Health exchange bill runs into trouble in House

February 28, 2013 • State News

SANTA FE, N.M. (AP) — A measure to establish a state-operated health insurance exchange stumbled in the House on Thursday after critics objected that the proposal would overly regulate medical coverage plans offered to consumers.

The bill initially failed in the House on a 39-30 vote — with eight Democrats opposing it. However, the measure was immediately revived and set aside, which will give majority Democrats a possible chance for another vote at a later date if they can round up more support or after making changes to meet some of the concerns of critics, including Republican Gov. Susana Martinez.

There’s also separate health exchange legislation in the Senate that could advance.

“We keep working on it,” Rep. Mimi Stewart, an Albuquerque Democrat who sponsored the measure, said in a text message after the House vote cast doubts over her proposal.

The exchange is envisioned as an online [auth] shopping center for people and small businesses to buy health coverage from private insurance companies.

Under federal law, the exchange must be ready for enrollment in October and be fully operating by next January. Nearly 200,000 New Mexicans may be able to buy health insurance through the exchange by 2020.

The governor already has taken steps to establish an exchange operated by the New Mexico Health Insurance Alliance, a nonprofit public corporation established in 1994. However, Democrats contend that the Legislature must approve changes in state law for the organization to handle the duties of the exchange mandated by a federal health care overhaul.

The Martinez administration initially maintained it could set up an exchange without legislation, but agreed to negotiate with lawmakers to avoid a possible court fight that could stall efforts to implement the exchange. Democratic Attorney General Gary King has said the law authorizing the alliance doesn’t conform to federal requirements for the exchange.

During House debate, Republicans echoed objections from the Martinez administration that the exchange’s proposed governing board would have too much regulatory power to decide what health insurance plans are offered through the exchange. Republicans and the governor want a “free market” exchange that automatically will offer all plans meeting basic qualifications.

“We should not commit to regulation of the exchange that is going to force our constituents to purchase Cadillacs at Cadillac prices,” said Rep. Terry McMillan, a Las Cruces Republican and physician. “We have plenty of time to build our own exchange more slowly and this bill over commits us.”

Stewart maintained the proposed governing board would have plenty of flexibility in its operations.

“That board could have a wide open market. The board could look at health insurance plans offered and ensure that they were relatively low-cost,” she said.

Stewart appealed to her colleagues to approve the bill so work on the exchange could proceed. While lawmakers and the governor deal with the questions about legislation, the alliance has put on hold an important decision on selecting a contractor to set up the computer system needed for the exchange.

“We want to ensure that the work that was done will go forward,” said Stewart. “If we don’t pass this legislation by the second week of March, we will either have to do a partner with the federal government or we will have to do a federal exchange because the New Mexico Constitution requires us to pass this law, not just have the governor do it.”

The Legislature adjourns on March 16. States had the option of running the exchange or letting the federal government do it.

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