By Barry Massey/Associated Press
Nearly 26,000 New Mexicans are having health plans terminated at the end of the year because the insurance policies fail to provide expanded benefits and other coverage mandated by a federal health care law, according to insurance industry officials.
State Insurance Superintendent John Franchini estimates most of those individual policyholders will pay an average of 35 percent more for new coverage, but will have plans with more health care benefits.
He said individuals can buy new coverage directly from a private insurer if they don't want to shop through a federally operated health insurance exchange, which has been hobbled by computer glitches.
"We all have to adapt now because the exchanges aren't working, but it doesn't mean we can't get what we need," said Franchini.
Presbyterian Health Plan has sent letters to its 23,000 individual policyholders notifying them that their policies will not be renewed and outlining options for buying new health plans, said Todd Sandman, senior vice president of strategy and customer engagement.
Lovelace Health Plan has notified 2,900 individuals their plans are being discontinued, said Marlene Baca, the company's chief programs officer.
Under the Affordable Health Care Act, policies starting next year must provide certain core benefits, such as coverage for maternity care as well as mental health and substance abuse. Franchini said many individuals don't buy those benefits in their current policies, which allows people to hold down monthly premiums. "Under the Affordable Care Act, you can't use those old thin benefits anymore," he said.
Blue Cross and Blue Shield of New Mexico offered its 28,000 individual insurance policyholders a way to keep their current health plans for another year by renewing the policies now. Insurance regulators agreed that the contract period could run from December through the end of November 2014.
"They have a little more time to shop around and see what's going to work for them," said Janice Torrez, vice president of external affairs and chief of staff for Blue Cross and Blue Shield.
However, those renewed policies will cost more. Rates will go up about 9 percent, according to Torrez.
Presbyterian policyholders who don't make a decision on new coverage will automatically be enrolled in a "silver" health plan the insurer offers through the exchange used by New Mexico, said Sandman.
A 40-year-old man will pay about $248 a month for that mid-range insurance plan, which is considered a benchmark by the federal government for plans offered through exchanges. That 40-year-old man pays about $140 a month for a health plan that will end this year, according to Sandman. But he emphasized it's an "apples to oranges" price comparison because the silver plan offers more coverage and a wider range of benefits.
Under the federal law, consumers can select from insurance plans with a range of coverage called bronze, silver, gold and platinum. The least costly or bronze plans will require people to pay more out-of-pocket expenses. Bronze plans are to cover about 60 percent of health care costs on average, with 70 percent coverage for silver plans.
Franchini said New Mexicans buying new health coverage now have the flexibility of cancelling their policies on a month-by-month basis and switching if they find a better plan later.
"There are more coverages and there are more choices available through the insurers right now in New Mexican for 2014 than they have ever had in our history," said Franchini. "Now that doesn't mean they're going to be the cheapest, but their benefits are going to be really good."