Wednesday, March 30, 2011
Insurance Exchange Can Give Us Healthier Future
By Don Chalmers And Terri Cole
Greater Albuquerque Chamber of Commerce
During the recent Legislative session, the Greater Albuquerque Chamber of Commerce urged the Legislature to create a Health Insurance Exchange: a consumer-friendly marketplace where individuals and small employers can purchase insurance more easily and cheaply than they can today.
The Legislature passed SB 38/370 to create the exchange, and we hope the governor will sign this bill.
More than 450,000 New Mexicans have no health insurance. Individuals who work for small businesses are the largest single group in the state who do not have this protection. In fact, almost two-thirds of New Mexico's small businesses cannot afford health insurance for their employees.
The chamber endorsed a health insurance exchange for New Mexico to help our small-business owners across the state provide this important benefit.
The Health Insurance Exchange brings individuals and small businesses together into a larger "risk pool" to get the lower insurance rates offered to larger employers. This would be a big advantage to small businesses in New Mexico: They could compete for talent with larger employers who do offer health insurance benefits, and their workforce would be healthier.
The Health Insurance Exchange will promote competition among insurance companies and will rate all the health plans to help consumers make informed decisions about which plan is best for them. All the details of the plans offered will be available online to make it easy to compare the plans.
Under the federal Patient Protection and Affordable Care Act, passed a year ago, each state was given the option to set up its own exchange, with features responsive to its needs. However, if we fail to do this by 2012, the federal government will establish an exchange for us, and it may not have the characteristics that we want.
The Legislature's passage of the exchange bill followed eight months of meetings by a joint legislative and executive working group, with a diverse group of stakeholders from the business and insurance sector, as well as ordinary citizens, who ultimately recommended a uniquely New Mexican health insurance exchange. The exchange will be a quasi-public nonprofit corporation, with the governor, the Legislature and the superintendent of insurance making appointments to the board of directors. The exchange is required to be fully transparent and make public all of its financial matters.
Tax credits are already available to qualified small businesses to help pay for the cost of health insurance. Nationwide, this is expected to save small businesses billions of dollars. These tax credits will be available on the exchange, as will subsidies for health insurance premiums for lower-income families. The exchange will closely coordinate with Medicaid to provide a "one-stop shop" to obtain health insurance.
Estimates are that more than 300,000 currently uninsured New Mexicans will become insured, either through the planned federal expansion of Medicaid or through affordable coverage from the exchange. This is expected to reduce insurance premiums for those of us who have insurance.
There will be no cost to the state, including no new taxes, for developing the exchange; the federal government will pay the full set-up costs until 2015. The exchange thereafter will run on fees charged to the participating insurance companies.
Moving ahead with the exchange now, rather than waiting, is important. We don't want the federal government to set up and run an exchange for us.
Moreover, if we act now we will obtain the maximum amount of federal financial assistance to operate the exchange. Finally, starting now will allow us to shake out the kinks we are bound to discover as we go forward.
The bottom line is that the exchange is good for business. It will help our small businesses and their employees obtain access to health care insurance at a reasonable cost. SB 38/370 will bring millions of federal dollars into our state and require transparency regarding health insurance plans and financial matters. The Greater Albuquerque Chamber of Commerce urges the governor to sign Senate Bill 38/370, the Health Insurance Exchange.
Don Chalmers is vice chairman of Healthcare and Terri Cole is president and CEO of the Greater Albuquerque Chamber of Commerce.
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