New Study: New Mexico Families Can’t Afford New State Government-Controlled Health Insurance System

August 4, 2020

SANTA FE – A new KNG Health Consulting study examining the consequences of a proposed state government-controlled health insurance system in New Mexico finds “segments of the private insurance market would likely disappear altogether” and as a result “could produce financial hardship to New Mexican households and businesses.”  In fact, the proposal could lead to a nearly $6 billion budget shortfall that may require “additional funding sources … to fully cover the cost of the plan” and would result in higher premiums for families in the Land of Enchantment.

High costs have doomed similar attempts to implement one-size-fits-all new government health insurance systems in various states, including Colorado.  And even a far less ambitious state government-controlled health insurance system in Washington State has failed to get off the ground.

High Costs And Unaffordable Tax Hikes Have Doomed Similar Attempts To Implement One-Size-Fits-All Government Health Insurance Systems On The State Level:

  • Colorado, Massachusetts and Vermont all “failed at pursuing single-payer,” systems due to the high cost of implementation, Third Way reports.
  • “States’ attempts at [new government-controlled health insurance systems] haven’t ended well,” The Wall Street Journal reports.  After the unaffordable costs of a new state government option in Colorado were made clear to voters, “voter opposition, which had been at 50% in January 2016, jumped to 65%by August of that year, according to Magellan Strategies polling.  Voters rejected the measure by 79% to 21%.”
  • Recent efforts to establish state government options in Washington State and Colorado proved unsuccessful after “officials were forced to scale back their ambitions because of financial concerns and industry opposition,” Dr. Joseph Antos and James C. Capretta of the American Enterprise Institute explain in The New York Times.
  • The New York Times editorial board acknowledged that “[i]n Vermont and Colorado, legislators dropped bids for a state-run single-payer system when it became clear that people would not support the tax increases needed to sustain such a program.”
  • In fact, in Colorado implementation of a single-payer system would require a budget of $36 billion a year – $10 billion larger than the entire 2017 state budget. (Colorado Health Institute, 8/1/16; Colorado Joint Budget Committee, 6/28/17)
  • Vermont’s attempt to implement a single-payer system failed after analysis revealed it would have required a 151 percent increase in total state taxes. (State of Vermont, 12/30/14; Third Way, 7/17/19)
  • And in Massachusetts, analysis of the state’s total health care spending revealed implementing a single-payer system would require an increase in the state’s budget of more than 50 percent. (Third Way, 7/17/19)
  • In an interview with The Atlantic, Democratic New York Governor Andrew Cuomo was blunt about the political and fiscal realities of implementing a government-run health care system in the Empire State, saying “no sane person will pass it” and “you’d double everybody’s taxes” to pay for it.