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New Mexico health insurance marketplace: history and news of the state’s exchange

4 carriers offering plans statewide, rates decreased slightly for 2019. New Mexico plans to have its own exchange platform in the fall of 2020

Highlights and updates

New Mexico exchange overview

State legislative efforts to preserve or strengthen provisions of the Affordable Care Act

Could New Mexico be doing more to preserve the Affordable Care Act’s provisions? Compare its efforts to other state-level actions.

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 2020. 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)


NM will operate its own exchange platform starting with the 2021 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 2020.

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 starting in 2019, federally supported state-based exchanges, like New Mexico’s, must pay user fees to the federal government, amounting to 3 percent of premiums. The fee is 3.5 percent of premiums in states that have a federally-run exchange or a partnership exchange, so federally-supported state-based exchanges will be paying only slightly less than the states that have fully federally-run exchanges (for 2020, HHS has proposed reducing these fees to 2.5 percent and 3 percent, respectively).

Prior to 2017, state-based marketplaces using the federal enrollment platform were able to use the Healthcare.gov platform for free, while funding and operating the rest of their exchange functions themselves. HHS planned to start charging these states 3 percent of premiums as of 2017, but the fee was gradually phased in (starting with 1.5 percent in 2017 and 2 percent in 2018).

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.

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.

Nevada is planning to transition back to having its own exchange platform as of the fall of 2019, and Oregon is also considering the possibility. In both cases, the increasing user fees for state-based exchanges to utilize the HealthCare.gov platform are a motivating factor. But having an autonomous enrollment platform also gives a state more control over its marketplace, including the option to offer longer open enrollment periods.

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 has 17,884 members.
  • 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 – 2019

45,001 people purchased private individual market plans (QHPs) in New Mexico’s exchange during the open enrollment period for 2019 coverage.

That was nearly a 10 percent drop from the year before, when 49,792 people bought plans during the open enrollment period for 2018 coverage. And 2018’s enrollment was almost 9 percent lower than the 54,653 people who had enrolled for 2017. So enrollment in New Mexico’s exchange is down nearly 18 percent from its peak in 2016. Nationwide, total exchange enrollment for 2019 was about 9.5 percent lower than it had been in 2016, with about 1.2 million fewer enrollees. But enrollment had dropped more precipitously in New Mexico’s exchange.

Enrollment in 2016 was nearly 5 percent higher than the 52,358 people who enrolled during the 2015 open enrollment period. And the New Mexico exchange enrollment growth for 2016 has to be considered in light of the fact that half of the people who were enrolled through the exchange as of late 2015 were on Blue Cross Blue Shield of New Mexico plans that were discontinued at the end of the year when BCBSNM opted to leave the exchange for 2016 (they returned again as of 2017), and had to opt for a new plan in order to retain coverage in 2016.

34,966 people enrolled in private individual market plans through New Mexico’s exchange for 2014, the first year that exchange plans were available. Open enrollment that year lasted for six months, and additional extensions were granted at the end of the enrollment window.

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 continue 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, created a summary of 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, which ended in mid-March. The issue will likely continue to be considered in the state, as lawmakers did approve additional funding for further study of Medicaid buy-in.

NM Health Connections CO-OP partnered with Evolent Health for employer-sponsored plans

New Mexico Health Connections (NMHC), one of the four carriers offering plans for 2019 in the New Mexico exchange, is a CO-OP (consumer oriented and operated plan) 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 2019 — New Mexico Health Connections is among them.

But the CO-OP has 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 continues to be a non-profit, and has since been focused entirely on the individual market, where they had about 18,000 enrollees in 2017.

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 — the subsidiary of Evolent that was created in New Mexico — established an administrative services agreement that allows them to support NMHC’s ongoing operations in the individual market, while letting NMHC continue to be an independent non-profit.

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

Be Well New Mexico
For individuals and families (small businesses should contact healthcare.gov)

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

New Mexico Health Insurance Alliance

State Exchange Profile: New Mexico
The Henry J. Kaiser Family Foundation overview of New Mexico’s progress toward creating a state health insurance exchange.