In less than 10 months, New Mexico must be able to enroll residents in a virtual marketplace called a health exchange.
A cornerstone of the nation’s health care law, the exchange would be a one-stop shop for people hunting for health insurance. It could lower the rate of uninsured in New Mexico, where one in five residents lacks coverage.
New Mexico is one of 18 states to decide to build its own exchange thanks to Republican Gov. Susana Martinez, who broke ranks with many of her GOP colleagues last year when she decided to take on the project. Most but not all Republican governors have let the federal government build the marketplaces in their respective states.
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Now, with the Oct. 1, 2013 federal deadline looming for enrolling residents who want to participate in the state’s exchange, several critical questions arise, including matters of law, government, culture and access to care.
“It’s a tough question to answer,” said Mike Nuñez, when talking about whether New Mexico is ready.
Nuñez is executive director of the Health Insurance Alliance, the organization New Mexico selected to help coordinate the construction of the state’s virtual marketplace. The quasi-state agency, created by a 1994 state law, already operates a small exchange that insures around 4,300 New Mexicans, and the Martinez administration thought using it as the vehicle for the new exchange would give the state a head start, state officials have said.
But a statewide exchange, once built, will be vastly larger than the alliance’s marketplace. And that has required Nuñez, state officials and a small army of medical professionals, insurance lobbyists, consumer advocates and government attorneys for the past few months to analyze how best to create a marketplace – and a health care delivery system — that meets New Mexico’s needs.
There is New Mexico’s rich ethnic and cultural diversity to consider, along with the digital divide — the sizable portion of New Mexico’s population that lacks access to the Internet, a potential problem for an exchange hosted online.
Roughly the size of New England and New York put together, New Mexico also is a largely rural state, meaning some New Mexicans who buy health coverage on the exchange might have to drive long distances to see a doctor. And if new patients do show up, are there enough doctors, dentists and others in New Mexico to handle the influx? It is something many consumer advocates and some medical professionals are wondering because of the state’s scarcity of medical professionals.
There are legal and political questions too.
Expect state lawmakers to debate who has the authority to create an exchange — the Martinez administration or the New Mexico Legislature — during the legislative session that starts next week. If no compromise emerges, expect the issue to go to court.
“There definitely will be a lawsuit if the state does an exchange without the Legislature having a say,” said Rep. Mimi Stewart, D-Albuquerque, who, along with other lawmakers, successfully convinced state courts in 2011 to overturn one of Martinez’s legislative vetoes involving the state’s unemployment fund.
One of the sticking points is over who appoints members to the Health Insurance Alliance board, which will oversee the state’s new exchange. Also at issue is the ratio of members from insurance companies and employers to employee representatives and consumer advocates, according to Stewart and others.
The Martinez administration, so far, has said it has the authority and cites the opinion from an attorney at the state’s human services agency to argue the administration doesn’t need legislative approval to set up the exchange.
However, in a Dec. 21 letter, Attorney General Gary King warned the administration that the state law creating the Health Insurance Alliance might lack the legal authority to establish New Mexico’s health exchange. In several areas, the statute conflicts with the federal health care law, he wrote.
Building a virtual marketplace
As visualized in the federal health care law, exchanges are meant to help reduce the number of Americans who go without health insurance. In New Mexico, by some estimates, 200,000 of the state’s more than 400,000 uninsured residents eventually could participate.
If all goes according to plan, New Mexicans using the exchange could comparison shop for plans. State officials expect the state’s major insurers, including Presbyterian, Lovelace and Blue Cross Blue Shield of New Mexico, to participate. So-called “navigators,” people the state hopes to hire, would help consumers analyze the competing plans. Unlike insurance brokers, “navigators” wouldn’t earn commissions paid by insurers, Matt Kennicott, a spokesman for the state’s human services agency, said. Federal subsidies, meanwhile, would reduce the cost of health coverage for many New Mexicans using the exchange.
According to Martinez administration officials, the exchange would function as a clearinghouse, a one-stop shop where insurance companies and consumers could cross paths.
The state’s model is a virtual marketplace Utah set up several years ago. It is one of two statewide exchanges in the U.S. Massachusetts, which was a model for the federal health care law, operates the other.
The two states’ competing visions of how an exchange should operate offer a contrast in styles.
Massachusetts empowers the board of directors of the agency operating its exchange to remove insurers from the marketplace and negotiate premiums. Utah takes a more hands-off, market-oriented approach.
The goal in Massachusetts was to help supplement private-sector health insurance to achieve near-universal coverage of its population, according to the independent state agency running the exchange. As of last fall, the exchange had approximately 192,000 enrollees.
By contrast, Utah has a narrower scope, extending coverage to employers who can’t afford health insurance for workers. It gives more than 7,500 state residents and 318 small businesses a choice of 140 health insurance plans, according to Utah’s governor, Gary Herbert. The state’s exchange would expand to include plans for individuals seeking health insurance in the future, Herbert said.
Consumer advocates here in New Mexico had hoped the Martinez administration would opt for the Massachusetts model.
Kelsey Heilman, staff attorney at the New Mexico Center on Law and Poverty, an organization that lobbies for low-income New Mexicans, hopes the state can find some middle ground. Heilman attends regular meetings of the task force advising the administration on the exchange. Perhaps, the state could award a good-seal-of-approval to certain plans and not others, Heilman said.
Much to do, so little time
With only months to ramp up to a working exchange, some have wondered if the Martinez administration waited too long to start the process.
“We’ve lost a lot of time,” said Deborah Armstrong, director of New Mexico’s high-risk pool, an independent program created by the New Mexico Legislature in 1987 to help residents who can’t afford health coverage in the commercial insurance markets, usually because of pre-existing conditions.
Armstrong is a member of the task force advising the Martinez administration on the exchange.
“We can fix it, but we have to go forward working together,” Stewart, the lawmaker, said.
Martinez’s deputy chief of staff Scott Darnell defended the administration’s progress, saying it has worked toward creating a state-based exchange since early in the governor’s tenure.
Last week, the federal government granted conditional approval to New Mexico to build the exchange. According to a letter from U.S. Health and Human Services Secretary Kathleen Sebelius, the conditional approval reflected Washington’s expectation the state would create a marketplace compliant with the federal health care law and that would be ready to offer “affordable, quality” coverage by 2014.
New Mexico’s path, however, has been bumpy.
In early 2011, Martinez vetoed legislation passed by the Legislature to create an exchange, citing court challenges to the federal health care law. The U.S. Supreme Court would later uphold the law.
Almost a year later, in March 2012, an Albuquerque doctor tasked by Martinez to help administer the state’s efforts to create the exchange resigned. Dr. Dan Derksen said at the time he had lost a battle over what he claimed was the slow pace of the exchange’s creation.
At the same time Derksen resigned, New Mexico stopped seeking bidders for a $24 million contract that would have funded construction of the exchange’s computer framework. The money was part of a $34 million federal grant the state won in November 2011. At the time, state officials said they wanted to take a more deliberative approach.
The Martinez administration then turned to a former Bush administration official for help. Leavitt Partners, a Utah firm founded by Michael O. Leavitt, President George W. Bush’s secretary of Health and Human Services and an administrator at the Environmental Protection Agency, won a yearlong consulting contract valued at around $1 million.
As of late December, the state had spent only about $500,000 of the $34 million federal grant New Mexico won more than a year ago. And hiring a vendor to build the exchange’s computer framework won’t happen until early this year, Nuñez said.
State officials say the federal government has helped create delays, at times forcing states to wait for regulations on how to set up certain aspects of an exchange.
Turning an idea into reality
A way to think of New Mexico’s progress is that it is in the architectural phase. Now comes the hard part: transforming what’s on paper into reality.
“There are a lot of moving parts,” said Aaron Ezekiel of the New Mexico Division of Insurance, who sits on the advisory panel. Ezekiel reaches into 20th-century American history for what he thinks is the closest analogy. “I tell myself to try and remember what I read about Medicare in 1960s and Social Security in 1930s,” Ezekiel said.
Foremost, some say, are the technical challenges like communications between state and federal agencies.
In addition to providing a clearinghouse where people can shop for health coverage, state exchanges are supposed to help people learn if they qualify for Medicaid, the government’s health insurance program for the poor.
According to the U.S. Census Bureau’s American Community Survey, New Mexico had the second-worst poverty rate in the nation in 2011, with 21.5 percent of the state’s population – or 439,914 – living in poverty.
“We’ll send in an application to the federal hub,” Nuñez said. “The federal government will verify citizenship, the income of the individual. If the individual qualifies for Medicaid, we’ll send them to Medicaid. If they don’t qualify, we’ll show them a range of plans (on New Mexico’s exchange) and subsidies they might qualify for. Even if they don’t qualify for subsidies, we’ll show them insurance plans.”
New Mexicans who make more than 138 percent of the federal poverty level — around $15,000 for an individual and nearly $32,000 for a family of four — are eligible to use the exchange.
New Mexicans making 138 percent of the federal poverty level or lower will qualify for Medicaid after the governor announced Wednesday she would expand the program under the health care law.
The state must also consider New Mexico’s ethnic, racial and linguistic diversity.
New Mexico is home to 22 federally recognized tribes, meaning about 200,000 Native Americans live in New Mexico, or close to a tenth of the state’s population. Some Native Americans feel more comfortable conversing in their tribal language, of which there are several in New Mexico, than in English.
In addition, some New Mexicans prefer to only speak Spanish.
To market the exchange, then, the state must find people who know how the exchange works in all its intricacy and can translate that clearly. But in addition to finding English and Spanish speakers, New Mexico must find speakers fluent in one or more of the tribal languages spoken in New Mexico.
The alliance already is working with tribal representatives to develop ways to communicate specifically to Native Americans, such as using public service announcements on radio shows such as Native American Calling, Singing Wire, and through the Native American Radio.
The challenges ahead
Another challenge facing New Mexico is ensuring that residents can access health care once they use the exchange.
Only one of New Mexico’s 33 counties – Los Alamos – has enough providers to adequately care for its population, according to the federal government’s Health Resources and Services Administration.
“It’s all hands on deck. We need nurses, nurse practitioners,” said Dr. Arthur Kaufman, of the Office for Community Health at UNM Health Sciences Center in Albuquerque.
Retired physician J.R. Damron agreed.
“You can have all the insurance you want, but if you can’t get in to see your providers, then there’s going to be an access-to-care problem,” said Damron, a former gubernatorial candidate who has pushed for an exchange in New Mexico for several years.
Trying to accommodate New Mexicans who would rather buy health insurance in person than online gives officials another matter to resolve.
“We are working on that right now,” Nuñez said, adding the alliance plans to set up a call center to handle customer calls and help people enroll.
“We’re thinking of having the call centers refer brokers and navigators out to in-person calls.”
That would satisfy many tribal members, said Ken Lucero, director of the Robert Wood Johnson Foundation Center for the Native American Health Policy at the University of New Mexico. “We are going to see our people wanting to sit down with a person.”
Roxane Bly, Director of the Bernalillo County Off-Reservation Native American Health Commission, considers an in-person option important.
“Most people wouldn’t buy a car over the Internet,” she said. “Most people wouldn’t do that. They want to meet face to face.”