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Health Insurance Auto Enrollment and Down Payment


The Problem

The Affordable Care Act enshrined monumental consumer protections and coverage expansions into law, finally giving people with pre-existing conditions access to quality, affordable coverage. But Congress eliminated the “free-rider fee” which requires those who have affordable coverage available but don’t sign up to pay a penalty at the end of the year, causing premiums to skyrocket and enrollment to decline. The Commonwealth Fund estimates that premiums in New Mexico would be more than 20% lower with the coverage requirement still in place - the biggest drop in the nation.

The Solution

Instead of penalizing people when they have affordable coverage available but don’t enroll, give them the opportunity to use those dollars to enroll in coverage when they file for taxes.

How It Works

1. When a person files their taxes, they’ll check a box to say that whether or not they have health insurance.

2. If they check “no,” they will have to option to use what otherwise would be a penalty payment to purchase coverage and have the New Mexico Health Insurance Exchange determine eligibility for federal financial assistance using information from their income tax filing.

3. They will then have a window of time to sign up for a plan or have the New Mexico Health Insurance Exchange automatically enroll them in the highest value, lowest cost plan available. 

  • Expands Coverage. Up to 57,000 uninsured New Mexicans who may be eligible for federal financial assistance could be enrolled in quality coverage that costs no more than the penalty.
  • Improves Affordability. Premiums will drop as more people get covered.
  • Boosts the Economy. Creates a healthier and more financially secure workforce.
  • Lays the Groundwork for Ambitious Reforms. Puts New Mexico in a strong position to advance a Medicaid buy-in using federal waivers. 2 Background and Support National policy expert Stan Dorn of Families USA has helped New Mexico develop a plan to operationalize the idea. A working group convened by Health Action New Mexico in partnership with BeWellNM has worked on the plan.
  • Presented to the New Mexico Health and Human Services Committee
  • Presented to the New Mexico Market Stabilization Task Force
  • Established a working group to develop policy options
  •       ○ Participation from legislators, state agencies, advocates, policy experts, providers, and health insurance carriers
  • Polling underway
  •       ○ Poll in Maryland for similar approach found 60% support, including strong support from Republicans and Independent
  • Policy support from the National Center on Coverage Innovation and Families USA

Policy Status

Legislation has been drafted, and Health Action is working with interesting parties to get input. For more information or if you would like to get involved, please email

News and Resources

Is Maryland the Next State to Approve an Individual Mandate?

MD Health Insurance "Down Payment" an Improvement Over ACA Mandate

Families USA: Health Insurance Down Payments Would Cover Thousands of Uninsured Marylanders