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Health care authority urges Senate to pass SB376 to fix state employee insurance shortfall
Summary
Health Care Authority staff and the agency secretary described a statutory fix — Senate Bill 376 — intended to set actuarially sound premiums, lower employee costs for lower‑income workers and constrain hospital pricing, saying the measure would eliminate a major program deficit and save general fund dollars over five years.
Legislative staff and the Health Care Authority told the Senate Finance Committee that New Mexico's state employee health benefits program has run persistent deficits and presented Senate Bill 376 as a multicomponent fix.
Health Care Authority analyst Eric Chenier briefed the committee on program trends and the fund's structural gap, saying deficit appropriations have been required repeatedly because premium revenues did not rise while medical costs reset at higher levels in 2022 and again more recently. Chenier said projected FY25 shortfalls were near $85 million at current trends.
Madam secretary (Health Care Authority) framed SB376 as a multifaceted response. "Senate Bill 376 . . . saves taxpayers money and paves the way for other state public health insurance partners to adopt similar reforms next year," she told the panel. The bill would require actuarially sound premiums, replace outdated salary brackets with a uniform 80/20 employer/employee split, create a health care affordability fund targeted at employees below 250% of the federal poverty level, add protections tied to fair hospital pricing and create a premium‑reduction program for some National Guard members who qualify for TRICARE Select Reserve.
Committee members questioned volatility and whether an actuarial requirement would force premium spikes if unexpected costs emerged. The secretary said SB376 is designed to pair actuarial discipline with cost‑containment tools, including the fair hospital pricing initiative, and estimated the bill factors in roughly $40 million in cost containment through hospital pricing reforms.
Legislators also discussed the short‑term plan to use a nonrecurring health care affordability fund allocation to soften the general fund impact this year, with the expectation recurring dollars or structural fixes will be needed in subsequent budgets. Chenier explained that the HCAF use would be nonrecurring to reduce the FY25 general fund pressure while statutory reforms take effect.
No committee vote on SB376 occurred during the briefing; legislators were informed the bill is scheduled for committee and that staff will provide actuarial and fiscal analyses.
