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New law limits insurance administrative costs

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Law will also stop discrimination against women in the pricing of medical insurance

By Barry Massey

SANTA FE — New state laws will stop discrimination against women in the pricing of medical insurance and limit how much health insurance companies spend on administrative costs.

Gov. Bill Richardson signed the measures into law on Tuesday, saying they will improve the state’s health care system.

“Currently, insurers in New Mexican can charge women up to 20 percent more than men for individual and small group health insurance plans. This is unacceptable,” Richardson said.

Under the new legislation, insurance companies must phase out by 2014 the use of gender as a factor in setting rates for medical coverage in policies directly sold to individuals and small groups of up to 50 workers.

Giovanna Rossi Pressley, director of the Governor’s Women’s Health Council, said it “takes a critical step toward making New Mexico’s health insurance markets more equitable.”

“It protects 37,000 New Mexican women who already have individual market coverage from gender discrimination, removes a barrier to fair and affordable coverage of the nearly 187,000 women in the state without health insurance and eliminates a discriminatory rating practice within New Mexico’s small group insurance market, which covers hundreds of thousands of people in the state,” she said at a news conference with Richardson.

Eleven other states restrict or prohibit gender rating for health insurance policies sold directly to individuals, according to the governor’s office.

Also signed by Richardson was a bill to require insurers to use at least 85 percent of their premium revenues to pay for direct health care services provided through small group plans and health maintenance organizations, and 75 percent for individual policies. The governor has advocated the change for several years as part of a health care reform initiative.

“This ensures New Mexicans will be getting the services they pay for and they deserve,” he said.

The state Legislature approved the health care measures during a 30-day session, which ended last month.

Other bills signed into law will:

• Eliminate a verdict of guilty but mentally ill in criminal cases. Currently, a jury can find a defendant guilty, not guilty, or guilty but mentally ill.

• Increase a tax on oil production when prices exceed $70 a barrel, to provide revenues for an oil and gas reclamation fund. The extra money is to help in remediating a brine well that could collapse in Carlsbad.

•  Shore up New Mexico’s unemployment insurance trust fund, which pays benefits to jobless workers. Richardson signed the measure on Monday. It will raise taxes on businesses starting in January 2011 to raise $20 million and transfers $100 million from a reserve account to help rebuild the unemployment fund.