Competition lacking as candidate’s firm oversaw health pool

SANTA FE, N.M. (AP) — A consulting group once co-owned by Congresswoman and gubernatorial candidate Michelle Lujan Grisham received contracts to supervise a statewide health insurance pool through a public bidding process but had no competition, according to a review of records requested by The Associated Press.

Lujan Grisham’s involvement has come under fire in Republican-sponsored attack ads labeling the congresswoman as “shamelessly corrupt” and warning of scandals yet to come if she’s elected.

Lujan Grisham, a Democrat who is running to succeed Gov. Susana Martinez, calls the ads misleading and deceptive.

On the campaign trail, Lujan Grisham has embraced her former private partnership’s role in the New Mexico Medical Insurance Pool as evidence of her commitment to helping severely ill people and as validation of her expertise.

A new television ad from the Republican Governors Association intones that Lujan Grisham “cashed in while seriously ill patients paid more for their health insurance,” echoing prior ads from Republican gubernatorial candidate and Congressman Steve Pearce.

New Mexico’s high-risk insurance pool was created in the 1980s as an option of last resort, long before the state’s federally subsidized health exchange was set up under the federal Affordable Care Act. Initial enrollment was dominated by people with pre-existing conditions who otherwise might forgo medical care or be driven into bankruptcy.

Managers of the pool say average premiums are roughly 10 percent above market rates — though low-income pool customers are eligible for discounts of up to 75 percent.

“For the vast majority of patients therefore, premiums are not higher,” Lujan Grisham spokesman James Hallinan said. “In fact they could not even get comparable care through other vehicles.”

The health insurance pool had been overseen by Patricia Jennings, an architect of the pool’s enabling legislation, until her health started to deteriorate in 2007. Jennings then recruited state Rep. Deborah Armstrong to her company to help oversee it.

Armstrong and Lujan Grisham co-founded Delta Consulting Group in 2008 and later submitted a bid to take over supervising the health insurance pool.

Delta’s initial bid proposal highlighted that Armstrong was already largely responsible for oversight of the insurance pool.

Records provided by the New Mexico Health Insurance Pool show that Delta Consulting Group was the only bidder.

Delta again bid on the contract in late 2012, just after Lujan Grisham’s first congressional win.

The proposal noted that Lujan Grisham would remove herself from active management and her daughter — along with the daughters of Armstrong and Jennings — would join Delta’s corporate board.

Lujan Grisham earned $376,000 from Delta Consulting between 2013 and 2017, according to tax returns released by the candidate in May.

Insurance pool board member John Arango said requests for bid proposals issued in 2009, 2013 and 2017 were designed to ensure compliance with the state procurement code and allow for open competition — even if they attracted only one bidder.

“We have always been very clear that if we got a bid that was better than Delta, that they would get the contract,” Arango said.

The current annual contract is worth roughly $790,000, providing management oversight of a $90 million health program.

State Auditor Wayne Johnson, an appointed Republican currently seeking election, says a preliminary inquiry into the insurance pool procurement process shows it may not have properly advertised opportunities — including the contract won by Delta.

His call for a special audit of the insurance pool has been blocked by a lawsuit from the pool’s board of directors.

Hallinan attributed the selection of Delta to the firm’s “experience and knowledge.”

“The Board recognized that the extensive experience offered by Delta more than met the needs of the pool,” he said.

Current enrollment is about 2,400 people, down from a peak of more than 8,500.