Insurance office reports 35.7% average individual market premium increase, parity audit findings and early drug‑price reporting limits

The Office of the Superintendent of Insurance (OSI) briefed the Legislative Health & Human Services committee on 2026 rate reviews, mental‑health parity audits, prior‑authorization enforcement and the first year of the prescription drug transparency program.

OSI's director of the life and health division (name not provided on the record) said actuaries observed a 35.7% average premium increase in the individual market and a 16.8% average increase in the small‑group market; the largest individual‑market increase reported to the committee was 81%. The office attributed increases to higher 2024 claim costs, a sicker commercial population as people transitioned off Medicaid during redeterminations, rising medical and pharmaceutical costs, and market uncertainty.

On mental health parity, OSI said it implemented a new audit process and purchased analytical software to handle claims and utilization data. The office identified 537 compliance issues and issued 131 material objections; several carriers voluntarily reprocessed more than 100 claims that resulted in about $6,000 in provider reimbursements. "We encountered early challenges with data formatting and system limitations," the OSI director said, and corrective action plans are under legal review for issuance in 2025.

OSI also reviewed prior‑authorization performance and said most insurers met timelines for standard requests but that urgent requests showed noncompliance in some carriers. The office reported issuing eight enforcement letters to carriers that failed to meet statutory timeframes, totaling $1,100,000 in fines; carriers have due process and may request hearings.

Dr. Alejandro Amparan, who leads the drug and PBM compliance unit, discussed the prescription drug transparency program launched in 2025. OSI published submission guidance and an electronic reporting tool; 92 unique manufacturers submitted roughly 1,200 drug submissions for the 2025 reporting period, and the legislative findings report due in January is on track. Amparan warned, however, that only about 430 manufacturers are licensed in New Mexico (Board of Pharmacy data), while thousands are registered with the FDA, and PBM reports are aggregated by statute. "As such, it's nearly impossible to glean any kind of meaningful information when attempting to compare and contrast the data the PBMs reported to the data that all of the other entities reported," Amparan said.

Committee members asked about enforcement outcomes for prior‑authorization letters, whether the public knows they can file complaints about prior authorizations, coverage of durable medical equipment, and whether hospice medical‑marijuana coverage would require legislative action. OSI said it had issued outreach about prior‑authorization protections after passage of Senate Bill 39 and that legislation would be necessary to expand OSI authority over manufacturers.

OSI noted limitations in the dataset and signaled plans to purchase third‑party datasets for validation and to increase enforcement and outreach in future cycles. The office recommended follow‑up steps including additional outreach to licensed reporting entities and exploring legislative authority to register or license manufacturers for enforcement purposes.