New Mexico House panel OKs health exchange plan

SANTA FE, N.M. (AP) -- Democratic lawmakers in New Mexico pushed ahead Tuesday with a proposal to establish a state-run health insurance exchange, despite objections from the insurance industry and Republican Gov. Susana Martinez.

The House Health, Government and Indian Affairs Committee approved the measure on a party-line vote, with Democrats in favor and Republicans opposed.

The exchange is envisioned as an online shopping center for people and small businesses to buy health coverage from private insurance companies. Those plans must have a package of health benefits tailored to New Mexico, and the exchange is to make it easier to compare plans by price, benefits and quality.

Under federal law, the exchange must be ready for enrollment in October and be fully operating by next January.

Rep. Mimi Stewart, D-Albuquerque, said the proposal was the product of several weeks of negotiations with the Martinez administration over how to implement an exchange operated by the New Mexico Health Insurance Alliance, a nonprofit public corporation established in 1994 to provide access to insurance for small businesses and some individuals.

Stewart and other Democrats contend the Legislature must approve changes in state law for the exchange to have the power to operate and meet federal requirements for serving uninsured New Mexicans.

The Martinez administration initially had maintained it could set up an exchange without legislation by using the alliance, but it has been negotiating with lawmakers to avoid a possible court fight over the issue.

However, differences remain between Democrats and the governor — particularly over the powers of the exchange's proposed governing board.

"We would like to move to a more market-driven model," Matt Kennicott of the Human Services Department told the committee.

Insurance company representatives echoed that objection, as did several GOP committee members.

The legislation would allow the exchange's governing board to decide whether a health plan, if it met federal and state standards, would be offered through the exchange.

Kennicott and insurance industry officials said any qualified health plan should be available through the exchange's marketplace. The state insurance regulator will determine whether health plans provide necessary benefits and meet other requirements.

Kennicott said the administration hoped to continue negotiations with lawmakers.

The legislation will revamp the governing board of the alliance, which Stewart said was currently too heavily tilted in favor of the insurance industry.

There would be a 13-member governing board under the proposal approved by the committee. Nine of those would represent small employers and their employees. There would be one consumer representative and one board member representing the insurance industry. The cabinet secretary of the Human Services Department would serve on the board along with the state's insurance superintendent, who could vote only to break ties.

The governor would appoint seven of the board members, including the department secretary, and legislators would name five members.

"The governor gave a bunch. We gave a bunch, and came up with a compromise," said Stewart.

The legislation faces a long journey in the Democratic-controlled Legislature. It must clear another House committee before reaching the 70-member House for a vote. It also would need to pass the Senate.

Nearly 200,000 New Mexicans may be able to buy health insurance through the exchange between 2014 and 2020. Some uninsured won't need to use the exchange because they will become eligible for health care through Medicaid, which New Mexico is expanding under terms of the federal health care law that provides for insurance exchanges.

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