Which insurance plan is right for you?

New Mexico Business Journal, April, 1996 by Steffanie Gibbons

Health Insurance in New Mexico comes in a wider variety of shapes and sizes today, as public and private groups attempt to bridge the gap in health care coverage. The state's small businesses and the self-employed traditionally have lacked easy access to affordable health care coverage. That trend is changing.

If you're confused about the variety of plans now available, read on. Here's a status report:

A Program for Small Business

A health care option gaining a strong following from the state's small business community is the New Mexico Health Insurance Alliance, a nonprofit public corporation created by the state legislature in 1994. The health insurance made available through the Alliance is guaranteed, affordable and voluntary. Coverage cannot be denied because of an applicant's health status or work performed. In addition, the health insurance cannot be revoked if employees lose their jobs or change jobs.

"In today's marketplace, health care insurance coverage is often denied to certain occupational groups or to individuals with known health hazards. These people will not be denied coverage through the alliance if they meet our criteria for being small business owners and their employees," said Anne Sperling, executive director of the Alliance.

Coverage from participating Alliance companies may be purchased by businesses in New Mexico that employ up to 50 people, and the employees of those businesses who work at least 20 hours a week. Eligible employers are not required to pay any portion of the cost for their employees' coverage, and the employer can switch to another carrier within the Alliance on the plan anniversary date.

Response has been strong. In its first year of operation, the Alliance provided more than 4,000 individuals with health care coverage. Approximately half of the groups and one-third of the individuals insured by the Alliance did not have prior coverage. With an average enrollment of more than 100 per month, the Alliance's projected enrollment for 1996 is more than 5,000.

A sole proprietor can receive coverage if he or she enrolls at least one dependent in the health care plan. "A self-employed person can qualify for coverage only if that individual enrolls with a dependent," said Sperling. "This participation qualifies as a group of two and adheres to the Alliance's definition of a small employer."

Any insurance company providing coverage to public employees or retirees in New Mexico is required to participate in the Alliance. These insurance carriers include six HMOs: HMO New Mexico, FHP, Presbyterian Health Plan, QualMed, Lovelace and Cimarron HMO. Companies offering indemnity plans are Allianz, American Medical Security, American National, Anthem, Cigna, Guardian, NM Blue Cross/Blue Shield, Principal Mutual, Provident, Prudential, Qual Med Health and Life and United of Omaha.

New Mexico's Alliance is unique in that it is the only state to provide a reinsurance pool for the companies offering health plans. "If carriers spend more on claims than they receive in premiums, they are reimbursed for the loss," said Sperling. "No one carrier will be at a greater loss because of this program."

Health Insurance as a Membership Benefit

Several carriers, including Blue Cross/Blue Shield of New Mexico, Lovelace, QualMed, Presbyterian and FHP, now offer small business and individual plans. In addition, certain carriers market a junior version of their individual plan for children from birth to age 18.

With a little innovation, small business owners who are unable to obtain an independent health care plan can gain access to health insurance through membership in a community association, professional group, or even a credit union. Business and professional groups, such as the local chamber of commerce, the Better Business Bureau and the Association for Commerce and Industry, offer members access to the organization's health insurance plan. As members, small business owners and their employees can apply for health care coverage as part of a larger group.

Each association offers different health plans, premium costs, benefit and co-pays, so each group should be studied. If you want to purchase coverage from a particular company, be sure to pick a group which offers that carrier's plan. And if you want to see a certain doctor, call the physician's office to determine whether the plan you've selected is accepted there.

Managed Care Flourishes Here

Managed care has found an extremely successful marketplace in New Mexico. Albuquerque boasts the fifth-highest penetration of HMOs (health maintenance organizations) in the country, and the managed care concept is gradually moving into the state's smaller communities.

Managed care plans emphasize increased involvement by primary care providers who manage patients' care and determine what health care services are necessary and when. The managed care concept promotes wellness through programs designed to support health and fitness and prevent disease.

Health care insurance products widely available today include a variety of managed care plans, such as HMOs and traditional indemnity plans, which pay for certain costs after a deductible has been paid. Some groups offer a plan known as a PPO (preferred provider organization), which may provide incentives for accessing preferred providers and/or reduce benefits for accessing non-preferred providers.