in running the New Mexico Health Insurance Exchange met this week in Farmington to inform people about changes for the coming period, which will be the system’s third year of operation. They include dropping one provider and requiring that customers use certain doctors.

Health care

Blue Cross Blue Shield of New Mexico, previously one of five insurance providers, left this year because the state wouldn’t allow the company to increase its rates by more than 50 percent, the state's Superintendent of Insurance John Franchini said. The state exchange provides health insurance plan offerings for businesses.

People who enrolled with Blue Cross Blue Shield will lose their insurance. But Franchini said shopping for insurance from the four remaining companies will be less confusing because the exchange now offers fewer plans that are more distinct.

“We’re cleaning it up,” he said.

But the major change this year, he said, is that its providers no longer offer preferred provider organization policies. Those polices, known as PPOs, allowed people to use doctors or hospitals outside their coverage plan.

The new health maintenance organization policies offered through the exchange require people to use specific doctors and hospitals included in the plan. But Franchini said people shouldn’t worry about the new policies, known as HMOs.

He referenced state laws that, among many things, require carriers to allow people to use out-of-network care if the in-network care isn’t available or appropriate, and this may not cost them any more money.

“There’s a whole lot of protections,” he said.

Eligible residents can sign up for health insurance until Jan. 30.

Individuals seeking health insurance through the exchange will, however, need to buy it through the federal government because the state’s marketplace, beWellnm.com, is only set up to provide health insurance plans for businesses. Franchini said the state is spending about $5 million a year to lease the federal website, which saves the state millions of dollars.

But a Legislative Finance Committee report released on Oct. 28 said the exchange had already spent $78 million without much to show for it.

“Marketing was costly with low resulting enrollment,” the report states, “and the investments in (information technology) did not result in a full implementation of the individual exchange.”

The report stated that the exchange has enrolled 28 percent of eligible New Mexicans; while the national average is 36 percent.

It also states that the exchange costs an estimated $15 million a year to run, and it said officials may need to restructure it to reduce overhead if enrollment remains low.

Health Insurance Exchange CEO Amy Dowd said the $78 million came from the federal government, not the state’s general fund, and the report contained “a number of factual errors.”

“We see things differently than the report,” she said.

Franchini also said the report contained factual errors.

Asked to identify the errors in the report, Dowd referred to a 29-page response she sent to the Legislative Finance Committee. But her letter did not state exactly what was wrong in the report.

Charles Sallee, Legislative Finance Committee deputy director, said exchange officials vetted the report before it was published and they failed to raise any outstanding issues. Sallee said it is to be expected that some of the numbers related to the uninsured population would change over time, but added, “We feel the report is accurate.”

Dan Schwartz covers government for The Daily Times. He can be reached at 505-564-4606.