Coalition seeks statewide insurance plan
By Winthrop Quigley Albuquerque Journal Staff Writer
A coalition of more than 75 organizations are asking the state Legislature to replace conventional health insurance with a single statewide insurance plan that bases premiums on the insured’s income.
The Health Security for New Mexicans Campaign argues that health care financing is too badly broken to be repaired and should be replaced. The campaign contends that millions of dollars can be saved on administrative costs if a single health insurance plan replaces the variety of products offered by health insurance companies.
The plan faces tough sledding in the state Legislature. Similar bills have been defeated in the past, and Gov. Bill Richardson has consistently said he opposes a single-payer health system.
Richardson prefers allowing uninsured New Mexicans to voluntarily join state-supported insurance plans already in place, including the plan covering state employees. He has also proposed tax credits to help small businesses afford health insurance for employees.
However, the Health Security for New Mexicans Campaign boasts a number of marquee names among its members, including the League of Women Voters in New Mexico, Albuquerque Health Care for the Homeless, several labor unions, the New Mexico Public Health Association, and several health policy and social policy advocacy groups.
Jerry Montoya, health promotion specialist in Valencia County for the New Mexico Department of Health, said Valencia County residents are especially hurt by the high costs of health insurance because of the county’s high poverty level. Montoya said the response the coalition has received in Valencia County has been very positive.
“We are a poor community,” he said. “We’re impacted even more. … One of the things that the Health Securities Campaign has been doing here in Valencia County is going out and doing presentations to various groups. Those presentations have been very well-received, because people are actually wanting to talk about health care reform, because they know there is a problem. They are eager to hear solutions.”
In two Journal-sponsored public opinion polls, a majority of New Mexicans have said they support a single taxpayer-funded health plan.
The campaign’s proposal faces almost certain opposition from the statewide business lobby, the Association of Commerce and Industry, according to J.D. Bullington, the group’s lobbyist.
The basics of the proposal have been offered off and on over the years by former Sen. Manny Aragon, D-Albuquerque, and former Rep. Max Coll, D-Santa Fe. The 2005 legislation is expected to be introduced by Santa Fe Democratic Rep. Luciano “Lucky” Varela, according to the Health Security for New Mexicans Campaign.
“I haven’t read the latest proposal,” Bullington said. “However, our organization is adamantly opposed to a government-run, single-payer health care system.”
The Health Security for New Mexicans Campaign would pool public and private monies, including Medicaid funding and health insurance premiums paid by individuals and employers, into a single fund. The health plan would be required to provide insurance at least as good as that offered to state employees. The coverage offered each insured would be identical, regardless of the member’s age, income, employment or health status would be based on income, not health status or age.
In an interview, campaign executive director Mary Feldblum said she could not estimate how much administrative costs would be cut, but she cited studies by The Lewin Group in several states, including a 1994 study in New Mexico, that show large state-sponsored insurance pools could offer meaningful savings.
John Sheils, a Lewin Group vice president, said in a telephone interview, “What we’ve generally shown is that a carefully designed single-payer plan can result in covering more people for more services for a tad less money. There is not a lot of money saved.”
Savings in most states Lewin Group has studied would pay for providing “most of the care you’d provide to the uninsured or underinsured.” But Sheils cautioned, “It’s going to be harder to achieve that result in New Mexico because you have lots of uninsured people.”
An estimated 414,000 New Mexicans are without health insurance.
Local health insurance plans say their own administrative costs are about 10 percent or less of total spending.
A single risk pool containing most of the state’s residents “will have some market clout” when negotiating with providers and drug companies, Feldblum said. “We have too many tiny pools,” which increases the insurance company’s risks, she said.
Sheils agreed, saying, “If you put everyone in one program with one benefit package, you probably could generate some sizable administrative savings.”
But when plans include spending constraints, technology isn’t upgraded as rapidly, providers stop offering some services, and quality of care and access to care can erode.
“There are more MRI (machines) in San Francisco than in the entire nation of Canada,” which operates a single-payer health plan and restricts spending, Sheils said. “If you are 68 years old in Britain and need kidney dialysis, you’re going to die.”
“I think as a nation, we’re really strange about this,” Sheils said. “We don’t seem to make the connection that to have the miracle of modern medicine coming our way, we have to pay for it.”
Under the coalition proposal, health care providers would operate the same way they do today. Patients could choose which providers to use. Providers would negotiate payment with a 15-member commission that would run the health plan. Premiums could be changed only with approval of the state Legislature.
The plan’s commissioners, appointed by the governor, would also have authority to review providers’ budgets to “ensure that resource allocation is based on the health care needs of different communities.”
Capital spending by providers such as hospitals would have to be certified.
The campaign in its literature promises unspecified “cost containment measures” that will produce “savings that can be invested in needed health care services.”
Federal retirees and active and retired military health plan members could not join the pool because of federal legal restrictions. Indian tribes could choose to join the pool. Plan members could choose to buy additional commercial insurance.
Bullington said the experience of Tennessee, which expanded its Medicaid program to encompass adults without health insurance, and the problems New Mexico has affording its own, more limited Medicaid program demonstrate the campaign’s ideas won’t work.
The Tennessee program “is imploding,” Bullington said. “It will bankrupt and fail.”
The Tennessee program in 1994 extended Medicaid benefits to cover the working poor, uninsurable adults and traditional Medicaid-eligible populations. The program eventually consumed one of three state tax dollars. Last year, Gov. Phil Bredesen began dismantling it and reinstating traditional Medicaid.
“We still steadfastly believe that we have not exhausted market solutions,” Bullington said. “We believe the existing structure can be salvaged and improved to provide affordable health care without overhauling the entire system and increasing the role of government.”