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Universal Insurance Could Lift New Mexico

By Winthrop Quigley
Journal Staff Writer
Albuquerque Journal
Friday, June 22, 2007

SANTA FE -- Any of three universal health coverage proposals would improve the state's economy, raise taxes and cause a modest improvement in health, policy analysts said Thursday.

Testifying before the Health Coverage for New Mexicans Committee, a team of consultants said a state-funded single-payer system would be the least expensive way to cover all of the state's 400,000 uninsured residents. However, a system of state-subsidized vouchers allowing people to buy insurance plans screened by the government would do the most to improve the economy.

The single-payer and voucher systems would require new payroll taxes of between 4 percent and 8 percent, but the taxes would be less than employers pay now because, as publicly funded programs began, their private health insurance premiums would decline or disappear entirely, said University of New Mexico Bureau of Business and Economic Research director Lee A. Reynis.

Deborah Chollet, an economist with Mathematica Policy Research Inc., said total spending on health care is about $6.24 billion in New Mexico today. All proposals offered would increase medical spending as more people received coverage.

Using computer simulations and assumptions provided by supporters of different approaches, Chollet estimated:

Spending would decline to as little as $6.03 billion under a single-payer plan because nonmedical costs would be reduced even while medical spending increased.

Spending would increase to as much as $6.7 billion under a voucher system because administrative overhead would increase along with medical spending.

Expanding eligibility for existing public programs would cost $6.43 billion.

Reynis estimated that any of the three approaches would add as few as 2,500 jobs and as many as 11,400 jobs and increase residents' total annual income by anywhere between $84 million and $408 million, depending on the approach the state adopted.

More demand for health care would allow the health care industry to increase staffing, generating more wages and economic activity, she said.

Any universal coverage plan, including expansion of existing programs, will depend on increased federal funding, Reynis said.

Bill Wiese of the UNM Institute for Public Health cautioned the panel not to expect too much from finance changes. "The bottom line is universal coverage will probably help (improve people's health) but the improvement will be modest," Wiese said.

The health care system will remain stretched even if funding improves, and interventions that make a big difference in people's health, like improved lifestyles, "are beyond the scope of universal coverage," Wiese said.

State tax analysts estimated a single-payer or voucher system would raise taxes for some households.

The committee, appointed by the governor and legislative leaders, will discuss the findings today at the State Capitol.