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Health exchange bill runs into trouble in NM House

Friday - 3/1/2013, 12:31pm  ET

SANTA FE, N.M. (AP) -- A measure to establish a state-operated health insurance exchange stumbled in the New Mexico House on Thursday after critics objected that the proposal would overly regulate medical coverage plans offered to consumers.

The bill initially failed in the House on a 39-30 vote -- with eight Democrats opposing it. However, the measure was immediately revived and set aside, which will give majority Democrats a possible chance for another vote at a later date if they can round up more support or after making changes to meet some of the concerns of critics, including Republican Gov. Susana Martinez.

There's also separate health exchange legislation in the Senate that could advance.

Rep. Mimi Stewart, an Albuquerque Democrat who sponsored the measure, said after the vote that work will continue on legislation.

"The Legislature has a responsibility to act. I am willing to work with anyone, including the governor, to ensure we pass a health care exchange that puts New Mexicans first. We can do this," Stewart said in a statement.

The exchange is envisioned as an online shopping center for people and small businesses to buy health coverage from private insurance companies.

Under federal law, the exchange must be ready for enrollment in October and be fully operating by next January. Nearly 200,000 New Mexicans may be able to buy health insurance through the exchange by 2020.

The governor already has taken steps to establish an exchange operated by the New Mexico Health Insurance Alliance, a nonprofit public corporation established in 1994. However, Democrats contend the Legislature must change state law for the organization to handle duties of the exchange mandated by a federal health care overhaul.

The Martinez administration initially maintained it could set up an exchange without legislation, but agreed to negotiate with lawmakers to avoid a possible court fight that could stall efforts to implement the exchange. Democratic Attorney General Gary King has said the law authorizing the alliance doesn't conform to federal requirements for the exchange.

During debate, Republicans echoed objections from the Martinez administration that the exchange's proposed governing board would have too much regulatory power to decide what health insurance plans are offered to consumers. Republicans and the governor want a "free market" exchange that automatically will offer all plans meeting basic qualifications.

"We should not commit to regulation of the exchange that is going to force our constituents to purchase Cadillacs at Cadillac prices," said Rep. Terry McMillan, a Las Cruces Republican and physician. "We have plenty of time to build our own exchange more slowly and this bill over commits us."

Stewart maintained the governing board would have flexibility in its operations.

"That board could have a wide open market. The board could look at health insurance plans offered and ensure that they were relatively low-cost," she said.

While lawmakers and the governor deal with the questions about legislation, the alliance has put on hold an important decision on selecting a contractor to set up the computer system needed for the exchange.

"We want to ensure that the work that was done will go forward," said Stewart. "If we don't pass this legislation by the second week of March, we will either have to do a partner with the federal government or we will have to do a federal exchange because the New Mexico Constitution requires us to pass this law, not just have the governor do it."

The Legislature adjourns on March 16. States had the option of running the exchange or letting the federal government do it.

Among the Democrats opposing the bill and then agreeing to revive it were Democratic leaders of a committee that handles the budget, which Stewart had voted against because of objections to its education proposals such as a governor-backed merit pay system.

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Follow Barry Massey on Twitter at https://twitter.com/bmasseyAP


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