Individuals paying for health insurance in New Mexico gear up for new wave of rate increases

Self-employed New Mexicans relying on Blue Cross Blue Shield health care services are due to incur a ten percent increase on premiums paid less than a year after the insurance company hiked up rates by 21 percent.

From The Santa Fe New Mexican:

While the 21 percent increase last year affected more than 40,000 individual customers, this one potentially will affect 27,000 policyholders, Franchini said. Policyholders may have switched plans, moved to Medicare or simply dropped health insurance, he said.

Blue Cross Blue Shield of New Mexico did not answer questions about how many people would be affected by the most recent rate-increase proposal, whether customers had been alerted about the erroneous letters or why the increase was needed.

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According to the state Insurance Division, health care costs in New Mexico are going up an average of 12 percent per year. Those costs include doctor visits, nursing care, hospital stays, laboratory tests and diagnostic tests such as X-rays.

Weiss Ratings, a company that rates the financial health of insurance companies, released a report earlier this year saying that nationally, medical expenses declined by 1.3 percent to 3 percent — the first decline in a decade.

A 2009 report by The Henry J. Kaiser Foundation, which analyzes health care policies and costs, says new medical technology, prescription drug use and the rise in chronic diseases have contributed the most to rising health care costs. Another Kaiser report found the increase in health-insurance premiums, out-of-pocket health spending and taxes for health care far outpaced both inflation and people’s average gross income increases.

In 2009, the market penetration of Blue Cross Blue Shield was 35 percent, according to information compiled (PDF) by the Center for American Progress. Presbyterian Health, a non-profit health group, comes in second, covering 30 percent of the state.

The latter came under even more scrutiny two years ago after raising rates by 24 percent and providing even less justification than Blue Cross Blue Shield (BCBS), submitting just over 30 pages in information to the state’s Insurance Division of the New Mexico Public Regulation Commission, compared to BCBS’s 100 pages.

Between 2004 and 2010, Presbyterian Health rate hikes totaled 88 percent, while BCBS pushed its premiums up by 150 percent.

Through the The Patient Protection and Affordable Care Act (ACA), states are obligated to monitor trends in the rise of service costs to patients towards including or excluding inequitable policies by 2014, when health benefit exchanges are scheduled to go live. The U.S. Department of Health and Human Services has outlined to state authorities what an acceptable rate hike justification document should look like — the department has signed off on New Mexico’s rate review program.

The federal government encourages Individuals in search of affordable health care options to view this website for policy recommendations. The site will also monitor pending rate increases of ten percent or more.

Last week, Sen. Jeff Bingaman (D-N.M.) wrote in a public statement the state has the second highest rate of uninsured residents in the country — 24.7 percent.