Health Exchange policies will cost less than feared

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A month ago, N.M. Superintendent of Insurance John Franchini was a nervous man, confiding that insurance industry executives were anticipating massive “70 or 80 percent” rate increases for some people buying policies through the Health Insurance Exchange, a planned virtual marketplace for uninsured New Mexicans.

Thursday morning, he was breathing a sigh of relief, saying things didn’t turn out that way.

“The proposed rates are very similar to what we have now – not much different at all,” Franchini said.

Insurers had warned that because the federal Affordable Care Act does not allow them to exclude people with pre-existing illnesses from coverage, they would have to charge everybody more for health insurance policies. Not so, according to Franchini.

“I think the hysterical fear of issuing policies without medical underwriting was neutralized as companies realized they’ll be enrolling more people,” he said.

Details about the proposed rates should be posted online at by this afternoon, Franchini said. There will be a 30-day period for public comment.

The rates still have to be reviewed by Division of Insurance actuaries, and only individual policy rates (not family rates) will be posted online, Franchini said. Nor will the agency be posting information, yet, about tax credits or subsidies available for uninsured New Mexicans who seek coverage after Oct. 1 on the planned online insurance marketplace.

Transparency, and competition kept rates low

Asked why rates were so much lower than insurance companies had predicted, Franchini and another source pointed to market competition and transparency, respectively.

New Mexico will now have five companies selling individual-market health insurance policies, rather than only three, Franchini noted.

That’s because Molina and New Mexico Health Connections, whose CEO, Dr. Martin Hickey, also sits on the N.M. Health Insurance Exchange Board overseeing the marketplace at which policies will be sold, have joined the state’s existing issuers: Blue Cross Blue Shield NM, Lovelace and Presbyterian.

Insurers seeking to participate in the marketplace also used the N.M. Inspection of Public Records Act to look at one another’s filings, prompting at least two companies to re-file and propose lower rates than they had originally sought, another source familiar with the filings told New Mexico In Depth.

Franchini presented the proposed rates Wednesday afternoon to staff from the state’s congressional delegation. “We were not trying to exclude anybody,” he said. “We just thought it would be prudent for them to be informed in case they got calls from their constituents.”

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