Bryant Furlow/New Mexico In Depth
Days ahead of an application deadline for $20 million in federal funding, the N.M. Human Services Department seized control of the request from the state’s independent Division of Insurance last month, documents and interviews show.
State Superintendent of Insurance John Franchini’s division had drafted a grant request that described regulatory oversight and streamlining enrollment in the state’s yet-to-be-built virtual health insurance marketplace, also known as an exchange.
But in the final application that went to Gov. Susana Martinez for approval, those sections were absent, having been removed by the Human Services Department (HSD), according to interviews and a comparison of the draft and final applications.
The governor signed the heavily edited grant application May 14, sending it on to the U.S. Department of Health and Human Services early on May 15, the day of the application deadline.
If Washington approves the grant, the $20 million will help New Mexico reach out to and enroll residents who are eligible to use the marketplace. New Mexico has one of the highest rates in the country of residents without health coverage.
The last–minute edits offer a glimpse into the behind-the-scenes, inter-agency tensions over how New Mexico should go about setting up its health insurance exchange.
But the changes, which included the replacement of the word “enrollment” with “marketing” in some cases, have advocates worried that New Mexico will emphasize marketing contracts over old-fashioned face-to-face time to spread the word to people who are eligible to use the exchange. Such face time is especially important, they say, when it comes to reaching out to rural New Mexicans and Native Americans who rely on personal contact.
After the changes, the grant application “disproportionately funds marketing and outreach as opposed to actual application assistance,” said Kelsey Heilman, a staff attorney at the New Mexico Center on Law and Poverty.
An analysis of draft and final versions of the grant request shows, in addition to the replacement of the word “enrollment” with “marketing,” the human services agency in dozens of instances removed the words “enroll” and “enrollment” from the final application.
Matt Kennicott, spokesman for the Human Services Department, suggested the changes were semantic.
“The board voted to apply for a grant only for marketing, outreach and education,” Kennicott said. “I think that’s why ‘enrollment’ was replaced by ‘marketing.’ I think enrollment can be encompassed in marketing.”
Critics, however, say they are concerned the changes set the stage for the state to rely on public relations contracts and broadcast media campaigns like TV and radio advertisements, rather than person-to-person outreach and application assistance.
Jason Sandel, vice chairman of the New Mexico Health Insurance Exchange Board, which is charged with overseeing the virtual marketplace, said advertisements won’t work as well as employing trusted individuals in Indian Country and rural New Mexico.
“I strongly believe that we need ‘boots on the ground’ – people knocking on doors and going to chapter houses,” Sandel said, mentioning political subdivisions in the Navajo Nation. “The enrollment function is one we cannot lose sight of.”
Advocates say the state has a vested interest in enrolling as many individuals as possible. For the exchange to work effectively, they say, the state needs a large pool of insured people. A governing principle in health insurance is that for it to be successful, the financial risk should be shared in as large a pool of individuals as possible, making enrollment and application assistance key to the insurance exchange’s success, they say.
The final request edited by the Human Services Department “isn’t very clear about how it’s going to reach out to underserved communities,” noted Heilman of the New Mexico Center on Law and Poverty. “We are still waiting for specifics.”
Looming challenges to successful outreach
In arguing their case for the importance of face-to-face interactions, advocates point to the enormity of the task before New Mexico in designing and setting up the exchange.
Roughly the size of New England and New York put together, New Mexico is a largely rural state. A sizable portion of New Mexico’s population lacks access to the Internet — a potential problem for an online exchange.
Then there is New Mexico’s ethnic and cultural diversity.
New Mexico is home to 22 federally recognized Native tribes, and about 200,000 Native Americans live here. That’s close to a tenth of the state’s population.
Enrolling uninsured people in the exchange, then, will require people who know how the exchange works in all its intricacy and who can translate the system clearly to help guide applicants through the enrollment process, advocates say. In addition to training English and Spanish speakers, New Mexico must also find speakers fluent in tribal languages.
In many communities, spreading the word will require “a multitude of community players – churches, providers, community organizations, government entities as well as the availability of person-to-person assistance in a variety of settings at the local level for at least the first 18 months of the Exchange,” Health Action New Mexico Executive Director Barbara Webber wrote in an email.
New Mexico’s grant application acknowledges that maximizing enrollment will require an effective in-person assistance program, and says the state will contract with organizations that will, in turn, recruit people to assist New Mexicans eligible to use the virtual marketplace.
But it is unclear how many people will be hired, how many of them will be paid, or how much.
Additional federal funding for assistor salaries can be requested in August, but it is not yet clear if the new board will choose to do so, said Dr. J.R. Damron, the chairman of the health insurance exchange board who was appointed by Gov. Susana Martinez.
“We don’t know what we’re going to need,” Damron said.
In internal HSD e-mails dated April 29, agency officials estimated 200 full-time employees, at a cost of up to $11.75 million, would be needed to help New Mexicans learn if they qualify to shop for health coverage on the exchange or are eligible for Medicaid, the government’s low-income health insurance program.
New Mexicans who earn 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.
The agency’s last-minute changes to the draft request that had been formulated by the New Mexico Division of Insurance stemmed from “major concerns” raised by Martinez’s Human Services Secretary Sidonie Squier, Kennicott confirmed.
Squier e-mailed the board about her concerns on a Friday afternoon, May 10. By the following Monday, Damron had handed over control of the grant request to Squier’s agency.
Squier felt that New Mexico’s Superintendent of Insurance John Franchini had overstepped his authority by including in the draft things the newly formed Health Insurance Exchange Board had not approved, Kennicott said.
For example, Franchini’s draft included mention of plans to streamline the state’s Medicaid and health insurance marketplace computer systems, to simplify the application process for uninsured New Mexicans. The Affordable Care Act requires such “no wrong door” integration of enrollment systems, to allow people to find out at one place whether they are eligible for Medicaid or to use the health insurance marketplace.
In the same May 10 e-mail to board members, Squier wrote decisions related to Medicaid, which her agency administers, should be made by her and not the exchange board.
Franchini’s draft also included descriptions of regulatory oversight and mention of a consumer-assistance call center.
“We saw policy decisions that the board needs to make rather than going through a grant application,” Kennicott said when asked about the elimination of two dozen pages of proposed regulatory oversight, accountability measures and mention of a consumer-assistance call center, among other things.
Franchini did not respond to the administration’s claim despite several calls and e-mails seeking comment.
Not everyone on the board liked the changes.
“I think there was a lot of time and effort put into the grant prior to the final edits,” Sandel said. “It’s unfortunate that some items were pulled out.”
Giving control of the grant to Squier’s agency simplifies the eventual transfer of federal grant money to the board, Damron said.
Squier’s agency already administers a separate $34 million grant to set up the exchange, and has pledged to turn over the money from both grants as soon as the board has filed incorporation papers and secured a bank account, and the federal government has reviewed the board’s corporate structure.
Had Darmon left the new grant with Franchini’s Division of Insurance, the board would have then had to coordinate transfers of funds from two state agencies, instead of one, he said.
“It’s easier to get your money from one agency than two,” Damron explained.
“The chair [Damron] handed the process over, I think in part because of our close working relationship with the governor and the tight time frame involved,” Kennicott said, noting the application had to be submitted Wednesday, May 15. “Somebody from outside the executive couldn’t have pulled it off.”