Medicaid is a key part of the solution to poverty - Albuquerque Journal

Medicaid is a key part of the solution to poverty

The Journal’s Feb. 25 editorial correlates the high and rising enrollment of New Mexicans on Medicaid with our state’s economic challenges. Growing Medicaid enrollment and the federal dollars brought into our state during an emergency are not the cause of our economic problems; we believe they are just the opposite. Let’s look at the numbers.

The Human Services Department provides support to 1,015,713 low-income New Mexicans — 48% of our population — who meet strict federal requirements for our programs. That includes Medicaid — 911,572 people, 43% of our state, SNAP food benefit program — 505,841, 24%, energy assistance, among others.

New Mexico has the third-lowest annual per capita personal income, $43,326, in the United States. Consequently, it ranks as the second-highest state for poverty at 18.2%, third for child poverty at 24.9% and first for seniors at 13.5%. New Mexico also ranks second for child hunger at 23.8% and has the second-highest suicide death rate, 25 per 100,000 residents, in the country.

Review hundreds of pages of related details in the 2021 HSD Data Book.

New Mexico receives a very generous federal match for every dollar we spend from our state general fund because of our low average per capita income. It averages around $4 federal to $1 state, with some programs as high as 9 to 1. The poorest states get the most federal tax dollars because we have the greatest need to maintain a strong safety net.

It’s true, Medicaid pays less than commercial insurance, and hospitals struggle with this. But payment rates at a 90% level are much better than the 5-10% hospitals would get if our Medicaid recipients were uninsured. Additionally, Medicaid takes steps to help ensure the financial viability of our safety net. When utilization decreases impacted revenue for health care providers early in the pandemic, Medicaid temporarily raised rates to help providers weather the decrease. To our knowledge, this was a step that commercial insurers did not take.

The Journal editorial points out that there is some cost shifting from public to commercial programs. But we are certain that without federal support for our Medicaid program in a state such as ours, it would be impossible to sustain commercial insurance at all. Hospitals and other practitioners would face a market where 60% of New Mexicans were uninsured.

Make no mistake – we have no goal to maximize federal dollars in our state. That is not our economic model. But we are strongly committed to ensuring every state dollar we spend goes as far as it possibly can to improve the health of our lowest-income neighbors.

What has happened during the pandemic? Unemployment immediately rose from 5.1% in February 2020 to 13.3% in July before reaching 7.7% at year’s end. The Human Services Department applied for dozens of waivers to provide additional assistance to our most vulnerable New Mexicans to help them face the scourge of the pandemic. The enhanced federal coronavirus aid New Mexico receives requires us to keep everyone on Medicaid until the end of the pandemic, and we will have 100,000 members more than originally projected very soon. But we get an additional “match,” now averaging $4.72 federal to $1 state for Medicaid. SNAP has grown by 88,527 people (21%) in 12 months.

Low-income New Mexicans are sicker than others. They have more chronic diseases, including diabetes and heart disease. We have recently learned they are four to 10 times more likely to have a COVID infection, and two to three times more likely to be hospitalized and die from the virus. And of the hundreds of graphs and charts shown over the past year, the most important driver of the pandemic in New Mexico has been poverty.

Programs that multiply state dollars during times of crisis are not the cause of our economic problems. Nor are they the torpedo that put the hole in the ship’s hull. They do not cause the economic crisis we face — poverty combined with the pandemic have done that. Rather, we believe that our programs provide one million life preservers — they help people in times of crisis, and many low-income New Mexicans are in the biggest crises of their lives.

Of course the hole in the boat needs repair. Of course, a diversified economic development approach is required. The pandemic has certainly been a wake-up call for all of us in that regard. But the $6.3 billion that our programs bring into the state each year have created and sustain tens of thousands of jobs, further stimulated the economy when those hard-earned wages are spent here, and most importantly improve health. A healthier population will be a necessary tool to repair the hole. But let’s ensure every New Mexican who needs one has a life preserver until this pandemic health care crisis has passed.

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