SANTA FE, N.M. (AP) - Legislators advanced a proposal Wednesday to expand subsidies to the state’s health insurance exchange for residents with modest incomes who don’t qualify for Medicaid.
Supported by the administration of Gov. Michelle Lujan Grisham, the bill would substitute a state surtax on insurance premiums for a slightly smaller federal fee that expired late last year after its repeal.
Proceeds would be used to pay down premiums and other out-of-pocket costs for individuals and families obtaining insurance through the state’s medical insurance exchange for individuals and small groups, an outgrowth of the Affordable Care Act.
A House legislative committee voted 7-3 along party lines, with Republicans in opposition to advance the surtax rate increase on health insurance premiums.
Supporters of the initiative include New Mexico Superintendent of Insurance Russell Toal, who says the subsidy should attract more insurance customers to the state marketplace and ultimately lower monthly insurance premium payments.
“The larger the pool, the greater the risk is spread and the greater potential for lower premiums,” he said.
Advocates for small businesses voiced opposition, fearing the tax increase will put a greater financial burden on employer based health plans.
“Especially in a pandemic and with rising health care costs, we’re really worried about the impact,” said Jason Espinoza, state director of the National Federation of Independent Businesses.
State insurance regulators hope the measure might extend insurance coverage to 23,000 people who go without coverage.
States including Colorado, Delaware and New Jersey have enacted a similar fee.
In New Mexico, it could increase state government revenues by an estimated $153 million annually. About $115 million would go toward lowering consumer costs for insurance, with the remainder transferred to the state general fund.
New Mexico completes the transition this year to its own self-contained marketplace for insurance. About 43,000 people relied on the exchange for insurance access last year.
President Joe Biden last week ordered government health insurance markets to reopen for a special 60-day sign-up window, offering uninsured Americans a haven amid the pandemic.
New Mexico residents have flocked to Medicaid health care, with 43% enrollment statewide as of November as the coronavirus wreaks economic havoc and shifts the way people receive health care.
Please read our comment policy before commenting.