Nuts and bolts of health reform, so far

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By Sherry Robinson

Meeting organizers explained that they didn’t intend to debate health care reform.

“We’re here to discover how New Mexico can get the maximum benefit,” said Dick Mason, of Health Action New Mexico, a nonprofit, consumer advocacy group.

Amen to that, I thought. That declaration and the meeting venue – a church sanctuary – were effective. No shouting, no posturing. A large, diverse, polite crowd really did want to learn how the new law was going to work. I wanted to know how it would affect New Mexico.

According to a recent poll, only 28 percent of Americans understand the reform law, which means expectations may be unrealistically high or low. “We believe the more people understand, the better able they will be to take advantage of its benefits,” Mason said.

New Mexico has a larger stake than most states, with a far greater percentage of uninsured people and higher premiums because the insured ultimately pay for the uninsured. The reform will insure 32 million of the nation’s 47 million uninsured; in New Mexico, that’s 315,000 of 434,000 uninsured. Illegal aliens will not be covered.

In case you’ve been on the moon, here’s an abbreviated list of other impacts: It will limit out-of- pocket costs for health care, prevent insurance companies from capping coverage, and close the Medicare drug benefit donut hole. The state’s 22,700 small businesses aren’t required to provide health insurance, but if they do they can expect tax credits and lower premiums through an insurance exchange. Rural areas will benefit by increased funding to the state’s 133 community health centers and school-based health centers.

Surprisingly, New Mexico is already farther down the road than other states.

We have a Health Insurance Alliance. Our high-risk pool for people with pre-existing conditions is one of the nation’s best, said Mo Chavez, state Superintendent of Insurance. We have a law prohibiting insurance companies from cancelling your insurance if you get sick – and it became the model for the national legislation. The federal law requires insurance companies to spend 80 cents of every premium dollar on health care; New Mexico already requires them to spend 85 cents. New Mexico allows parents to add young adult children to their policies. And we’ve had a grievance process for 10 years.

Chavez has some concerns, however. For one thing the federal reform’s rate guidelines “don’t mean much,” he said. “There will be nothing the federal government can do about unreasonable rates. We’ll have to deal with it on a state level.”

He’s more worried about young people. By 2014 they will have to buy insurance or pay a fee of $95, or 1.5 percent of their adjusted gross income. “One of my concerns is that, potentially, a lot of healthy young people will pay the penalty and not participate,” he said. “We need them in the pool.”

Health Action New Mexico sees reform measures cutting the deficit, but that’s a discussion for another time. A local impact I see is the tax on health-care devices, which will hit the state’s biotech industry.

Much is still unknown. As the federal reform takes effect, the state will need to adjust existing programs and processes to fit. Medicaid is a moving target. More people will be eligible, but a tight state budget will force cuts; by 2014 the federal government will pay 100 percent. Similarly, the Indian Health Service will benefit, but details aren’t yet clear.

In the last session, the Legislature created the Federal Health Care Reform Working Group of key members of the Public Regulation Commission and the executive and legislative branches. It meets for the second time on May 5, and Sen. Dede Feldman, an Albuquerque Democrat and working group member, encourages citizens to sit in.

“The heavy lifting is just beginning,” she said.

For more information, see www.healthactionm.org, randcompare.org, or www.Familiesusa.org, www.Consumerreporters.org/health.