New Mexico recently created a public–private partnership that uses unspent CHIP funds to subsidize premiums for low-income uninsured adults. Through the New Mexico State Coverage Insurance (NMSCI) program, three commercial managed care organizations are offering a low-cost product that provides coverage for adults ages 19 to 64. The health plans are available to uninsured people with family income up to 200% of the federal poverty level who have not voluntarily dropped insurance within the last six months and to employers who have not voluntarily dropped insurance within the last 12 months.
Implementation of NMSCI began July 1, 2005. The program offers premium assistance, with the employer and employee each paying a share of the premium and state and federal funds paying the remainder. Employers pay $75 per employee member per month and the employee pays $0 to $35 per month, depending on income level. Individuals applying without their employer's participation pay the employer share of $75 per month as well as the employee share.[1] Medical services require copayments on a sliding scale based on family income.[2]
The program required a $4 million appropriation from the state legislature for state FY06, which will be matched by approximately $16 million in federal CHIP dollars. In addition, a few counties are planning to contribute a portion of their uncompensated care funds toward the premiums of qualifying residents. The state expects that about 10,000 state residents will obtain insurance through the plan during the first year, eventually covering 40,000 state residents over five years. The arrangement was approved as a five-year demonstration, through a Health Insurance Flexibility and Accountability Demonstration waiver from the Centers for Medicare and Medicaid Services in 2002.
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[1] An employer may include employee spouses in the group; also, the employer may choose to contribute toward the spouse's premium. To avoid adverse selection, there are group participation requirements: for groups of up to nine employees, at least 75% of those eligible must join; for groups with 10 to 50 employees, at least 50% of those eligible must participate.
[2] For example, an individual with a household net income of $29,000 per year and a family of four has premiums of $20 per month and copayments of $5 per doctor visit and $25 per admission for inpatient hospital service.
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