Competitive Albuquerque Health Insurance Market Gears Up for Coverage Boom
Oct. 30, 2013
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, DCWith pragmatism prevailing in New Mexicoâ€™s political tug of war over national health reform, Albuquerque health insurers are eager to compete for new Medicaid enrollees and people eligible for subsidized private health coverage, according to a new Community Report released today by the Center for Studying Health System Change (HSC).
Funded by the Robert Wood Johnson Foundation (RWJF) and based on interviews with local health care leaders in 2013, the study examined the Albuquerque regionâ€™s commercial and Medicaid insurance markets.
While partisan differences and turf battles initially delayed implementation of key provisions of the 2010 Patient Protection and Affordable Care Act (ACA), state leaders have established a state insurance exchange and agreed to expand Medicaid to people with incomes below 138 percent of poverty as of January 2014. As a result, new carriers are entering the commercial health insurance market to offer products on the exchange, and Medicaid managed care plans are gearing up for a major state overhaul of the program that will coincide with an estimated 150,000 or more people gaining Medicaid coverage statewide.
Key findings of the report, Competitive Albuquerque Health Insurance Market Gears Up for Coverage Boom, which is available here, include:
- Many low-income residents. Albuquerque is home to many low-income people and workers in small firms who face challenges gaining health insurance. As a result, the ACA will likely produce dramatic coverage gains, as Medicaid eligibility expands and new federal subsidies become available for lower-to-middle-income people to buy private coverage in new state health insurance exchanges.
- Three competing hospital systems. Albuquerque hospital systemsPresbyterian Healthcare Services, Lovelace Health System and the University of New Mexico Health Sciences Centercompete in similar geographic service areas.
- Local health plan competition. Three insurance carriersBlue Cross Blue Shield of New Mexico (BCBSNM), along with two provider-owned plans, Presbyterian Health Plan and Lovelace Health Plancompete vigorously with national insurers like UnitedHealth Group in the nongroup and small-group markets.
- Limited networks accepted. Unlike many markets that have moved away from health maintenance organization (HMO) products that limit patientsâ€™ choice of providers, HMOs are common in Albuquerque.
- Overlapping commercial and Medicaid markets. In Albuquerque, most major health plans serve both Medicaid and commercial enrollees.
- Overhauled and expanded Medicaid program. Under a federal demonstration waiver, New Mexico is streamlining Medicaid managed carewhich will be known as Centennial Careby reducing the number of plans, integrating physical, behavioral and long-term care services that have been managed in a more piecemeal way, and steering patients to primary care.
- Competitive state insurance exchange. The three major local insurers are offering exchange products, and two new entrants to the commercial marketMolina Healthcare and New Mexico Health Connections, a co-op planare selling products in the exchange. BCBSNM has developed a low-premium, narrow-network product for the exchange, and other carriers are developing similar products.
As health reform unfolds in the coming years, there will be ongoing issues to track in the Albuquerque-area health care market, including:
- Will efforts succeed to enroll the large uninsured population in Albuquerque in Medicaid or subsidized private coverage on the exchange?
- What impact will the stateâ€™s overhaul of its Medicaid managed care program, coupled with the Medicaid expansion, have on health plan competition and enrolleesâ€™ access to services, provider payment and overall program costs?
- In the exchange, will BCBSNMâ€™s new narrow-network HMO be popular?
- How adequate will provider supply be as more people gain coverage and seek services, particularly in rural areas already struggling with provider shortages?
Albuquerque is one of eight metropolitan areas HSC researchers are studying on behalf of RWJFâ€™s State Health Reform Assistance Network initiativethe others are Baltimore; Birmingham, Ala.; Denver; Long Island, N.Y.; Minneapolis-St. Paul; Portland, Ore.; and Richmond, Va.
The Center for Studying Health System Change is a nonpartisan policy research
organization committed to providing objective and timely research on the nation's
changing health system to help inform policy makers and contribute to better
health care policy. HSC, based in Washington, D.C., is affiliated with Mathematica Policy Research.