Highlights and updates
- Open enrollment for 2021 health plans ended on December 15, 2020. Residents with qualifying events can still enroll or make changes to their coverage outside of open enrollment.
- New Mexico Health Connections will close at the end of 2020, but two new insurers joined the marketplace for 2021. Remaining insurers have proposed modest rate changes for 2021.
- Short-term health plans can be sold in New Mexico with terms of up to three months, but there no longer appear to be any short-term plans for sale (fixed indemnity plans are available from various insurers).
- Legislation that was considered in 2020 would have imposed a tax to replace the ACA’s health insurance tax (repealed after the end of 2020) and used the revenue to make coverage and care more affordable for New Mexico enrollees. But the bill died in the NM Senate.
- Average approved rate increase was less than 1% for 2020. But average benchmark premiums fell by 6%, resulting in smaller subsidies and potentially higher after-subsidy premiums.
- New Mexico plans to have its own enrollment platform in place by the fall of 2021.
- Surprise billing protections signed into law in 2019, took effect January 2020.
- Average rates decreased slightly for 2019, after increasing sharply in 2017 and 2018.
- Insurer participation has remained very steady in New Mexico since 2014 (and is more robust than it was pre-ACA), but there have been some insurer entries and exits over the years.
- More than 42,000 enrolled for 2020, which is down about 22 percent from peak enrollment in 2016.
- Lawmakers considered a Medicaid buy-in program during the 2019 session. It did not pass, but is likely to be considered again in the future.
- For 2018 health plans, premium subsidy amounts depended on when people enrolled.
New Mexico exchange overview
New Mexico has a state-run exchange, beWellnm (also referred to as NMHIX, or the New Mexico Health Insurance Exchange), although the state uses the federal enrollment platform at HealthCare.gov for individual enrollments.
But New Mexico is planning to operate its own enrollment platform as of the fall of 2021 (they had initially planned to make this transition by the fall of 2020, but the board voted in 2019 to push the transition date out to the fall of 2021). For small businesses, New Mexico has its own SHOP exchange enrollment platform.
The New Mexico exchange has four insurers offering plans statewide, which means consumers in New Mexico have more insurer options than consumers in most of the rest of the country. This is because New Mexico requires participating insurers to offer at least one plan statewide at each metal level that the insurer wants to offer (Silver and Gold plans are required by the ACA; insurers can choose to offer plans at the other metal levels).
CO-OP closes at the end of 2020; two new insurers join state’s marketplace; remaining insurers propose modest rate changes
Open enrollment for 2021 health plans ran from November 1, 2020 through December 15, 2020. New Mexico residents with qualifying events can still enroll or make changes to their coverage outside of open enrollment.
New Mexico has four individual market insurers in 2020, but New Mexico Health Connections — one of just four remaining ACA-created CO-OPs in the nation — will close at the end of 2020 and will not offer plans for 2021. But two new insurers — Friday Health Plans and Western Sky Community Community Care (Ambetter/Centene) — joined New Mexico’s marketplace for 2021. So the total number of participating insurers has grown to five.
The insurers offering coverage in New Mexico’s exchange for 2021 proposed the following average rate changes:
- Molina: Average proposed rate decrease of 0.2 percent (SERFF filing number MHNM-1323980365). Molina’s rates also decreased slightly for 2020.
- Blue Cross Blue Shield of New Mexico (Health Care Service Corporation): Average proposed rate increase of 3.56 percent (SERFF filing number NWMC-132395831).
- True Health: Average proposed rate increase of 4 percent (SERFF filing number THNM-132414160).
- Friday Health Plans: New to the market so no applicable rate change.
- Western Sky Community Care (Ambetter/Centene): New to the market so no applicable rate change (Western Sky is currently a Medicare/Medicaid managed care insurer in New Mexico, but will expand into the individual market for 2021).
Presbyterian Health Plans, which offers plans outside the exchange, has proposed keeping their average rates unchanged for 2021 (SERFF filing number PBHP-132357273).
At ACA Signups, Charles Gaba initially calculated an average proposed rate increase of 9.9 percent for New Mexico’s individual market for 2021, although most of that was due to NM Health Connections’ rate increase proposal (nearly 32 percent; SERFF filing number NMHC-132376186). New Mexico Health Connection’s 14,000 members will all have to transition to other plans for 2021, but the overall proposed rate changes are much more modest across the three remaining insurers.
New Mexico Health Connections had struggled financially over the years, but had weathered the early rounds of widespread CO-OP closures. The economic downturn caused by COVID-19 resulted in declining enrollment, with some of the CO-OP’s members transitioning to Medicaid this year after losing their income. The CO-OP had about 17,000 members as of late 2019, and that had dropped to about 14,000 by August 2020.
The New Mexico Office of the Superintendent of Insurance has published a set of FAQs about the CO-OP closure. Notably, CO-OP members who have their coverage through the New Mexico exchange will be automatically enrolled in a comparable plan from another insurer if they don’t select their own replacement plan during open enrollment.
It’s noteworthy that SERFF filings indicate that in May 2020, New Mexico’s Superintendent of Insurance contacted all of the insurers that offer ACA-compliant coverage in New Mexico, stating “I would like for you to give consideration to offering at least one plan that has a lower max out of pocket limit than the plans currently offered on the Exchange. While I thank all the current offerors for their very reasonably priced current offerings, the single most common complaint we receive is about the $6-8k max out of pocket caps. For many enrolled through the Exchange, these maximums are truly unaffordable. I am afraid they also discourage some individuals from enrolling for coverage.” During the process of reviewing rates, insurance regulators have been specifically asking insurers how they accounted for this request in their proposals for 2021.
State legislation was considered in 2020 to replace the ACA’s health insurance tax and use the revenue to make coverage and care more affordable in New Mexico. But it died in the Senate in February.
The ACA’s health insurance tax will no longer apply after the end of 2020. So lawmakers in New Mexico considered legislation (H.B.278) that would have replaced the federal tax with one levied by the state and use the revenue to make health coverage and health care more affordable for people who buy plans through New Mexico Health Connection. Although the legislation passed in the House in February 2020, it died in the Senate without getting a hearing.
Health Action New Mexico’s policy director, Colin Baillio, explained that the amount collected under the state’s proposed tax would have been less than the insurers are currently paying under the ACA’s health insurance tax. The federal tax isn’t a set percentage — it’s based instead on the amount of revenue that needs to be generated, and it generally amounts to roughly 2.75 to 3 percent of premiums.
H.B.278 called for an existing New Mexico tax, currently set at 1 percent of health insurance premiums, to be increased to 3.25 percent. So the new tax would have been 2.25 percent of premiums, which is less than insurers currently pay under the ACA’s health insurance tax.
The money generated by this additional tax would have been directed to a health care affordability fund, and used “to provide initiatives to reduce the cost of health care coverage for New Mexico residents,” including measures such as state-funded premium subsidies and cost-sharing assistance. The legislation also stipulated that if the ACA is repealed (or overturned, as could be the case via Texas v. Azar), money in the health care affordability fund could have been used to maintain the affordability of insurance and health care in the state.
Prior to the bill’s passage in the House, Baillio noted that an updated version of the legislation called for 60 percent of the revenue from the new tax to be directed into programs that provide financial support to people who buy coverage through the exchange, while the other 40 percent could be used for a reinsurance program, new subsidies aimed at getting younger, healthier people to enroll, or a variety of other program.
Baillio explained that the idea was to focus the direct assistance from the health care affordability fund on providing additional help for people who qualify for the ACA’s subsidies but for whom coverage and care are still too expensive. But some of the other potential solutions, including subsidies for younger people and a reinsurance program, could bring down costs even for people with income too high to qualify for premium subsidies (getting more young, healthy people into the risk pool results in lower per-capita costs for everyone, and reinsurance also brings down pre-subsidy premiums across the board).
Consumer advocates are strongly supporting H.B.278 in an effort to improve access to coverage and health care in the state. Unfortunately, the bill did not advance in the Senate and thus did not pass in the 2020 session.
Colorado lawmakers have introduced a similar bill as of June 2020, designed to extend funding for the state’s existing reinsurance program and also provide additional state-based subsidies to make coverage and care more affordable.
California began offering state-based premium subsidies this year, and Washington is considering legislation and proposals that would create state-based premium subsidies as of 2022. Massachusetts and Vermont both also have state-funded subsidies for lower-income residents.
Christus leaves exchange, True Health joins exchange for 2020
There were four insurers in New Mexico’s exchange in 2020. but there were some changes: Christus, which had offered plans in the New Mexico exchange since 2015, failed to meet New Mexico’s QHP certification requirements, so its plans had to terminate at the end of 2019. Christus covered about 1,100 people in New Mexico’s individual market in 2019, all of whom needed to select new plans for 2020.
But True Health obtained individual market certification in New Mexico and offered coverage in the exchange as of 2020 — so New Mexico continued to have four exchange insurers. It’s noteworthy that True Health was created in order to take over New Mexico Health Connection’s employer-sponsored plans as of 2018 and allow NMHC to focus on the individual market. But as of 2020, both True Health and NMHC are offering individual market plans in the New Mexico exchange, in direct competition with each other.
New Mexico Health Connections (NMHC) is a CO-OP established with funding provided by the ACA. Of the 23 CO-OPs that began selling plans in the fall of 2013, only four are still operational as of 2020 — New Mexico Health Connections is among them. But New Mexico’s CO-OP will close at the end of 2020, leaving just three CO-OPs operational in the US as of 2021.
NMHC has long struggled with losses, and entered into a partnership in early 2018 with Virginia-based Evolent Health. Evolent created a new for-profit subsidiary, True Health New Mexico, which began covering the roughly 20,000 enrollees who previously had coverage under NMHC’s employer-sponsored plans. NMHC continued to be a non-profit, and has since been focused entirely on the individual market, where they had about 18,700 enrollees in 2019.
NMHC CEO, Martin Hickey, and the rest of the NMHC employees transitioned to True Health New Mexico at the start of 2018. Hickey is now the CEO of True Health New Mexico. Evolent paid $10.25 million to acquire NMHC’s commercial insurance membership, and True Health New Mexico established an administrative services agreement that allowed them to support NMHC’s ongoing operations in the individual market, while letting NMHC continue to be an independent non-profit. The administrative services relationship ended, however, at the end of 2019. For 2020, NMHC partnered with Friday Health Plans Management Services for plan administration.
Proposed rates for 2020 were initially filed in June 2019, but the New Mexico Office of the Superintendent of Insurance (NMOSI) gives insurers an opportunity to revise their filings, and all of them did so, proposing lower rates later in the summer. Here’s a summary of the rates that were approved by NMOSI in August 2019, amounting to a weighted average rate increase of 0.9 percent:
- Molina: Average rate decrease of 1.8 percent (SERFF filing number MHNM-131907245). Molina had previously filed for an average increse of 0.76 percent, but revised the rates in August and the lower rate filing was approved. Molina has 23,290 members as of 2019.
- New Mexico Health Connections: Average rate increase of 1.9 percent (SERFF filing number NMHC-131962433). Just as they did for 2019 (details below), NM Health Connections revised their 2020 rate proposal twice. In June, they proposed an average rate increase of 30 percent. That was revised to an average rate increase of 1.1 percent in July, and then again to an average increase of 1.9 percent in August. The final filing was approved. NMHC has 18,689 members in 2019.
- Blue Cross Blue Shield of New Mexico (Health Care Service Corporation): Average rate decrease of 6 percent (SERFF filing number NWMC-131939695). In June, HCSC proposed no rate change for 2020 (ie, a 0 percent change), but they revised their filing in July to propose a 6 percent average decrease, and that was approved by regulators in August. HCSC has 3,191 members in 2019.
- True Health: New to the individual market in New Mexico, so no applicable rate change (SERFF filing number THNM-131958689). True Health is projecting 10,000 individual market enrollees for 2020.
Although average rates increased only slightly for 2020 in New Mexico’s individual market, it’s important to note that average benchmark premiums in New Mexico decreased by 6 percent for 2020. Premium subsidies — which 80 percent of New Mexico exchange enrollees receive — are based on the cost of the benchmark plan. So when benchmark rates decrease more sharply than overall average rates — which actually increased slightly in this case — the result can be an increase in net premiums for enrollees who receive subsidies. This essentially makes coverage less affordable than it was the year before, which could be a factor in New Mexico’s lower enrollment for 2020.]
There’s an interesting note in the filing details for True Health: The insurer initially estimated that their risk adjustment receivables would amount to $19.24 per member per month, or about 4 percent of premiums. But they later revised that to 5.5 percent, which would have allowed them to reduce their proposed premiums. However, they submitted this modification to state regulators outside of the rate filing amendment period, so they were required to keep the estimated risk adjustment receivables at 4 percent of premiums.
This is what True Health explained in the filing notes:
“True Health is new to the individual market without any experience. The review was focused on actuarial assumptions and we requested support for these assumptions. The Company initially assumed a risk adjustment factor of 4.0%. The Company revised this assumption to 5.5% and this change was outside of the allowable amendment period. We requested additional support for the risk adjustment assumption. Ultimately, there was a conference call between Lewis & Ellis, True Health and the NM OSI. The Company provided adequate support for the 4.0% risk adjustment assumption. However, modifying this assumption outside of the amendment period was disallowed sine this would be an unfair advantage. The Company was required to revise the assumption back to the 4% of premium receivable.”
But this is what the New Mexico Office of the Superintendent of Insurance explained:
“True Health is new to the individual market without any experience. The review was focused on assumptions like risk adjustment that required adequate support. The support provided continued to be inadequate in responses to inquiry and in fact, went further away from what would typically be expected as a new market entrant with low rates. Changes were made outside of the allowable amendment period. Ultimately, there was a conference call between Lewis & Ellis, True Health and the NM OSI to discuss. We were able to come to a reasonable conclusion that the Company had a reasonable rationale for the direction of the risk adjustment assumption (as a receivable). However, the conclusion was made that the Company did not provide enough support that they should be allowed an unfair advantage of revising the assumption after the amendment period, so the Company was required to revise the assumption back to the 4% of premium receivable.”
State will operate its own exchange platform starting with the 2022 plan year
New Mexico has a unique exchange; the state runs the small-business portion, and while the individual exchange is also technically state-run, HealthCare.gov is used to enroll people in individual insurance (ie, a federally supported state-based marketplace). But the exchange is planning to establish its own enrollment platform that will be in use by the fall of 2021.
Initially, the state had planned to establish a state-run website for individual enrollments fairly soon after the exchanges went live in the fall of 2013, and that was still in the works until early spring 2015. But in April 2015, the exchange board voted to continue to use HealthCare.gov, as that was viewed as the less-costly alternative.
New Mexico’s exchange had completed about 75 percent of its enrollment website when HHS changed the design guidelines in the fall of 2014. The exchange then applied for a $97 million federal grant to help pay for the website changes as well as other costs, but the grant was denied. Ultimately, it was decided in 2015 that continuing to use Healthcare.gov would be the most fiscally responsible option. And the state has continued to use the federal enrollment platform ever since.
But although the federal government initially didn’t charge state-based exchanges for the use of HealthCare.gov, they began doing so as of 2017. In 2020, state-based exchanges that use HealthCare.gov must pay a user fee equal to 2.5 percent of premiums, which will continue to be the fee in 2021 (this is a reduction from the 3 percent that was charged in 2019).
In 2018, BeWellnm (the state-run exchange) paid $5.4 million to the federal government for the use of the HealthCare.gov enrollment platform. For 2019, it was expected that the exchange would have to pay $10.9 million to use HealthCare.gov. In order to reduce user fees, the exchange board considered the issue during a September 2018 board meeting, and voted unanimously to transition to a fully state-run exchange in time for the 2021 plan year.
The exchange put out a request for proposals in the fall of 2018, but board members noted in November that only one company (Public Consulting Group, PCG) had submitted a proposal. Board members also voted on a request for proposal for Independent Validation & Verification, and another for Procurement Management. So the process of creating a state-run enrollment platform was underway by the end of 2018.
In 2019, the exchange board voted to push the transition time frame out by one year, so Bewellnm will be the official exchange platform starting in the fall of 2021 (instead of 2020), when people are purchasing coverage for 2022.
A presentation during the March 2019 board meeting indicated that New Mexico will begin to reap cost savings from switching to a state-run exchange by 2023 or 2024. There will be an initial spike in costs as the state pays for the creation of the new exchange, but costs will then decline sharply and flatten out. On the other hand, continuing to use HealthCare.gov would mean that the cost to use the exchange would climb as premiums increase over time, since it’s based on a percentage of premiums.
H.B.100, enacted in early 2020, provides legislative guidance for the fully state-run exchange. It builds and expands on S.B.221, which was enacted in 2013 and established guidelines for the creation of New Mexico’s exchange. H.B.100 adds various provisions, and grants additional authority to the exchange board, including the option to create standardized plan designs and establish appropriate enrollment periods (fully state-run exchanges can offer longer enrollment periods, whereas states that use HealthCare.gov do not have any flexibility in this area).
Nevada transitioned back to having its own exchange platform as of the fall of 2019. Pennsylvania and New Jersey plan to do so in the fall of 2020. Oregon and Maine are also considering the possibility.
New Mexico’s new surprise balance billing protection took effect January 1, 2020
During the 2019 legislative session, New Mexico enacted SB337, which took effect in January 2020, protecting New Mexico residents (who have state-regulated health plans) from surprise balance billing.
Balance billing happens when a patient uses an out-of-network provider and the provider bills the patient for any portion of the charges that aren’t covered by health insurance. The “surprise” part refers to situations in which the person either had no choice but to use an out-of-network provider (ie, an emergency), or situations in which the patient used an in-network facility but was — usually unbeknownst to the patient — treated by an ancillary provider at that facility who wasn’t in the patient’s insurance network (eg. anesthesiologists, radiologists, pathologists, assistant surgeons, etc.).
Under the state’s new law, patients cannot be charged more than their regular in-network cost-sharing obligations (copays, deductible, coinsurance, up to the maximum out-of-pocket level for their plan) if they:
- receive emergency care at an out-of-network facility.
- receive non-emergency care from an out-of-network provider at an in-network facility, as long as the patient either had “no ability or opportunity” to receive the care from an in-network provider instead. This includes situations in which there is no in-network provider available.
The New Mexico Office of the Superintendent of Insurance has clarified all of this in a bulletin that was published in May 2019.
As is the case with any state-based rules, New Mexico’s new law does not apply to self-insured plans in the state, which are regulated under federal law (ERISA) rather than state law. Most very large group plans are self-insured, but the new rules apply to individual market plans in the state, as well as fully-insured (as opposed to self-insured) group plans.
Average rate changes in 2019, plus a look back at how rates have changed since 2014
On the heels of sharp rate increases in New Mexico’s individual market for 2018, many consumers saw small rate decreases for 2019.
Insurers that offer on-exchange coverage were instructed by the New Mexico Office of the Superintendent of Insurance (NMOSI) to add the cost of cost-sharing reductions (CSR) only to on-exchange silver plans and the identical versions of those plans offered off-exchange (different silver plans offered only off-exchange do not have the cost of CSR added to their premiums).
In early 2018, Molina had threatened a possible exit of the individual market in New Mexico due to the impending loss of their Medicaid managed care contract. But Molina did file on- and off-exchange plans — with a proposed reduction in rates — and a revised filing, submitted in mid-August, indicated that they would continue to participate in the exchange, and with an even more significant rate reduction than they had originally proposed.
New Mexico exchange insurers implemented the following average rate changes for 2019:
- Molina: decrease of 6 percent (25,045 members). Molina had previously filed for an average decrease of 0.4 percent, but revised the rates even lower in mid-July.
- Christus: 4 percent average increase. Christus originally filed an average rate increase of 14.9 percent, but submitted a revision in mid-August, requesting an average rate increase of just 4 percent, which was approved by the Office of the Insurance Commissioner. Christus has 2,298 members.
- New Mexico Health Connections: An average decrease of nearly 7 percent. NMHC had initially filed for an average rate increase of 14.54 percent in June 2018. But in July, they submitted a revised filing with an average rate decrease of just over 2 percent. Then in August, they made another revision, asking for even more of a rate decrease (-6.95 percent), which was approved. NMOSI indicated that the lower proposed rates were an effort by NMHC to ensure that they’d have competitive rates in 2019. NMHC had 17,884 members as of 2018.
- Blue Cross Blue Shield of New Mexico (part of Illinois-based non-profit Health Care Service Corporation): No rate change (0 percent). An earlier filing had called for a 9.2 percent average increase, but the filing submitted in July revised the rates to reflect an average change of 0 percent for 2019. Blue Cross Blue Shield of New Mexico has 3,582 members.
Off-exchange, Presbyterian Health Plan implemented an average rate increase of 18.5 percent. Presbyterian had 20,288 off-exchange members in 2018, and their plans continue to only be available off-exchange in 2019.
Age-based 2019 premiums for each plan (before any premium subsidies are applied) are available here, in a chart compiled by the Office of the Insurance Commissioner. Overall, average premiums, before subsidies are applied, are decreasing by about 1 percent in 2019 in New Mexico’s individual market (at ACA Signups, Charles Gaba calculates a slight average increase in premiums for 2019).
Here’s a summary of how average premiums have changed in New Mexico’s exchange over the years (these numbers are all based on unsubsidized premiums; subsidies help to smooth out rate fluctuations from one year to the next):
- In 2015, the weighted average rate change was a decrease of 1.65 percent. This was especially good news given that in 2014, the lowest cost bronze plan in the NM exchange averaged $217 a month, quite a bit lower than the national average of $249.PricewaterhouseCoopers LLC conducted rate analysis across the entire individual market, including on and off-exchange plans. For New Mexico, the weighted average they found for all six carriers was an increase of 1.4 percent. But a Commonwealth Fund analysis of just the plans in the exchange found an average rate decrease of 1 percent.
- For 2016, BCBSNM did not offer plans in the exchange. The four remaining carriers in the exchange all said that they were ready to accept an influx of new enrollees switching off of BCBS plans. And all four of them proposed much smaller rate increases than BCBS for 2016. Average rate changes that year ranged from a decrease of 2 percent for Molina to an increase of 4 to 17 percent for NM Health Connections. Overall, the average benchmark (second-lowest-cost Silver) plan in the New Mexico exchange is 7 percent more expensive in 2016 than in 2015 (an earlier HHS report pegged the increase at 25.8 percent, but that was because New Mexico Health Connections plans weren’t appearing in the quote system due to the technical glitch, and their rates weren’t taken into consideration when HHS initially analyzed the change in second-lowest-cost premium).
- In 2017, with Presbyterian’s exit and BCBSNM’s return, four carriers offered 57 plans in the New Mexico exchange. Their approved average rate increases for 2017 were substantial, ranging from nearly 16 percent for Christus to more than 93 percent for BCBSNM. The average benchmark plan in New Mexico was 29 percent more expensive in 2017 than it was in 2016 (compared to an average of 22 percent across all 38 states that used HealthCare.gov in 2016).But to keep that data in context, we have to note that New Mexico’s average benchmark premium was the lowest of all those 38 states in 2016, and even with the 29 percent average increase, New Mexico’s benchmark premiums are still among the lowest-priced in 2017. They average $224/month for a 27-year-old, versus an average of $296/month across all the states that use HealthCare.gov.
- For 2018, rate increases were substantial in New Mexico. BCBSNM raised their average rates by about 26 percent, NM Health Connections by about 28 percent, Christus by about 49 percent, and Molina by more than 56 percent. But New Mexico’s 2017 premiums were well below the national average. New Mexico were allowed to file two sets of rates, to accommodate the uncertainty that the Trump Administration created in the individual market. Of great concern to insurers — and playing a significant role in rate increases for 2018 — were the questions surrounding federal funding for the ACA’s cost-sharing reductions (CSR). By September, the insurers in New Mexico had all assumed that CSR funding would end, and had officially added the cost of CSR to silver plan premiums for 2018. The Trump Administration ultimately did terminate CSR funding on October 12.The cost of CSR was added to premiums for silver exchange plans and the mirrored off-exchange versions of those silver plans, but NM OSI confirmed that there were also silver plans available in New Mexico for 2018 that were only sold outside the exchange, and thus did not have the cost of CSR added to their premiums. The fact that the cost of CSR was added to silver plans resulted in larger premium subsidies for all subsidy-eligible enrollees in 2018, since subsidies are based on the cost of silver plans.Although the cost of CSR was added only to silver plan premiums, NM OSI also confirmed that Blue Cross Blue Shield of New Mexico also added the cost of Native American cost-sharing reductions to all plans for 2018 (Native Americans can purchase $0 cost-sharing plans if their income doesn’t exceed 300 percent of the poverty level). NM OSI noted that the cost of Native American CSR only added about 0.5 percent to 2 percent to the overall premiums for 2018, and the other three insurers didn’t account for it in their rate filings. Essentially, BCBSNM was concerned that the potential elimination of CSR funding would include elimination of Native American CSR funding, so they added that cost to their 2018 premiums as well. CMS confirmed in November that all CSR funding had ended, including funding for the enhanced benefits for Native Americans. Although it’s a much smaller total cost to insurers than regular CSR, insurers that didn’t add the cost of Native American CSR to their 2018 premiums had to absorb the cost of enhanced benefits for Native Americans, while BCBSNM baked that cost into their premiums.
Enrollment in New Mexico’s exchange: 2014 – 2020
Enrollment in New Mexico’s exchange peaked in 2016, but has declined by about 22 percent since then:
- 2014: 34,966 people enrolled
- 2015: 52,358 people enrolled
- 2016: 54,865 people enrolled
- 2017: 54,653 people enrolled
- 2018: 49,792 people enrolled
- 2019: 45,001 people enrolled
- 2020: 42,714 people enrolled
Across most of the states that use HealthCare.gov, enrollment tended to peak in 2016 and decline each year since then.
Insurer participation in New Mexico’s exchange
Insurer participation in New Mexico’s exchange has been much more consistent over the years than insurer participation in other states. There have been four insurers offering plans statewide in New Mexico every year except 2015, when there were five. But there has been a bit of musical chairs in terms of which insurers offered plans each year.
The Santa Fe New Mexican reported that there were only two health insurance companies offering individual coverage in New Mexico pre-ACA, so competition has increased in the state under the ACA. John Franchini, New Mexico Superintendent of Insurance, explained in 2016 that in terms of access to coverage and plan choice, New Mexico “in a much better place than we were four years ago. It’s getting better and better.”
In 2014, plans were available in the New Mexico exchange from Blue Cross Blue Shield of New Mexico (Health Care Service Corporation), Molina Healthcare of New Mexico, New Mexico Health Connections (one of the few ACA-created CO-OPs still operational as of 2019), and Presbyterian Health Plan.
In 2015, Christus Health Plan joined the exchange, and the four existing insurers continued to offer plans. The five insurers offered a total of more than 40 plans through the New Mexico exchange in 2015.
But for 2016, the New Mexico exchange dropped back down to four insurers after Blue Cross Blue Shield of New Mexico opted to leave the exchange at the end of 2015. In the summer of 2015, Blue Cross and Blue Shield of New Mexico filed a proposal to increase premiums for 2016 by an average of 51.6 percent. The announcement generated headlines nationwide, standing out even among some of the relatively steep rate increases proposed in other states. BCBS garnered about a third of the market share in the New Mexico exchange in 2015, so their proposed rate increase would have had a significant impact on the market.
But in early August, the New Mexico Office of the Superintendent of Insurance (OSI) denied the proposed rate hike, stating that the data submitted with the rate proposal didn’t justify a rate increase of more than 24 percent. BCBS rejected the rate change offered by the state, but came back in the following days and submitted new rates that they claimed had an average rate increase of 11.3 percent. But the OSI has said that they didn’t consider the secondary proposal to be a “real offer or realistic offer” and it was not accepted.
BCBSNM confirmed in late August that they would not be offering individual plans in the New Mexico exchange in 2016. They continued to offer one individual off-exchange plan — a bronze level HMO — with rates unchanged from 2015. This avoided a full market exit, meaning that BCBS preserved their option to return to the individual market with additional plans in 2017, which they decided to do (long-standing HIPAA rules prevent an insurer from returning to a market for five years after a full market exit).
So for 2016, plans were available in the New Mexico exchange from Christus, Molina, Presbyterian, and NM Health Connections. Individual market PPOs disappeared from the New Mexico exchange in 2016 (HMOs and EPOs help insurers control costs, so they’ve been steadily replacing PPOs in many markets).
Insurer participation changed again in 2017, but the total number of exchange insurers remained at four. Presbyterian Health Plan announced in July 2016 that they would transition to only offering off-exchange coverage in 2017. The carrier noted that their on-exchange enrollees were incurring 30 percent more claims than their off-exchange enrollees, and Presbyterian determined that their on-exchange business was not sustainable.
But Blue Cross Blue Shield of New Mexico returned to the exchange for 2017. BCBSNM requested an average rate increase of 83.1 percent for their HMO product, but later revised it to 93.2 percent and regulators approved the requested rate hike. BCBSNM did not raise the rates on their remaining off-exchange HMO product for 2016, so the 93.2 percent rate increase was in relation to the 2015 rates.
For 2018 and 2019, there were no changes. Covered continues to be available from BCBSNM, Christus, Molina, and NM Health Connections. Presbyterian initially filed rates and plans to once again participate in the exchange starting in 2019, but ended up withdrawing that filing, noting that “due to concerns with current market environment, PHP has decided to continue offering plans only off the exchange.”So Presbyterian’s plans continued to be available only outside the exchange in 2019.
And although Molina threatened to exit New Mexico altogether at the end of 2018 when their Medicaid managed care contract was not renewed, that did not come to pass. An updated Molina rate filing, submitted in mid-August 2018, indicated that Molina was still planning to participate in the exchange in 2019, despite the fact that they still had a pending challenge to the Medicaid bidding process at that point. Molina’s plans continue to be available in the New Mexico exchange in 2019, just as they have since 2014.
For 2018 plans, subsidies differed depending on when people enrolled
In November 2017, for the first 18 days of open enrollment for 2018 coverage, Christus plans didn’t show up on HealthCare.gov. This was apparently due to the fact that the final rates didn’t account for the lack of CSR funding, and were thus suppressed by the federal exchange (the situation is outlined here, but the revised rate filing that Christus submitted in September included the cost of CSR added to premiums and the assumption that CSR funding would not continue in 2018, so it’s unclear why there was a problem with the rates).
Christus plans became available on HealthCare.gov on November 18, more than two weeks after the start of open enrollment. And in some areas of the state, the newly-available Christus plans took over the second-lowest-cost silver (benchmark) spot, with lower prices than the plan that had held the benchmark spot for the first couple weeks of open enrollment. This was important, because premium subsidies are based on the cost of the benchmark plan, and are designed to make that plan affordable — if the benchmark plan suddenly becomes less expensive, the subsidies for everyone in that area (regardless of what plan they choose) will decline commensurately.
People who enrolled in early November while the Christus plans were suppressed were able to keep the premium subsidies that they qualified for when they enrolled, and that’s what was reflected on their Form 1095-A for 2018 (which they should have received in early 2019). People who enrolled after the Christus plans were unsuppressed ended up getting smaller premium subsidies in some areas (since the benchmark plan in some areas became less expensive once the Christus plans became available) and those lower subsidy amounts showed up on their Forms 1095-A. So two people in the same area could have had different subsidy amounts in 2018 depending on when they enrolled, and those subsidy amounts remained in effect throughout the year.
CMS confirmed that this bulletin (see question 7) from 2016 was still applicable to this situation. They also confirmed that New Mexico was the only HealthCare.gov state that had suppressed plans at the start of the enrollment period for 2018 coverage, with only CHRISTUS plans suppressed.
Medicaid buy-in did not pass in 2019, but is likely to be revisited
New Mexico enacted two legislative memorials in February 2018 (SM3 and HM9) that called for a cost analysis of a Medicaid buy-in program in New Mexico. The idea was to determine the costs, along with pros and cons, of allowing New Mexico residents who aren’t eligible for Medicaid to purchase Medicaid if they choose to do so.
New Mexico Governor Michelle Lujan Grisham, who previously represented New Mexico in the U.S. House before winning the gubernatorial race in 2018, introduced legislation at the federal level in 2017 that would have allowed people to buy into Medicaid.
Colin Baillio, Policy Director for Health Action New Mexico, explained how Medicaid buy-in could work in New Mexico, and lawmakers considered Medicaid buy-in during the 2019 legislative session (H.B.416 and S.B.405). Both bills received committee approval in their respective chambers in February, but ultimately did not reach a final vote during the 2019 session. The issue will likely continue to be considered in the state, as lawmakers did approve additional funding for further study of Medicaid buy-in.
Establishing the exchange
New Mexico’s path to establishing an exchange was atypical. Then-Governor Susana Martinez, a Republican who opposed the federal health reform law, was the driving force in establishing an exchange and advocating for the state-run model.
Martinez designated that the Health Insurance Alliance to develop the state exchange. The Health Insurance Alliance is a nonprofit association of health plans created by the state Legislature in 1994 to offer health insurance coverage to small employers. Later, the Senate and House both approved a state-run exchange.
But New Mexico has always used HealthCare.gov’s enrollment platform for individual market enrollments, so the exchange has been classified as a federally-supported state-based exchange. That is expected to change by the fall of 2020, however, when New Mexico plans to unveil its own state-run enrollment platform and stop using HealthCare.gov.
New Mexico health insurance exchange links
Guide to the New Mexico Health Insurance Exchange
Includes details about carriers, important dates, eligibility and enrollment information
New Mexico Health Insurance Exchange
Administrative and start-up information
State Exchange Profile: New Mexico
The Henry J. Kaiser Family Foundation overview of New Mexico’s progress toward creating a state health insurance exchange.