KNG Health Releases Final Report on New Mexico’s Health Security Plan

For Immediate Release

On July 15, 2020, KNG Health Consulting released “Fiscal Analysis of New Mexico’s Health Security Plan: Final Report,” a report on a fiscal analysis of the New Mexico Health Security Plan (HSP) as proposed in the 2019 Health Security Act (HSA), available here: https://www.knghealth.com/fiscal-analysis-of-the-new-mexico-health-security-act-plan/.  This report, which was submitted on June 30, 2020 to the New Mexico Legislative Finance Committee (LFC), will be used by the New Mexico Legislature as they consider developing a state health plan.

Since fall 2019, KNG Health Consulting, has been leading a team of consultants to support the state of New Mexico by performing a fiscal analysis of the HSP. The KNG Health team collaborated with the New Mexico LFC staff to develop alternative HSP modeling scenarios.  The team used the KNG Health Reform Model, a microsimulation model that uses data from the American Community Survey and other data sources to assess the impact of health reform proposals. On March 3, 2020, the team released preliminary report for public comment. After reviewing public comments, the team made a number of changes and additions to the analyses and the report. In addition, the team has made available a technical supplement on the construction of the analytic database.

The team examined four primary scenarios for structuring the Health Security Plan. The first two scenarios (1 and 2) assume premiums and cost sharing similar to typical employer-sponsored insurance (ESI) health plans (ESI-Comparable Scenarios), while the remaining scenarios (3 and 4) assume premiums and cost sharing similar to requirements under the Affordable Care Act (ACA) (ACA-Comparable Scenarios).  In some scenarios (1 and 3), the researchers assumed that provider and facility reimbursement rates grow with the Consumer Price Index for Medical Care (CPI-M), while in other scenarios (2 and 4), the researchers assumed that reimbursement rates grow at a slower rate. 

The study found that most of the cost of the HSP could be financed by redirecting public funding from duplicative health programs, requiring contributions from employers not offering coverage, and requiring enrollees with the means to pay a portion of their own premium costs. Key findings from the report include:

• Under the HSP, the state’s uninsured rate would likely fall well below 1 percent and the vast majority of the population would receive coverage through a public insurance program.  
• Total state health care spending would be lower than under current law across all scenarios, because of low HSP administrative costs (as proposed in the HSA).
• Current revenue sources would not be sufficient to fully fund the HSP under scenarios 1, 2 and 3, with budget shortfalls ranging from $5.8 billion (scenario 1) to $868 million (scenario 3) over the initial five years of the HSP.  The researchers found that no additional state funding would be required for scenario 4.

The full report and the technical supplement are available here: https://www.knghealth.com/fiscal-analysis-of-the-new-mexico-health-security-act-plan/

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