Fight jeopardizes care of 1,500 critically ill New Mexicans

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More than 1,500 critically ill New Mexicans could face obstacles to medical coverage for the last six months of the year, state officials say.

The potential challenge has developed over the past few weeks due to a dispute between federal and state officials over how much Washington will pay to underwrite coverage for the critically ill population enrolled in a high-risk pool the state set up in 2010 at the federal government’s request.

Until recently, the federal government has paid all costs for the critically ill population, according to New Mexico Medical Insurance Pool executive director Reena Szczepansski and the pool’s vice chairman, Jason Sandel.

The medical insurance pool administers the federal high-risk pool as well as a separate state pool that covers 8,500 critically ill New Mexicans who won’t be affected by the dispute.

In recent months, however, federal officials have taken steps to trim costs in the high-risk pool the state set up at its request in 2010.

In February, Szczepansski and Sandel said, Washington told the New Mexico Medical Insurance Pool to stop enrolling individuals in the federal pool. Washington followed that up in recent weeks with news that it would pay only so much of the costs necessary to cover the 1,500 individuals from July through December of this year. The critically ill population would be covered starting Jan. 1 under the federal health care law.

The New Mexico Medical Insurance Pool has estimated it would take $20.31 million to cover the sick population for the last six months of the year, Szczepansski said. Typically, individuals in high-risk pools can’t find health coverage in commercial insurance markets because they require a lot of medical care, which translates into much higher costs than most individuals require under health insurance.

Federal officials, however, have offered to pay only $12.2 million, Szczepansski and Sandel said Friday.

“The practical result of that, the difference, somebody has to assume this risk,” Sandel said.

That sets up a decision for the New Mexico Medical Insurance Pool, whose board is meeting Tuesday morning. Let Washington take over covering costs for the 1,500 critically ill people by integrating them into a federal high-risk pool managed elsewhere. If the pool’s board decides to do that, the individuals would face higher premiums because the state currently discounts what they pay each month based on their income, Szczepansski said. The individuals also would pay larger out-of-pockets costs to trigger coverage for medical help when they need it and also might face uncertainty over whether their current doctors and specialists will treat them.

Or the New Mexico Medical Insurance Pool could come up with a way to cover the $8 million difference between what it has estimated the cost will be and what Washington will pay.

The New Mexico Medical Insurance Pool is currently funded primarily through payments assessed to the state’s health insurance carriers. Raising those assessments could pay for the extra cost, the two said.

But that would mean higher rates for insurers.

“The federal government doing this could cost the state of New Mexico and its carriers to pay more money,” Szczepansski said.

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