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Gov. Bill Richardson’s administration will limit enrollment in a rapidly growing program that offers taxpayer-subsidized health insurance for low-income adults.
The Human Services Department estimates it could save $16 million a year in state money to help with a looming budget shortfall if the cost-cutting measure keeps 10,000 people from joining the program.
Enrollment has increased by 1,000 to almost 3,000 people monthly during the past year as the economy slumped.
The department announced Thursday it will stop enrolling individuals in the State Coverage Insurance program early next month. Individual applicants will be placed on a waiting list and may receive coverage if an available slot opens.
Uninsured New Mexico workers can continue to enroll if they are part of an employer-sponsored group.
“The waiting list is an effort to keep this very important program up and running to serve as many New Mexicans as the department can fund,” said Human Services Secretary Pam Hyde.
About 45,000 New Mexicans get insurance through the program, and a third of those are part of groups in which the employer pays a share of the premiums along with the employee. The state and federal government pick up the rest of the cost.
Currently, an eligible individual can obtain health insurance through the program without an employer participating. The cost varies depending on the individual’s income. In some instances, the individual must pay the employer’s share of the premium, about $75 a month per person. Depending on family income, the individual’s cost ranges up to $35 a month for each person who is covered.
Individuals with household income below 200 percent of the federal poverty level can qualify for the program. That’s a yearly income of $21,660 for an individual or $29,140 for a family of two.
The subsidized insurance coverage was started in 2005 through Medicaid, the state’s largest health care program. The main goal was to help smaller employers offer affordable health insurance to their workers, and the state will keep the program open to employer-based groups because “we wanted to stay true to that as much as we can,” said Betina Gonzales McCracken, a spokeswoman for the department.
Medicaid’s costs have grown during the recession as more New Mexicans ask for government-financed health services.
New Mexico faces a budget shortfall for Medicaid that could reach $300 million next year. The program may exceed its budget this year by $40 million. The unexpected expenses aggravate an overall state budget deficit currently projected at more than $400 million, but which some lawmakers say will reach at least $550 million and perhaps $700 million.
The department is considering a wide range of cost-cutting steps for Medicaid, including eliminating some medical benefits or lowering reimbursements to health care providers.
About $386 million in state and federal money is budgeted for the State Coverage Insurance program this year, but actual costs are expected to be higher. About $251 million was spent on the program last year although final figures are not yet available. The federal government pays for about 80 percent of those costs.
The department said applications received after Nov. 2 will be placed on a waiting list. If the department is unable to finish processing an application received between Friday and Nov. 2, then the individual will be placed on the waiting list.