Health insurance reform may benefit New Mexico economically

By Matthew Reichbach

The Medicaid expansion through the health care reform law will more than pay for itself in New Mexico according to analysts from New Mexico Voices for Children. Bill Jordan, Policy Director for New Mexico Voices for Children, and Kelly O’Donnell, an economist, gave a presentation to the Revenue Stabilization and Tax Policy interim committee Friday in Albuquerque explaining how New Mexico’s tax structure lends itself to taking advantage of the Patient Protection and Affordable Care Act (PPACA).

The two were questioned by the committee on how the tax structure would help and whether or not the health care act would actually help lower income residents receive health insurance.

There are two main revenue streams from the federal government that New Mexico will benefit from according to Jordan. One is the money coming in directly from Medicaid. The other money is the money that would come in the form of tax breaks for health insurance for low-income individuals.

“Those are the two main streams of funds and ways that people will get insurance,” Jordan told Clearly New Mexico following the hearing. “Both of those, Medicaid and the private insurance that is bought on the health care exchange, are taxed already and will be taxed with a 4 percent health insurance premium tax. And that plus our gross receipts tax and other minor taxes, like personal income tax, will generate enough tax revenue that we’ll have more than enough money to pay for our share of the Medicaid expansion that’s coming.”

HSD, advocacy groups at odds over Medicaid’s future

The hearing comes after the state’s Human Services Department has said a redesign of Medicaid is necessary because it is unsustainable as it is currently run. Many more people will be eligible for Medicaid in 2014 because of the PPACA. The federal government will cover the vast majority of the costs for the first few years, though this phases out and New Mexico will be on the hook for ten percent of the costs of the new Medicaid enrollees when it is completely phased out.

This summer, HSD Cabinet Secretary Sedonie Squire rejected a call for a public Medicaid Redesign Task Force. The call came from advocacy organizations, including New Mexico Voices for Children, which were not happy about the secrecy of the Medicaid redesign.

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