February 2, 2007
To:       Nora Ranney, ACLU
From:   M. V. Lee Badgett, Ph.D. Research Director, Williams Institute, UCLA School of Law
Re:       Cost of domestic partnerships for retirees in New Mexico
SB 502 would allow retirees in the New Mexico Retiree Health Care Authority (RHCA) to enroll a domestic partner for health care benefits.  The Fiscal Impact Report prepared by the Legislative Finance Committee staff predicts an annual increase in costs to the RHCA of approximately $3 million.  The analysts base their estimate on the assumption that 5% of retirees will enroll a partner since 5% of active employees have enrolled a partner for benefits. Data from Census 2000 suggests that the rate of enrollment would be significantly lower for retirees in the near term, however, which dramatically reduces the reasonable estimate of increased health care expenditures to less than $1 million per year.
Census 2000 includes questions that allow identification of people who have an “unmarried partner.”  The partner can be either a same-sex partner or a different-sex partner.   Using the public use data provided by the U.S. Census Bureau on households in New Mexico, we calculated the proportion of people aged 18 to 61 who had a same-sex partner and compared it with the proportion of people aged 62 and older who had a same-sex partner.    In the younger group (age 18-61), 7.8% of people had an unmarried partner.  In the older group, 1.5% of people had an unmarried partner.  In other words, people in the younger group were five times more likely to have an unmarried partner than were older people.  (These comparisons are almost identical if we use a cut-off of age 60.)
Two points are worth making.  First, the Census data cannot tell us why the unmarried partnership rates differ so strikingly by age, but the difference likely relates to differences by age in couples’ desire to marry.  Over time, the older group of New Mexicans, and probably state retirees, might look more like the younger group in terms of the proportion with an unmarried partner, but it would take many years before the two groups would be identical in rates.
Second, the fact that the domestic partner enrollment rate of active state employees is lower than the rate in the population as a whole likely reflects two factors:  the fact that domestic partner benefits are considered taxable income by the IRS, and the fact that many domestic partners of state employees will have health insurance from their own employers.  A recent study of national data that I coauthored found that a fraction of employees with partners take up the opportunity to enroll a partner, which is consistent with the New Mexico state employee data.
This difference in partnership rates among older New Mexicans is important for understanding the costs to the RHCA over at least the next decade.  Since the partnership rate among people 62 and older is one-fifth that of younger people, we would expect the domestic partner enrollment rate for retirees to be 1%, which is one-fifth the enrollment rate of active (and presumably younger) employees.  Accordingly, the total cost to the state would also be approximately one-fifth of that estimated by the Legislative Finance Committee, or $680,000 in FY08 (which is 0.4% of budgeted FY08 claims) and $1.6 million over three years.

Questions and Answers:
Novak & McCreary v. New Mexico Retiree Health Authority
Why has the ACLU chosen to file this lawsuit now? Refusing to allow lesbian and gay state employees the option of including their domestic partners on their state health insurance plan when they retire has created harm for the plaintiffs in this case, as well as other state retirees.   These employees, who work just as hard as their colleagues, will be denied equal ability to cover their loved ones when they retire, causing real hardship.  We filed this suit to ensure that this unfairness is addressed and that the couples involved in this lawsuit, as well as other future lesbian and gay retirees, are able to secure the health insurance they and their partners so desperately need.
Won’t this be a big expense for the state’s taxpayers? No.  When governments and businesses first started offering domestic partnership benefits, opponents often argued that the benefits would be costly.  In the two decades since companies and state and local governments have been providing domestic partner benefits, studies have found that there is no significant increase to their healthcare costs.  Implementing this change would only result in an additional 1.8% in claims dollars paid out by the authority.
Why is this important to New Mexicans? New Mexico has one of the highest rates of uninsured in the country.  Increasing the number of insured New Mexicans benefits us all.  The costs of providing care for the uninsured represents a far greater economic burden than the costs of providing health insurance.  In fact, a report from Families USA found that health insurance premiums for New Mexico families who have insurance were $1875 more expensive in 2005 because of the increased health care costs that resulted from the high number of people in the state without insurance.  [http://www.familiesusa.org/resources/publications/reports/paying-a-premium-findings.html]
Don’t employees already have access to domestic partner coverage? In 2003, Governor Richardson issued an Executive Order that domestic partners, including same-sex couples, be included in the state’s health care benefit system.   But retiree health benefits are managed under a separate authority, so this mandate did not extend to retired employees and their domestic partners (same-sex or different-sex).
Why are you taking this issue to the courts?  Shouldn’t this issue be handled by the state legislature? Senate Bill 502, which is before the legislature now, would address this very issue by providing retired state employees the option of securing domestic partner health insurance.  Hopefully the legislature will pass this bill, eliminating the need for this lawsuit.  But the state has an obligation to treat all New Mexicans equally and when it fails in that obligation it is the courts’ role to step in and correct the unfairness.  Bringing this lawsuit now ensures that this critical issue is addressed if the legislature does not take responsibility for solving this inequity.
What is the status of Senate Bill 502? Amend Retiree Health Care Act; Senate Bill 502 (sponsored by Sen. John Grubesic) is set to face the Senate Judiciary Committee on Wednesday, February 7th, 2007.
How will this case affect lesbian and gay couples in the state? If successful, all lesbian and gay state employees will have access to domestic partner benefits after retirement.
Will this lawsuit affect private employers? No.  This case will only affect lesbian and gay employees of the state.  However, a growing number of private employers have recognized the importance of providing domestic partner benefits to their lesbian and gay employees.  According to the most recent statistics from the Human Rights Campaign, more than half of the Fortune 500 companies offer their employees domestic partner benefits.
Do other states offer domestic partner insurance benefits to lesbian and gay employees? Yes.  Thirteen states and the District of Columbia offer their employees domestic partner health benefits and more than 200 city, county and governmental agencies do so.
Have other courts ever addressed this issue and found that the state could not deny lesbian and gay employees the option of securing health insurance for their domestic partners? Yes.  In response to a lawsuit brought by the ACLU, the Alaska Supreme Court ruled that it was unconstitutional for the state to deny its employees access to the same employee benefits that it provides to married couples.  The ACLU secured a similar ruling from the Supreme Court of Montana, which ruled that the University of Montana System cannot deny lesbian and gay employees the same option of purchasing health insurance benefits for their domestic partners that straight employees enjoy.  An Oregon court has also ruled that the state must provide lesbian and gay employees with domestic partner benefits.  The University of Pittsburgh ended an eight-year legal battle over benefits by agreeing to provide domestic partner coverage to its lesbian and gay employees.  At the time of announcing the decision to give benefits, the Chancellor noted that the university needed to provide the benefits in order to remain competitive in recruiting top talent.
Won’t this case open the door for same-sex couples to marry in the state? No.  The complaint filed in this lawsuit makes it very clear that we are only seeking equal access to health insurance for the domestic partners of retired lesbian and gay state employees.  Courts do not address issues that they are not asked to address.  Since the issue of marriage in New Mexico is not before the court, this case won’t impact the rights of same-sex couples to marry.
What happens next in the case? As required by state law, we filed the case in the trial court in Bernalillo County.  At this point it is difficult to know how long the case will be in the trial court.  We should have a better understanding after the state files its answer to the complaint filed today.  The court may simply issue a decision in the case based on legal documents filed by the parties, or there may be a trial.  Regardless of what happens at the trial level, this case is most likely headed for the New Mexico Supreme Court, which will have the ultimate say in the matter.  It is likely to be several months before this case gets to the New Mexico Supreme Court.
Who is working on this lawsuit? This lawsuit is being litigated by the ACLU of New Mexico, the ACLU’s Lesbian and Gay Rights Project, and cooperating attorney Maureen Sanders of Sanders & Westbrook, P.C.  Equality New Mexico, the statewide lesbian, gay, bisexual and transgender advocacy organization, is working together with the ACLU on all fronts to end this unfairness.
How can I stay informed about developments in this lawsuit? The ACLU will provide updates about the case, Novak and McCreary v. New Mexico, at www.aclu.org/caseprofiles.  Information will also be available on the ACLU of New Mexico’s website at www.aclu-nm.org

FOR IMMEDIATE RELEASE DATE: Tuesday, December 5, 2006 CONTACT: Whitney Potter, Communications Manager, ACLU-NM PHONE: (505) 266 5915 ext. 1003 or (505) 507 9898 (cellular)
ALBUQUERQUE, NM—The American Civil Liberties Union of New Mexico announced it would take legal action against an Albuquerque homeowner’s association if it made good on a threat to fine an Albuquerque couple for projecting a sign that said “Impeach Bush” on the side of their home. The Seven Bar North Homeowner’s Association told Roberto and Linda Vasquez their sign violated a restrictive covenant implying a possible fine.  Since the couple began displaying the sign on their home in late August the sign has been shot at with firearms, neighbors have verbally assaulted the couple regarding the political message of the sign, and other neighbors have attempted to photograph the sign while trespassing on the Vasquez’s property.
“The Vasquezes continue in their desire to be good neighbors in Seven Bar North, but they refuse to relinquish their right to free speech,” said Nancy Hollander, ACLU-NM Cooperating Attorney.
The Vasquezes use a device to project the 3x3 foot message on their home that reads “Impeach Bush.”  Other homes in the neighborhood use similar devices to display holiday-related messages, such as “Happy Halloween.” Campaign signs were also prominently displayed last fall prior to Election Day.  The ACLU of New Mexico is not aware of any violation being issued against the owners of these homes.
“This disparate treatment ofthe Vasquezes raises serious concerns that the Homeowner’s Association is trying to stifle protected speech because it doesn’t like the political opinion being expressed,” said Peter Simonson, executive director of the ACLU-NM.

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