N.M. residents may soon be able to sign up for health coverage while they file their taxes

Figuring out your health insurance could become as easy as checking a box on your tax return if a bill the Legislature passed is signed by the governor. 

Set to take effect next year, New Mexico would be the fifth state in the nation to streamline the process this way.

House Bill 95 — dubbed the Easy Enrollment Act — received unanimous support from both the House (66 to 0) and the Senate (38 to 0), and now awaits Gov. Michelle Lujan Grisham’s signature. If she OKs the plan, enrollment is expected to be available on the tax returns people file in 2023.

N.M. residents would be able to start the enrollment process by checking a box on their state income tax return, according to Gabriella Rivera, spokesperson for Health Action New Mexico, a nonprofit healthcare advocacy organization that testified in favor of this bill.

How it would work

When uninsured taxpayers check the box they will give permission to NM Tax and Revenue Department to share their tax data with the New Mexico Human Services Department, Rivera said. 

HSD will then check their eligibility for free health insurance, like Medicaid or the Children’s Health Insurance Program.Those who qualify for Medicaid will be contacted and asked if they want to enroll.  

And if the taxpayer is not eligible for free health insurance, Rivera said HSD will transfer their data to BeWellNM, the New Mexico insurance exchange, and the department will assess if the taxpayer is eligible for low-cost insurance through advanced premium tax credits. 

And, as a final option, if the taxpayer doesn’t qualify for credits or is otherwise deemed uninsurable, then their data will be sent to the New Mexico Medical Insurance Pool, and the person will have the option of getting health benefit portability coverage, Rivera explained. 

The state’s Medicaid Director Nicole Comeaux said that the pool plays an important role in ensuring more people are eligible for insurance. 

“One of the coolest things about New Mexico’s kind of continuum of coverage here is that all of these entities … work incredibly closely together so that we are able to have that continual link for folks,” she said. “If you can’t fit in one bucket, we can kind of help push you to the next.”

Lujan Grisham has been criticized for previously profiting from Delta Consulting Group, LLC — the organization she co-founded that is contracted to run the pool. 

Projections vary about how many uninsured people will use the tax-form checkbox to find health care coverage, but Comeaux said that with the federal COVID-19 public health emergency declaration likely to end soon, a number of people will soon be dropped from Medicaid.

There are between 960,000 and 970,000 people enrolled in Medicaid in New Mexico, she said. But once the government lifts the emergency status, some won’t be eligible anymore.

“Depending on the timing of that, it will have a huge impact on the number of those that may then come through this opportunity next year,” Comeaux said. 

Health Action New Mexico is estimating that — even with the initial flood that might come after the end of the emergency declaration — no more than 5,000 uninsured people will use their tax forms to sign up for insurance the first year, and that it should stabilize to around a few thousand each year after that, Rivera said. 

“We’re hoping in the first few years — when people get more comfortable seeing that question — that they might check the box and we’ll get a few thousand people each year,” Rivera said. 

Colin Baillio is the project manager at the state’s Office of Superintendent of Insurance. He said the legislation also allows for a second box, so not only could someone opt to have their info shared with HSD, they could automatically consent to Medicaid enrollment if they’re deemed eligible. 

“What we need to do is make sure that the information that’s being collected through the tax form is enough to verify eligibility,” Baillio said.“If everything that would be needed to complete an application is there, then the law allows for that.”

Regardless, the taxpayer would need to be contacted to coordinate which managed care organization and plan they would like to use, Comeaux said. 

State Revenue and Costs

According to the fiscal impact report drafted by the legislative analysts, 60% to 70% of people who are uninsured and qualify for Medicaid file New Mexico income tax returns.

“We’re hoping people that just don’t have any idea they might qualify for Medicaid — they think their incomes are too high, just haven’t even bothered to check or just don’t have any idea where to start — will sign up when they file their taxes,” Rivera said. 

Because the federal government subsidizes Medicaid, making sure everyone who is eligible is signed up is a source of potential revenue for the state, she pointed out. 

“For every dollar we put in, we’re drawing down $4 from the federal government,” Rivera said, “and we shouldn’t be leaving any of those dollars on that table, if possible.” In addition to federal funding, the state is positioned to make back some of the costs of running the program through the increased insurance premium tax revenue, said New Mexico Tax and Revenue Director Charlie Moore via email. 

Insurance policies aren’t subject to gross receipts taxes, he said, “but they are subject to the insurance premium tax. Unfortunately, we don’t have an estimate for the impact there. That will depend on how successful the program is.”

Moore said setting up the Tax and Rev piece of the program won’t be very expensive or complicated.

“The technology lift on our end is not large,” Moore said, putting the cost at about $15,000

Stopgap measure, but not enough

This bill won’t resolve the mountain of problems associated with attempting to access health care in New Mexico, but advocates say it’s a Band-Aid until greater reforms can be adopted. 

“We know the health insurance system has so many fundamental problems,” Rivera said. “So what this does is it’s making it easier to navigate a very difficult system. It’s not fixing a lot of the root problems we’re encountering, but it is going to help a lot of people, in the short term, get health insurance.”

Family physician Dr. H. Tyler Taylor, who previously served on the board of the New Mexico campaign for the Health Security Plan, agreed that this new process won’t address more systemic issues he’s seen in his experience practicing medicine and working with hundreds of patients..

”We need a system that will cover everyone,” he said. “We need one that has lower costs, one that is designed to provide better quality and better access for people, one that is a lot less stressful and less confusing for patients, and one that’s a lot less stressful and hard on the morale of health care workers. And, as long as we have a very fragmented system we’re gonna struggle in all of those areas.”

Legislation not acted on by the governor by March 9, 2022 will be automatically vetoed.