SANTA FE, N.M. (AP) — Premiums for health insurance covering about 73,000 state and local government workers in New Mexico and their dependents could increase by 15 percent next year under a proposal by Gov. Susana Martinez's administration.
Workers who cover their families under the health insurance program could see yearly premium increases of at least $315 to as much as $914, depending on their salaries and the choice of their health plan. Employees can select among several insurance providers and medical plans.
The General Services Department will ask the Legislature for $10.1 million in the next budget year to cover the higher rates paid by agencies as the government employer, agency spokesman Tim Korte said Tuesday.
Workers will pay about $3.2 million in higher premiums if they are implemented in the fiscal year starting July 1, 2013.
The state's health insurance fund is projected to run out of money to pay claims in the next budget year without higher premiums.
"It was strictly a budgetary necessity because of rising health care expenses and a lack of money in the health insurance fund," Korte said of the proposed premium increase.
Workers who pay for insurance coverage only for themselves could face premium increases between $107 and $213 a year for a plan with high deductibles to as much as $155 to $310 a year for other plans, according to estimates from the department. Cost varies according to a worker's salary.
The administration has the authority to set premiums, but Korte said the proposed rate increase is contingent upon legislative approval of the $10 million to pay the government's share.
Despite rising health care expenses, insurance costs for government workers have remained unchanged in the past five years as the state struggled with budget shortfalls and tight finances. In private industry, Korte said, health insurance costs have increased an average of 7 percent to 9 percent annually during that same time.
The department, which administers the health insurance program, will outline its rate increase proposal to the Legislative Finance Committee at a meeting Thursday in Angel Fire.
Korte described the 15 percent rate increase as the most reasonable approach to shoring up the health insurance fund.
Several counties and municipalities provide health coverage to their employees through the state's insurance program. It serves 43,361 state government workers and their dependents and 29,763 local government employees and their dependents.