FOR IMMEDIATE RELEASE Contact: CMS Public Affairs

Friday, Aug. 23, 2002 (202) 690-6145

HHS APPROVES NEW MEXICO REQUEST

TO EXPAND HEALTH INSURANCE COVERAGE TO 40,000 PEOPLE

HHS Secretary Tommy G. Thompson today announced the approval of New Mexico’s request to expand health insurance coverage to an estimated 40,000 New Mexico residents without health insurance under the Administration’s more flexible Health Insurance Flexibility and Accountability (HIFA) Initiative.

“This approval means health coverage for tens of thousands of uninsured New Mexico residents -- including many uninsured parents whose children are already covered,” Secretary Thompson said. “By giving states like New Mexico greater flexibility in the way they provide health care to low-income citizens, we are helping millions of people across the country to gain access to quality health care.”

Under the waiver, New Mexico expects to ultimately enroll nearly 40,000 adults who currently do not have access to regular medical care. The state will expand health insurance coverage options to two populations: parents with children enrolled in either Medicaid or the State Children’s Health Insurance Program (SCHIP) whose family income is at or below 200 percent of the federal poverty level, and childless adults ages 19-64 with family incomes at or below 200 percent of the federal poverty level. (The federal poverty level is $8,860 for an individual and $18,100 for a family of four).

HIFA is a Medicaid and SCHIP waiver approach recently developed by the Bush Administration that gives states greater ability to design health insurance programs to meet the health insurance needs of their low-income populations.

Although New Mexico will use SCHIP funds as the primary source of funds for the new program, the state and the Bush Administration emphasized that covering children is the top priority of the SCHIP program. New Mexico currently covers children up to 235 percent of the federal poverty level. It is estimated that nearly half of adults with income less that 200 percent of poverty in New Mexico are uninsured.

“We are continuing to work with states to ensure that maintaining and expanding coverage for children is the top priority for SCHIP,” said Tom Scully, administrator for HHS’ Centers for Medicare & Medicaid Services (CMS). “We also want states to use the new waiver opportunity to expand health coverage to low-income adults who otherwise would not be eligible.”

“While we want states to use the new waiver opportunity to expand health coverage to adults who otherwise would not be eligible,” said Tom Scully, CMS administrator. “We also are telling states that covering children must come first.”

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Rather than expand the state’s Medicaid program through the waiver, New Mexico will use its unexpended SCHIP funds to subsidize health insurance coverage through private insurers, known as employer-sponsored insurance (ESI). The state will contract with managed care organizations to develop a benefit package that will be defined by the state. Employers will then offer the package to their low-income, uninsured workers.

The coverage will be financed with state and federal funds, employer contributions and employee premiums ranging from $20 to $35 per month, depending on income. Individuals with income less than 100 percent of the federal poverty level will not be required to pay a monthly premium. The new insurance package is expected to be attractive to employers who may wish to offer it to employees whose income are slightly higher than those in the demonstration granted today.

Secretary Thompson launched the new HIFA initiative last year to encourage states to expand access to health care coverage for low-income individuals through Medicaid and SCHIP demonstrations. The initiative gives states more flexibility to coordinate these companion programs and offers a simpler application for states that commit to reducing the number of people without health insurance. HIFA also encourages coordination between public and private coverage options for the uninsured.

As former governors, President Bush and Secretary Thompson have made it a priority to make it simpler and easier for governors to submit Medicaid and SCHIP waiver requests and to have those requests considered promptly. Since January 2001, HHS has approved waivers and plan amendments that have expanded eligibility to more than 1.8 million people and enhanced benefits for about 4.5 million people.

New Mexico is the third state to use the HIFA waiver initiative to expand access to health care coverage. Arizona and California also have been granted HIFA waivers. More information about the HIFA initiative, including an online template that states can use to submit applications, is available at http://www.cms.gov/media/.

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Note: All HHS press releases, fact sheets and other press materials are available at www.hhs.gov/news.