Briefing on Insure New Mexico! Council Legislative Health and Human Services Committee

1. Briefing on Insure New Mexico!Council Legislative Health and Human Services Committee August 25, 2005

2. Objectives for today’s discussion • Insure New Mexico! Council • Development and goals • Council recommendations • Legislative Initiatives • Legislation passed • Budget initiatives • Remaining Recommendations • Outreach and Marketing • Other Possibilities 1

3. Minutes on www.insurenewmexico.state.nm.us. Insure New Mexico! Council WasAppointed to Address the Issue of the Uninsured Governor Richardson appointed 25 member council, chaired by Lt. Governor Diane Denish • Charged with Recommending and Implementing Strategies to: • Reduce the number of uninsured, and • Increase the number of employers that offer health insurance for their employees • 34 Recommendations sent to Governor Bill Richardson – 6 passed legislation • 2005 – Working on Remaining Recommendations and Several New Ones • Report due to Governor in December 2005 2

4. The Council has reviewed studies, data and research • The Insure NM! Council has held 10 full-day meetings beginning in September 2004 • The Council consists of diverse, statewide representatives of small businesses, nonprofit organizations, employees, labor unions, human resource management, chambers of commerce, health insurance carriers, health insurance brokers, legislators and state government • Meetings include: • presentations by experts and by Council members, • review of data currently available and commissioned as surveys, • discussions of initiatives from other states, past efforts in New Mexico, and new, innovative approaches 3

5. The Council made recommendations to decrease the uninsured • 34 recommendations to decrease rate of uninsurance and increase number of small employers who offer insurance. • 4 pieces of legislation passed and signed • Health Insurance Alliance – Expand functions and reduce rates ≤ 10,000 lives • Small Employers Insurance Program≤ 3,000 lives • Allow 19-25 year olds to continue on parent’s individual coverage • Require insurers to offer insurance to part time employees≤ 4,000 lives • 2 Budget Initiatives • Implement State Coverage Insurance (SCI) Program ($4 million in General Fund) ≤ 10,000 lives • Increase Medicaid outreach to enroll Native American and Hispanic children ($1 million General Fund) ≤ 5,000 lives 4

6. Insure New Mexico! Council has remaining recommendations A.Increase Insurance Options • Partner health insurancebenefits to employers of any size who want to provide this coverage. • State-subsidizedreinsurance plan similar to HealthyNY model • Subcommittee looking at options • Presentation of statewide reinsurance proposal by Don Letherer • Essential benefits with fewer mandated benefits and annual or lifetime caps. (Maes and Beffort bills) • Examined various state programs: Maryland, Washington, Texas, New York • Subcommittee analyze barriers to flexible limited plans in New Mexico and explore possible implementation of essential benefit plans with limited mandates. • Minimum Healthcare Protection Act, HMO Act & creation of standard benefit package (e.g., TX) with and without mandates 5

7. The Council is also looking at tax incentives B.Tax Incentives for Small Employers • Tax creditfor businesses that provide health insurance for part-time employees working at least 20 hours a week. Credit estimated to benefit 7,000 part-time employees (a total of 10,000 individuals, with families). • Graduated tax credit for small businesses (25 employees or less OR less than 10 employees) that offer health insurance for their employees • Small businesses currently offering health insurance receive a 5% tax credit; small businesses not currently offering health insurance receive a 10% tax credit declining to 5% in second year • Tax credit designed to entice small businesses to begin and continue to offer health insurance for employees • Tax credit estimated to benefit 5,000 employees (a total of 7,500 individuals, with families) • Tax Credit for small businesses offering insurance for families with small children or for low-income employees 6

8. Utilizing Medicaid is anotherpossibility being looked at by the Council C.Medicaid 1. Increase Medicaid coverage adults up to 100% of the federal poverty level (FPL) by developing a limited benefit plan for such adults with appropriate cost-sharing, beginning with adults with children up to 50% FPL (currently ~ 33% FPL). (< 11,000 lives) 2.Increase coverage for: • Prenatal care up to 235% FPL (now 185%) (< 1200 woman) • Infants and toddlers up to 300% FPL (now 235%)(< children to age 19) 3. Increase aggressive outreach to families with children (grow enrollment to 430,000 by end of FY 2007) 4. Expand SCI ($4 million GF for ~ 7,000 lives) 7

9. The Council has looked at howto utilize NM buying power D.Use New Mexico Clout 1. Expand the use offederally-qualified health centers (FQHCs) and primary care clinics 2. Increase use of telehealth and electronic billing 3. Developin-state healthcare capacity in New Mexico so fewer dollars are spent out-of-state and are instead redirected towards in-state providers 4. Give preference in doing business with the state or getting access to industrial revenue bonds to companies who offer health insurance for their employees. • The Governor should call on New Mexico businesses to give preference to vendors, contractors and supplies that offer health insurance for their employees 8

10. Education and outreachcontinue to be key proposals E.Increase Knowledge of Health Insurance Options 1. Educate the public regarding prevention and wellness and the link to reducing the cost of health insurance premiums. 2. Train brokers and increase HIA’s outreach capacity to small businesses. 9

11. Outreach and MarketingNM HIA Television Ad 10

12. Radio ads for NewMexikidsare being launched • English Medicaid Outreach Ad • Spanish Medicaid Outreach Ad • Navajo Medicaid Outreach Ad 11

13. Outreach and MarketingInsure New Mexico! Brochure 12

14. Outreach and MarketingInsure New Mexico! Brochure 13

15. The Council has looked at revenue possibilities Revenue to Pay for Recommendations • Close tax loophole for smokeless tobacco products and target to uninsured From 25% to 40% = ~ $2.3 million • Increase liquor excise tax and target to uninsured from five cents a drink to 15 cents a drink would generate an estimated $72 million • Use part of any uncompensated care savings to pay for the health insurance of low-income populations after the insurance options are implemented (e.g., ME model) • Assure individuals and employers participate appropriately in the cost of insurance made available through these recommendations (e.g., appropriate co-pays, premiums based on income, mandates, etc.) • Maximize federal revenue through use of Medicaid for low-income and targeted populations • Repeal GRT exemption on “junk” food 14

16. Insure New Mexico! Council is looking at other possibilities • Market-Based Universal Coverage • www.nmhealthchoices.org-Presentation by Celia Ameline • Mandates on employers and individuals • State role in collecting funds and providing vouchers • Voucher amount depends on income and health status • Vouchers used to purchase private sector insurance • Mandates or Encouragement to Provide Wellness Benefits • Presentation by Susan MacLean, The Solutions Group • Sub-Committee investigating options and coordination with Department of Health • “WalMart Mandates” for Large Employers • “Pay or Play” type mandate for large employers • Maryland’s S.B. 790 requires private-sector, for profit employers with 10,000 or more employees in the state to spend at least 8% of their payroll on health care or pay the difference between their health insurance expenses and the percentage threshold into a new Fair Share Health Care Fund, which directs the funds to Medicaid program 15

17. Insure New Mexico! Council hasexplored some options but not pursed Health Savings Accounts (HSA), and other consumer driven models investigated but not considered to be in need of Council intervention; no legislation needed for market to do HSAs within current law and new products are being developed by the market. 16