SANTA FE, NM (STL.News) Gov. Michelle Lujan Grisham and Rep. Deborah Armstrong on Monday announced the introduction of legislation that establishes a new fund that will reduce the cost of health insurance and medical expenses for tens of thousands of working New Mexico families.
“Even before the pandemic, access to high-quality and affordable health care for every New Mexican was a non-negotiable priority of my administration,” Gov. Lujan Grisham said. “House Bill 122 will expand coverage for up to 23,000 uninsured New Mexicans in its first year and drive down premiums for tens of thousands of residents who receive coverage through the state exchange. This is a real difference-maker for New Mexicans.”
House Bill 122, sponsored by Rep. Armstrong, creates the Health Care Affordability Fund, which will be financed by replacing a recently phased-out federal fee on insurance companies with a state version by updating New Mexico’s existing surtax on insurance companies from 1 percent to 3.75 percent. These are fees that insurance companies paid the federal government for many years and will generate about $160 million in new revenue for the state annually.
Collecting this revenue at the state level gives New Mexico the opportunity to invest in health care affordability initiatives, such as reducing premiums and out-of-pocket costs for lower-and middle-income New Mexicans who purchase coverage on New Mexico’s Health Insurance Exchange and uninsured New Mexicans who don’t qualify for federal assistance on the state exchange.
“By lowering health care insurance costs. we can insure more New Mexicans, leading to better access to care, a healthier and more economically secure workforce and improved health outcomes,” said Rep. Armstrong.
The plan will bring additional federal dollars into the state as more people sign up for coverage.
“New Mexico is positioning itself as a leader in reducing consumer health care costs. By creating the Health Care Affordability Fund, New Mexico can make sustained investments in our people and their health. I applaud the efforts of the Governor and Representative Armstrong to protect consumers and lower costs,” said Russell Toal, New Mexico Superintendent of Insurance.
These dollars entering the state economy will create new health care related jobs and help health care providers who are struggling to stay afloat during COVID-19. Uncompensated care could be reduced by $43 million annually, according to findings from the Urban Institute. The program will also improve the economic security of up to 94,000 New Mexicans who will see lower costs under the program and diversify state revenue sources.