New Mexico can move ahead with establishing a state-run health insurance exchange under legislation signed into law Thursday by Republican Gov. Susana Martinez.
Martinez is one of a small number of GOP governors to opt for a state-run exchange under President Barack Obama's health care overhaul. States had the option of establishing their own exchange, leaving it to the federal government or forming a state-federal partnership.
The new law takes effect immediately, and one of the next steps is the appointment of a 13-member governing board for the exchange.
The exchange is to serve as a marketplace for the uninsured to buy medical coverage. One of the early decisions for the board likely will be selecting a contractor to establish a computer system, which will allow individuals and small businesses to shop online for health care plans offered by private insurers.
Uninsured individuals and families can receive federal subsidies to reduce the amount they pay for insurance. Small businesses can be eligible for a tax credit to help provide medical coverage for workers.
New Mexico faces a tight deadline —under federal law — to have the exchange ready to enroll the uninsured starting in October and be fully operating in January.
It's estimated that about 200,000 New Mexicans may be able to buy health insurance through the exchange by 2020.
"As I said during my State of the State address, I didn't support Obamacare, but it is the law of the land. My job is to implement this law in a way that best serves New Mexicans," Martinez said in a statement.
The exchanges have placed Republican governors in an awkward position, given how much the party has opposed the health care law. Nevada and Idaho are taking the state-run exchange approach while Iowa is pursuing a partnership with the federal government. Utah already has an exchange but it doesn't cover individuals, as required by federal law.
The Martinez administration previously had taken steps to establish an exchange through an existing organization — the New Mexico Health Insurance Alliance, which is a nonprofit public corporation established in 1994 to provide access to insurance for small businesses and some individuals.
However, work on the exchange was put on hold during the recent legislative session and because of the threat of a possible lawsuit challenging whether the governor could unilaterally create the new insurance marketplace. Attorney General Gary King contended that the Legislature had to change state law for the alliance to be able carry out federally managed duties of an insurance exchange.
Martinez and legislators eventually reached an agreement on legislation to create the framework for an exchange. One initial dispute was over the board's power, and whether it should be able to regulate what health insurance plans are offered to consumers. Federal law spells out minimum requirements for health coverage, and it will be up to the state insurance superintendent's office to determine whether plans meet qualifying standards.
"This may not be a perfect solution, but it is a start that helps keep New Mexico on the path toward the creation of a unique solution for New Mexicans," said Sen. Benny Shendo Jr., D-Jemez Pueblo, a sponsor of the measure.
The law requires a Native American service center to ensure the exchange's services are accessible for members of New Mexico's Indian tribes and pueblos.
The governor will name six board members, including the secretary of the Human Services Department, and legislative leaders will appoint six members. The state superintendent of insurance also is on the board but will vote only to break ties. The board must include two insurance industry representatives as well as a health care provider and consumer advocate.
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