State Rep. Terry McMillan, a freshman Republican from Doña Ana County, describes the future of health care in New Mexico in consumerist terms: "like a mall for health insurance plans."

The proposal behind that description is a health care exchange—and it's a concept central to New Mexico's unfolding debate over health care reform.

The logic of an exchange is simple: "You can go to one place, compare the products, shop price and shop the coverages that are available," McMillan, a surgeon, says. Instead of a one-size-fits-all insurance plan for an entire office, employers can contribute to the exchange and let their employees pick the plan that best fits them. In McMillan's view, an exchange will increase competition among insurers, thereby bringing down health care costs and expanding coverage to the uninsured.

The exchange idea isn't unique to McMillan—or even, for that matter, to New Mexico. A major tenet of the federal Patient Protection and Affordable Care Act passed in March 2010 holds that uninsured Americans will be able to purchase health coverage via a nationwide exchange by Jan. 1, 2014.

That date also is the deadline for states to implement their own exchanges—if not, the federal government will impose one.

That deadline (and the attendant promise of federal funding) has prompted a frenzy of legislation. More than 20 bills and resolutions are currently pending in the New Mexico Legislature, ranging from allowing tax credits for private health care expenditures to establishing a statewide health co-op.

"All of us have the goals of wanting people to have comprehensive insurance," Mary Feldblum, the executive director of the Health Security for New Mexicans Campaign, a 147-member health policy coalition, tells SFR. "The question is how you get there."

That question has become more heated as the legislative session wears on. Though three federal judges have upheld the federal health care law and an effort to repeal it fizzled in the US Senate earlier this year, it's still a political lightning rod.

"The decision is: Does New Mexico set up an exchange this session? If so, what type? Or does it postpone the decision until after this cost analysis, or does it do both?" Feldblum says.

Bernalillo County Democrats Sen. Dede Feldman and Rep. Danice Picraux are in the first camp, and offer specific proposals for a New Mexico health insurance exchange.

Then there's McMillan, whose bill lays only the basic foundation for an exchange—an approach he says will allow the Legislature to build it one step at a time.

"A lot of the other bills were a race to try to say what this exchange was going to do," McMillan says. "It's not in our interest to do that. There's plenty of time."

But exchanges themselves have flaws, Feldblum says. Since they're often aimed at uninsured people, exchanges may duplicate efforts in other arenas, such as Medicaid.

While exchanges offer consumers more freedom, she says, they often lack cost controls.

"Essentially, it's taxpayer dollars—government subsidies to the uninsured to purchase insurance without any premium controls," Feldblum says.

Massachusetts, the only state with a long-term, functioning health insurance exchange system, has the highest premium costs in the country, she notes—and the cost of subsidizing those ever-increasing premiums has exacerbated that state's budget woes.

A partial answer lies in the Health Security Act (SB 5), which attempts to contain insurance costs by creating a single health care umbrella and streamlining administrative functions.

But Feldblum says even cost containment won't necessarily keep premiums from rising, putting New Mexico in a Massachusetts-like budget bind.

State Rep. Eleanor Chavez, D-Bernalillo, offered a possible solution in HB 257, a bill that requires the nonpartisan Legislative Finance Committee to examine various health care systems before committing to any of them.

"We need to remember that the exchange is not the only model," Chavez tells SFR.

Chavez' bill was voted down on the House floor—but a twin bill sponsored by Sen. Linda Lopez, D-Bernalillo, may have a chance.

Feldblum says her coalition favors postponing any decision on an exchange until more "number crunching" is done. But, she concedes, even if "they do set up some kind of an exchange, it's not mutually exclusive to continue the data-gathering process, so at least decisions are made with eyes open."