New Mexico: A few more points of interest re. #HB400 #MedicaidForward, the Medicaid Public Option bill

UPDATE 3/8/23: HB 400 just overwhelmingly passed the New Mexico House!

HUGE NEWS! #HB400 just passed the House Floor by a vote of 58-10! Huge thanks to Rep. @reenaszcz & Speaker @JavierForNM for their work carrying #MedicaidForward through the House of Representatives & to everyone who reached out to their legislator. On to the Senate! #nmleg #nmpol 

— NM Together for Healthcare (@NMT4HC) March 8, 2023

UPDATE 3/17/23: BOOM: HB 400 just passed the New Mexico Senate along party lines (24-15, with 3 Senators abstaining or voting present).

As noted below, while I believe this bill technically authorizes the program, in reality it mainly just authorizes a study & design of the program to be submitted by October 2024. After that, separate legislation would have to be passed in order to fund the new program before it could actually be implemented starting in January 2026.

Regardless, this is still a huge deal.

Last week I took a fairly in-depth look at New Mexico's HB400, aka #MedicareForward, the bill which, if enacted implemented, would make New Mexico the first state in the U.S. to take the initial steps to* have a true "Public Option."

*Correction: This bill would only result in a study & design of the program, not the program itself. After the study & plan design is completed and submitted to the legislature by October 2024, the legislature would then need to pass legislation to actually fund it. Apologies for the misunderstanding.

The basic idea (which has been proposed before at both the state and federal levels) is to simply open up the state's Medicaid program, which currently only covers most residents who earn up to 138% of the Federal Poverty Level, to all residents, with those earning more than 138% FPL paying premiums on a sliding income-based scale to buy into the program.

The bill has already passed the House Health & Human Services Committee 7 to 3; it's expected to move onto the next legislative hurdle soon.

You can read the full write-up here, but I still had some questions, so earlier this week I spoke for about an hour with Nicolas Cordova of New Mexico Together for Healthcare about the program; he was able to fill in some of the blanks. Unfortunately, I didn't record it and my notes were a bit haphazard due to not having slept well the night before, so I only have a fraction of what we discussed that's worth adding to the story.

Again, read the main write-up first...most of the bullet points below won't make sense out of context:

• The "103,000 public employees" referenced in my writeup does include dependents of employees--it actually refers to the total number of NM residents enrolled in the state employee health plan--but it doesn't include any county or municipal employees or their dependents...some of whom may also be enrolled in the state health plan depending on their arrangement with the state government. In other words, the actual total potential savings for the state could theoretically be even higher, although that's still an unknown.

• YES, the #MedicaidForward plan, if it actually passes and is implemented as currently envisioned (obviously still a big unknown) would indeed be open to any documented resident of New Mexico, although obviously many people would still choose to stick with their existing coverage, especially if they have to pay full price for the Medicaid plan.

• I asked Cordova about the "no federal waivers needed" bit (which is a real eyebrow-raiser) and am still confused about his response, which is likely due to my lack of sleep rather than his answer. He did say there might be a waiver needed to allow those who would otherwise be eligible for exchange APTC eligibility to instead qualify for Medicaid.**

**Clarification: Cordova says the state only needs a "state plan amendment" to implement the core of the program, similar to how DC has done in order to extend Medicaid's income cut-off up to 210% FPL. A federal waiver might be needed to let those newly eligible for Medicaid continue to be eligible for APTC subsidies if they decided to stick with an exchange plan, however.

• A lot of the details of the plan, such as just how generous the "sliding scale" premium cost would be for those earning more than 138% FPL and how far up the income scale it would go beyond 400% FPL are unknown until the $500K study referenced in the bill itself is conducted.

UPDATE: The NM Human Services Dept. projects that the total cost of the study would be around $1 million, with half paid for by the state & half via federal funding.

• Among the numerous other factors the study will look at is potential issues like high-risk out-of-state-residents who move to New Mexico to take advantage of the #MedicaidForward program after it's implemented and how that might impact the risk pool, costs, premiums etc.

• New Mexico is apparently in the process of increasing their Medical Loss Ratio (MLR) threshold for Managed Care Organizations (MCOs) from 85% to 90% regardless of whether HB400 passes/is implemented, which is kind of a Big Deal in and of itself.

• Cordova pointed out that while health insurance carriers are likely not thrilled about #MedicaidForward overall, many of their ACA exchange carriers are also their MCO carriers, so it would mostly be the same people shifting from one to the other...except that ACA exchange plan networks aren't always the same as Medicaid networks, even via the same carriers, so that could cause some issues.

• He also noted that another factor which may win over private insurers is that they might enroll a slice of employees working for companies which are currently self-insured. Thus, they might end up with a smaller slice of a larger pie, so to speak (or the same sized slice of a smaller pie, except there'd be two of them. Pick your metaphor.)

• There's also a shortage of healthcare providers in New Mexico (and other states) which would have to be taken into consideration considering the lower reimbursement rate that Medicaid pays vs. private insurance (even assuming those reimbursement rates are bumped up somewhat more, as would likely happen)

• One of the most important things to keep in mind is that a Public Option structured in this type of Medicaid buy-in fashion relies heavily on the fact that New Mexico has a very high FMAP rate. Only states with high FMAP rates would likely be able to make the math work in terms of what portion of the cost the state and/or enrollees have to cover, and 7 of the 8 states with the highest FMAPs (besides New Mexico) are heavily Republican: Mississippi, West Virginia, Alabama, Kentucky, Arkansas, South Carolina and Idaho. In other words, the other states which might be in a position to make this happen are also the states least likely to ever agree to do so (or perhaps not...see an upcoming blog entry....)