HOUSE BILL 376

56th legislature - STATE OF NEW MEXICO - first session, 2023

INTRODUCED BY

Reena Szczepanski and Elizabeth "Liz" Thomson

AN ACT

RELATING TO INSURANCE; AMENDING THE AUTHORITY OF THE BOARD OF DIRECTORS OF THE NEW MEXICO MEDICAL INSURANCE POOL; REVISING THE MANNER IN WHICH RATES ARE CALCULATED.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. Section 59A-54-7 NMSA 1978 (being Laws 1987, Chapter 154, Section 7, as amended) is amended to read:

     "59A-54-7. BOARD--POWERS AND DUTIES.--The board shall have the general powers and authority granted under the laws of this state to insurance companies licensed to transact health insurance business. In addition, the board shall have the specific authority to:

          A. enter into contracts as are necessary or proper to carry out the provisions and purposes of the Medical Insurance Pool Act, including the authority, with the approval of the superintendent, to enter into contracts with similar pools of other states for the joint performance of common administrative functions or with persons or other organizations for the performance of administrative functions. The pool shall comply with the Procurement Code except as otherwise provided in the Medical Insurance Pool Act;

          B. sue or be sued, including taking any legal action as necessary to avoid the payment of improper claims against the pool or the coverage provided by or through the pool;

          C. establish appropriate rates, rate schedules, rate adjustments, expense allowances, agent referral fees, claim reserve formulas and any other actuarial functions appropriate to the operation of the pool. Rates and rate schedules may be adjusted for appropriate risk factors such as age and area variation in claim costs and shall take into consideration appropriate risk factors in accordance with established actuarial underwriting practices;

          D. assess members of the pool in accordance with the provisions of the Medical Insurance Pool Act and make initial and interim assessments as may be reasonable and necessary for the organizational or interim operating expenses of the pool. Interim assessments shall be credited as offsets against any regular assessments due following the close of the calendar year. Interim assessments may include anticipated expenses of the next year that the board determines are reasonable and necessary for the operating expenses of the pool;

          E. issue policies of insurance in accordance with the requirements of the Medical Insurance Pool Act;

          F. issue a policy of insurance, in accordance with the requirements of the Medical Insurance Pool Act, for a small group that is formed voluntarily through an employer, association, cooperative, mutual alliance or other organization; provided, however, that an employer group may not have more than fifty persons;

          G. enter into contracts or otherwise participate in any health-insurance-related program or initiative of the state; 

          [G.] H. appoint appropriate legal, actuarial and other committees as necessary to provide technical assistance in the operation of the pool, policy and other contract design and any other function within the authority of the pool; and

          [H.] I. conduct periodic audits to assure the general accuracy of the financial data submitted to the pool. The board shall cause the pool to have an annual audit of its operations by an independent certified public accountant."

     SECTION 2. Section 59A-54-19 NMSA 1978 (being Laws 1987, Chapter 154, Section 19, as amended) is amended to read:

     "59A-54-19. RATES--[STANDARD RISK] AVERAGE MARKET

RATE.--

          A. The pool shall determine [a standard risk] an average market rate by actuarially calculating the individual rate that an insurer would charge for an individual policy with the pool benefits issued to a person [who was a standard risk] in the individual market. Separate schedules of [standard risk] average market rates based on age and other appropriate demographic characteristics may be used. [In determining the standard risk rate, the pool shall consider the benefits provided, the standard risk experience and the anticipated expenses for a standard risk for the coverage provided.] The rates charged for pool coverage shall be no more than one hundred fifty percent of the [standard risk] average market rate for each class of insureds.

          B. The board shall adopt a low-income premium schedule that provides coverage at lower rates for those persons with an income less than four hundred percent of the current federal poverty level guidelines applicable to New Mexico, published by the United States department of health and human services. [For individuals with household incomes of one hundred ninety-nine percent of the federal poverty level or lower, the premium reduction shall be seventy-five percent. For individuals with household incomes of two hundred percent to two hundred ninety-nine percent of the federal poverty level, the premium reduction shall be fifty percent. For individuals with household incomes of three hundred percent to three hundred ninety-nine percent of the federal poverty level, the premium reduction shall be twenty-five percent. The board shall determine income based on the preceding taxable year.] No person shall be eligible for a low-income premium reduction if that person's premium is paid by a third party who is not a family member. Low-income premium rates shall not be lower than the average subsidized rates available in the market at the same income level and for a substantially similar plan.

          C. All rates and rate schedules shall be submitted to the superintendent for approval."

     SECTION 3. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2023.

- 5 -