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Contact:  Mary Feldblum, HSNMC Executive Director, 505-897-1803

Preliminary Results of Cost Study of Four Universal Health Care Models: Health Security Act Most Cost Effective

Every resident under 65 could have health insurance at a lower cost than what is spent under the current system

Albuquerque, NM.  "Every resident under 65 could be provided with health insurance through the Health Security Act for less money than is spent by the current system," stated Max Bartlett, vice chair of the Health Security for New Mexicans Campaign, based on preliminary results of the financial study being conducted for the Governor's Health Coverage for New Mexicans Committee.   "The Health Security Act would provide the excellent level of services currently offered to state employees," Bartlett added. 
           
“The study, which compared the existing health insurance system to four very different reform models, shows that by 2011, the estimated savings for New Mexico under the Health Security Act model range from $500 million to $1 billion more than under the other reform models,” Bartlett said.

HSNMC chair Eleanor Chavez believes that it is now time to move forward and pass the Health Security Act.  “It is the only one of the four reform models Mathematica studied that was developed with input by thousands of New Mexicans from all over the state, and it is the only one that has gained public support.”

The Health Security Act is endorsed by 128 organizations representing thousands of New Mexicans, and by 25 New Mexico municipalities and counties – including Albuquerque and Las Cruces, as well as Bernalillo and Doña Ana Counties.

“We are pleased that the preliminary results of the Mathematica study are similar to the findings of many other studies across the nation,” HSNMC Executive Director Mary Feldblum said. “Those studies demonstrate that universal health care reform models similar to the Health Security Act – models that place most state residents in one health risk pool – will bring about greater cost savings than models that continue to rely on a complex private insurance system that has failed to deliver.

“While the preliminary cost results seem very positive, we do note that some of the Act’s key assumptions were not included.   It is also important to understand that the Health Security Act has built into it the opportunity for the legislative finance committee to seek a ‘second opinion.’ ”

The Health Security Act is based on the original idea of insurance, where the young, old, health and not-so-healthy are all in one large pool, sharing the risks and costs equitably.  It sets up an insurance cooperative that would cover an estimated 1.6 million New Mexicans; guarantees comprehensive health services; guarantees choice of doctor (even across state lines); and changes the role of insurance companies to provide supplementary coverage as they do under Medicare.  The Health Security Plan is paid for by combining existing public dollars spent on health care (Medicaid, Medicare) with premiums based on income and employer contributions (with caps).

Brief descriptions of the four models:

Model 1.  Health Security Act: Sets up a cooperative to provide health insurance to almost all New Mexicans.

Model 2.  Health Choices, Version 1: A health insurance marketing alliance that provides vouchers to almost all New Mexicans, paid for with taxpayer dollars.  All employers participate.

Model 3.  Health Choices, Version 2: A version of the health insurance marketing alliance that allows employers who provide insurance to opt out.

Model 4.  Health Coverage Plan: Expansion of the current system assuming greater enrollment in Medicaid and other public programs. 

Below are Mathematica’s preliminary numbers. Please note that these numbers exclude the over-65 (Medicare) population and the institutional population—populations that the Health Security Act includes.  The numbers also assume that under each model all New Mexicans are covered.

Projected Total Expenditures in 2007 and 2011
(excluding over-65 population and institutional population)

 
What these numbers mean:

•     In 2007, only the Health Security Act costs less than the current system.  The
others cost more than the current system.

•     In 2011, the Health Security Act saves $549 million (health costs are reduced by $549 million).  The Health Choices models cost $476 million and $496 million more than the current system.  This amounts to a $1 billion difference if you compare the cost of the Health Security System to the cost of the Health Choices models.

•     In 2011, the Health Coverage model costs $10 million less than the current system.  There is almost a $500 million difference in savings between the Health Coverage model and the Health Security Act.