New Mexico lawmakers OK insurance reforms
March 18, 2011
SANTA FE, NM – With strong bipartisan support, the New Mexico House approved a bill by a vote of 55-7 that strengthens the state’s ability to protect consumers from rising health insurance premiums. Consumers Union, the nonprofit publisher of Consumer Reports, is urging Governor Susana Martinez to sign SB 208 into law.
“It’s time to give New Mexico families and small business owners stronger protection against out-of-control insurance costs,” said Sondra Roberto, staff attorney for Consumers Union. “This bill creates a more open process for evaluating health insurance rate increases and enables the state to conduct a more rigorous review of potentially unjustified hikes. Governor Martinez should strengthen the state’s ability to protect consumers by signing this measure into law.”
The bill approved by the New Mexico lawmakers would enact a number of reforms, including:
• A stronger standard of review requiring that rates must be actuarially sound, reasonable, and not excessive, inadequate or unfairly discriminatory.
• New criteria for evaluating whether rates are reasonable, including the company’s overall financial picture in New Mexico, compliance with the state’s new loss ratio standards, changes to benefits or plan design, and potential changes in the number of enrollees if the rates are approved.
• Stronger transparency for consumers to help them understand and consider rate hikes, including public disclosure on the Insurance Division website of a plain language explanation of the reasons for a rate increase, how much of the premium has been spent on actual medical care for the prior three years, and company financial information, such as surplus and reserves.
• New avenues for consumers to participate in the rate review process, such as a 30-day public comment period on a proposed increase and a right to appeal a decision on rates.
• New protections for consumers insured in individual market “closed blocks” – policies that are no longer being sold. Consumers in these policies are especially hard hit with high increases unless rate review requires broader risk spreading, as this bill would.
Michael McCauley – 415-431-6747, ext 126