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Except for the last paragraph, the Health Security Act features described in the left column
below are direct quotes from the Health Security Act Summary of 2005.
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Health Security Act
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NM Health Choices
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Benefits
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Everyone covered by the NM Health Care Plan receives the same benefits regardless of age,
income, employment or health status. Coverage must be at least as comprehensive as the state employees’
health plan. NM Health Care Plan members and employers may buy supplemental
health insurance, should they wish to do so.
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A health insurance Alliance makes a few health benefit plans available to most New Mexicans under 65,
at the same cost regardless of age, income, employment or health status. Plans can be purchased either
through an employer's cafeteria benefit plan using employer and employee contributions; or purchased
directly from the Alliance using vouchers funded by employers, supplemented by personal dollars.
Low-income residents get additional premium and cost-sharing assistance to ensure health care
is affordable to all.
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Choice
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New Mexicans covered by the Plan have complete freedom to choose their licensed health care provider,
hospital, pharmacist, or clinic. The NM Health Care Plan can contract with providers and health
facilities across state lines. If a New Mexican is injured or becomes ill out-of-state: the out-of-state
hospital or physician will bill the NM Health Plan. The NM Health Plan will pay the negotiated rate.
There will be no extra hidden charges.
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New Mexicans have a choice of medical (incl. behavioral), dental and other plans, allowing them to suit their
personal preferences regarding premiums, coinsurance, customer service, and covered benefits. Just
like today's health plans, some strive to contract with all providers, while others have a preferred
provider network in exchange for a lower cost. All plans reimburse out-of-state expenses at some level;
some plans may offer more comprehensive national and international coverage than others.
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System management
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A publicly accountable, geographically representative nongovernmental 15-member Commission is
responsible for the New Mexico Health Care Plan. Hospitals, clinics, HMOs, private practice physicians,
pharmacists, and other providers negotiate budgets and fees with the Commission. The NM Health Care
Plan prohibits additional billing (“balance billing”) by doctors and hospitals that treat Plan members.
The NM Superintendent of Insurance is required to lower automobile and workers' compensation premiums,
which have large health components. Regional Councils created with local input work with the
Commission to make recommendations to the Commission about local health care needs including health
facility operating budgets. The Health Resource Certification Program assures that major capital
investments (equipment, buildings, etc.) will be made where they are needed. The Commission defines
premium and employer contribution schedules with public input and legislative approval.
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A statewide health insurance purchasing Alliance defines minimum contract terms and through a bidding
process selects 4-5 private insurers offering for a few different benefit packages. It standardizes
information materials and coordinates an annual statewide enrollment procedure. It defines uniform
incentives for cost-effective and healthy behaviors (e.g. penalties for smoking, missing appointments,
paper-based billing and credits for healthy weight or workplace wellness). The Alliance has no role in
negotiating provider fees, defining premiums and detailed benefits, or deciding medical facility
budgets.
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Funding
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The Plan is funded by pooling existing public monies, such as Medicaid and Medicare, as well as
employer contributions and individual premiums (with caps). Premiums are determined by income,
not by age, gender, occupation, region, or health status.
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Low-income assistance, special needs and children's coverage is funded through Medicaid, savings in
state programs, and state income taxes. Vouchers for workers who buy plans directly through the
Alliance are funded using an hourly tax from their employers.
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Cost control
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Costs are controlled primarily through budgetary planning that takes into account
technology, an aging population, and other factors. There will be bulk
purchasing of drugs and other medical equipment and supplies. Savings result
from the elimination of duplicative administrative costs built into the present system
of multiple insurance plans and policies. Insurance company savings, formerly
used for marketing, commissions, out-of-state investments, and profits, are
made available for health care services.
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State healthcare costs become predictable and controllable. The legislature
determines the amount of revenue, i.e. individual and business taxes, and the
amount of spending, i.e. individual voucher amounts. There is no guessing of
healthcare utilization or facility budgets. Significant savings come from
streamlined enrollment, premium collection and removal of broker fees.
Increased competition among insurance carriers pushes costs down.
Flexibility and innovation in wellness programs, benefit design, provider relations,
data mining and targeted disease management are key to long-term cost control.
Most of all, a privately run system is much less vulnerable to the intense political
pressure to increase fees, benefits and budgets that will assault the industry-regulating
commission envisioned by the Health Security Act. That commission's extraordinary powers
to regulate such a high-stakes industry will inevitably fuel conflict between stakeholders,
make positive changes very difficult to achieve, and hugely increase medical costs
in the long run.
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Impact on healthcare industry
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[Not part of the NM Health Security Act Summary] With the possible exception of "gap" coverage offerings and employers providing benefits
under ERISA, medical insurance companies are eliminated as well as insurance
brokers and employers’ medical benefit administrators. Providers must agree to
the fee schedule defined by the Commission for all patients covered by the NM Health Plan,
since they are prohibited from balance billing, or request mediation.
This may aggravate the provider shortage in New Mexico.
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Medical insurance companies are preserved with a modified focus. They no longer
calculate risks, monitor usage and manage contracts for thousands of small
employee pools. They design and advertise individual plans in a more
competitive environment with lower administrative costs. Insurance brokers and
employers’ medical benefit administrators are eliminated. The relationship of providers
to patients and insurance carriers is unchanged.
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For more information
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