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Committee hears plan to fix state employee health-insurance shortfall; bill would require actuarially sound premiums
Summary
Legislative staff and the Health Care Authority described years of program shortfalls in the state employee health plan and a multipronged bill (Senate Bill 376) intended to require actuarially sound premiums, adjust employer/employee contribution splits, and pursue hospital price tools to contain costs.
Eric Chenier, presenting fiscal analysis, told the committee that "New Mexico has continued to experience total health benefit program costs exceeding employee premium revenues since about, 2021." Chenier said a multi-year pattern of suspended premium increases and medical-cost trends left an $85 million shortfall projected for FY25.
The Health Care Authority secretary (title provided in testimony) told senators Senate Bill 376 would require actuarially sound budget requests, replace outdated salary-bracket contribution formulas with an $80/20 employer-employee split, and create mechanisms to lower premiums for eligible low-income employees using the Health Care Affordability Fund. The secretary said the bill also contains proposals to cap hospital pricing and prevent balance billing to patients.
Officials said the bill would reduce employee out-of-pocket costs on average, save the state an estimated $155 million over five years, and stabilize local public-body costs that mirror the state plan. Staff suggested a nonrecurring use of the Health Care Affordability Fund to soften the general-fund impact in the coming year, with fully actuarial recurring funding phased thereafter.
Committee members asked whether actuarially required premiums would simply be raised in large steps to cover shocks. The secretary said the bill includes cost-containment measures (notably hospital pricing) and expected savings from those initiatives to limit premium spikes. Senators also discussed the timing of the bill and the committee's ability to consider the spending trade-offs before final votes.
Ending: No committee vote on the bill was recorded in this hearing; the secretary said SB376 was scheduled for committee consideration the next day.
