Democrats plan bill for state-run health exchange

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SANTA FE, N.M. (AP) — A potential clash looms between the Democratic-controlled Legislature and Republican Gov. Susana Martinez over the administration's plan to implement a state-run health insurance exchange.

At issue is whether state law must be changed for the exchange, which is envisioned as an online shopping center for the uninsured to buy health coverage with benefits tailored to New Mexico.

Under federal law, the exchange must be ready to enroll people starting in October and be fully operating by next January.

The administration contends no legislation is needed to create the exchange. It's moving to have the exchange operated by the New Mexico Health Insurance Alliance, a nonprofit public corporation established in 1994 to provide access to insurance for small businesses and some individuals.

Democratic lawmakers plan legislation for implementing an exchange. The proposal will revamp the alliance's governing board to add more consumer representation and lessen the influence of the insurance industry.

"We have serious reservations not just about the legal basis of an executive moving without legislative involvement but also about the substantive content of what's in her exchange," Sen. Gerald Ortiz y Pino of Albuquerque, chairman of the Senate Public Affairs Committee, said Monday.

There's a possibility the dispute will end up in court, and the governor's chief of staff, Keith Gardner, said that could cause the state to miss the deadline for implementing the exchange. The federal government could be forced to step in and run the exchange if the state's plan is tied up in a legal fight, he said.

"By sending it to court, you're basically defaulting to the feds," said Gardner, a former legislator.

Ortiz y Pino and Rep. Mimi Stewart, an Albuquerque Democrat, are sponsoring a measure that will give the Legislature the ability to appoint some of the members of the alliance's governing board along with the governor.

Attorney General Gary King issued a legal opinion to lawmakers last month saying the state law governing the alliance "does not contain the necessary legal authority to establish a New Mexico exchange that comports with federal law.

The alliance's board, mostly appointed by the governor, is made up of insurance company officials, small employers and workers, but King's office said state law doesn't prohibit the insurance industry from having majority control of the board — a prohibition required under federal law. There also are conflicts between state and federal laws over which small employers could be eligible to obtain health insurance coverage and whether insurance companies could deny coverage because of a worker's preexisting health condition.

Martinez spokesman Greg Blair said the governor will review any exchange legislation proposed this session.

"As the governor has said, her job is to create a health insurance exchange that is tailor-made for New Mexico, rather than the one-size-fits-all approach from Washington, D.C.," Blair said. "She has been working on creating such an exchange for more than a year and believes it is best done through the Health Insurance Alliance."

Ortiz y Pino said lawmakers need to act as soon as possible this session because the alliance is preparing to select contractors to manage implementation of the exchange and to create a computer system for it to operate. He held out hope of reaching a compromise with the administration.

"We think there are ways of finding a middle ground where consumer interests can be protected while using the expertise of the insurance industry, but not simply saying, 'OK, insurance industry, you run this for us,'" Ortiz y Pino said.

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Follow Barry Massey on Twitter at https://twitter.com/bmasseyAP

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