New Mexico health insurance rates among the nation’s steepest hikes next year

New Mexicans will face some of the highest Affordable Care Act rate increases in the country next year, when the cost of some plans will spike by as much as 52.2%, according to the state Office of the Superintendent of Insurance.

The average price increase for individual plans sold through BeWell, New Mexico's health insurance marketplace, will be 35.7%, the OSI said — the fourth-highest average ACA rate increase of any state in the nation, according to a Journal analysis of marketplace data compiled by health policy nonprofit Kaiser Family Foundation.

The agency said in a news release the price hikes were caused by increased medical and prescription drug costs, high demand for health care services, and the expiration of Biden-era enhanced ACA tax credits that Congress chose not to renew.

"This is very unfortunate, and it's going to impact every New Mexican," said the director of OSI's life and health insurance division, Viara Ianakieva. "This is impacting everyone, all Americans across the country."

Ianakieva said while multiple factors could have contributed to the rate surges — rising costs, post-pandemic instability, cybersecurity attacks on insurers, Medicaid redeterminations — the major driver in New Mexico was that insurance companies' actual expenses last year ended up being much higher than initially predicted.

"Uncertainty impacts the market, and this year we have had a lot of uncertainty," she said.

United Healthcare of New Mexico is raising its prices the most of any of the state's ACA insurers — its rates will go up 52.2%, affecting 12,325 people, the company said in a report to the state. United's New Mexico rate hikes are in the top five highest increases of any ACA marketplace plan nationwide, according to KFF data.

Ianakieva attributes United's major rate hikes to its relatively new status on the state's health care marketplace, where New Mexicans can buy insurance via the ACA if they don't qualify for Medicare or Medicaid and don't have coverage through their jobs.

"This was the first year when they had actual experience which they could look back and make assumptions based on," she said. "This is when they actually saw that the expenses were a lot higher than assumed, and they had to adjust their rates accordingly."

BlueCross BlueShield of New Mexico will raise its rates by 38.6%, Presbyterian Health Plan by 27.1%, and Molina Healthcare of New Mexico by 15.3%, according to OSI reports.

"The team has worked really, really, really hard to ensure that rates are as low as possible without compromising the solvency of the insurance companies," Ianakieva said.

OSI officials said 75,000 New Mexicans buy health insurance through the BeWell marketplace, and 88% of them qualify for federal and state premium assistance. More than half of New Mexico's ACA enrollees pay less than $10 a month for health coverage with help from subsidies from the federal and state government, the agency said.

The American Rescue Plan Act of 2021, authorized under former President Joe Biden, made ACA tax credits available for more households, cheapening marketplace health care premiums. Enrollment in ACA plans more than doubled in the four years since the tax credits were introduced, according to data from KFF.

The tax credits are set to expire at the end of 2025, unless the Republican-controlled Congress opts to renew them.

On Tuesday, House Speaker Mike Johnson told reporters for The Hill there was "a lot of opposition" to renewing the tax credits.

"I'm not going to forecast that right now," Johnson said.

"Fortunately," Superintendent of Insurance Alice Kane said in a statement, the state "had the foresight" to prepare for the loss of federal premium subsidies, and will use New Mexico's Health Care Affordability Fund to cover the loss for households with income under 400% of the federal poverty level.

For a single person, this means anyone making less than $62,600 annually, or less than $128,600 for a family of four. Households making more than the 400% threshold are not eligible for state subsidies.

Even with the help of state funds, New Mexicans will see "significant rate increases," Ianakieva said, which will depend on a policyholder's age, location and plan.

Rural areas will bear the brunt of the price hikes, she said — policies will end up more expensive because of fewer providers and poorer access to health care.

"The loss of funding from the federal government is a real hardship for New Mexico," said Mary Feldblum, executive director of the Health Security for New Mexicans Campaign, a health care reform advocacy group.

When people lose their insurance, it ultimately costs the government more money, Feldblum said, because people tend to delay care until their condition is much more serious, and the state foots the bill.

"It's just good policy to have people insured," she said.