More than 90,000 NM residents could lose Medicaid benefits under U.S. House plan

SANTA FE — Proposed federal Medicaid changes being debated on Capitol Hill could lead to more than 90,000 New Mexico residents losing health care coverage, according to a state agency analysis.

The New Mexico Health Care Authority, which runs the state’s Medicaid program, also indicated more than 250,000 state residents could face new co-pays and increased administrative hurdles to remain enrolled, while citing an estimated $478 million budget hit to the state.

The bill still has to be approved by the U.S. House before going to the U.S. Senate, where it faces significant hurdles from within the GOP. Republican Sens. Thom Tillis of North Carolina, Lisa Murkowski of Alaska, Susan Collins of Maine and Josh Hawley of Missouri are just a few who have expressed concerns about various aspects of the bill and an intent to significantly rewrite the legislation when it lands in the chamber. Republicans control the Senate by a four-vote majority, meaning that if they lose four votes, the measure would fail.

But a top legislative official said the impact, while still drastic, could be less severe than previously feared in a state in which nearly 40% of the residents are enrolled in Medicaid — the highest percentage in the nation.

In large part, that’s because a Republican-backed plan to trim federal health care spending that’s being debated this week in the U.S. House would focus largely on individuals who qualified for Medicaid under former Gov. Susana Martinez’s 2013 decision to expand the program to more low-income adults.

The federal government currently pays 90% of the cost for that population of Medicaid recipients, which represents less than half of the state’s total Medicaid beneficiaries.

Gov. Michelle Lujan Grisham has repeatedly criticized GOP-backed efforts to reduce Medicaid spending, and said in a weekend interview on “Face the Nation” on CBS News that she would not consider revisiting the Medicaid expansion decision. Specifically, she said such a move would compromise health care access and quality of care in New Mexico.

“This is very simply an effort to destroy health care as we know it, to rip it away for everyday Americans,” Lujan Grisham said during her national TV appearance, referring to the U.S. House plan that includes much of President Donald Trump’s agenda.

But the governor also indicated the likelihood of wasteful spending in the state’s health care system, which could be scrutinized in the coming months.

She also cited the recent creation of new Medicaid and behavioral health trust funds, which are intended to provide future funding to maintain state services for low-income residents and those dealing with mental health and substance abuse issues.

NM’s Medicaid reliance

New Mexico’s overall Medicaid enrollment has declined over the last two years after nearly doubling over the previous 12 years — from about 540,000 people in 2011 to more than 990,000 individuals in 2023.

The state currently has about 822,000 residents enrolled in the program, or nearly 40% of the state’s population, according to HCA data.

Even as Medicaid enrollment has declined, state and federal Medicaid spending has continued to increase, reaching a combined total of $11.6 billion in New Mexico for the current budget year.

Legislative Finance Committee Director Charles Sallee told lawmakers during a Tuesday meeting that the enrollment decline came after former President Joe Biden’s administration barred states from removing individuals from getting Medicaid during the COVID-19 pandemic.

He said some of the individuals who received Medicaid benefits at the time likely did not meet eligibility requirements.

However, Sallee said the federal proposal for increased work requirements — at least 80 hours per month — for certain adult Medicaid recipients would likely lead to more uninsured New Mexicans, describing such requirements as a “proven strategy for impacting enrollment.”

Sen. George Muñoz, D-Gallup, also said the federal budget savings would come at the expense of a drop in the number of residents covered by the joint federal-state plan.

“We’re just saving money at the expense of someone getting health care coverage,” he said.

But legislative officials also said deeper Medicaid budget cuts might be averted, as the plan released by U.S. House Republicans and debated this week by the House Energy and Commerce Committee does not include a per-person cap on Medicaid spending or a reduction in the base federal share to states.

“I think we’ve got a little more breathing room,” Sallee said, referring to such proposals not being included in the initial bill.

Funding, provider concerns

One of the provisions in the congressional plan would reduce the federal Medicaid matching rate for states that provide health care plans to undocumented immigrants by using state funds.

New Mexico would not be impacted by that provision since it does not currently have a state program for immigrants without a lawful status, Health Care Authority spokeswoman Marina Piña told the Journal.

However, state Republican Party leaders have cited the Lujan Grisham administration’s recent decision to nix a proposed contract with a nonprofit quasi-governmental agency to provide health care insurance to undocumented immigrants, according to a Santa Fe New Mexican report.

State GOP Chairwoman Amy Barela also described the governor’s national TV interview as “fearmongering dressed up as leadership.”

Amid the partisan finger-pointing, Sen. Linda Trujillo, D-Santa Fe, expressed concern about the possible impact of the federal budget changes on New Mexico’s total number of health care providers.

“We just cannot lose our health care providers — not even one,” Trujillo said, referring to a longstanding doctor shortage across the state.