Community Council: Medicaid critical for health care and economy

A health care system, once decimated, takes a long time to recover. New Mexicans learned that the hard way in 2013, when then-Gov. Susana Martinez froze Medicaid funding for 15 behavioral health agencies, making claims of fraud that were ultimately unsubstantiated. Although the targeted providers were vindicated in court, most were forced to close, leaving thousands of patients without care and kick-starting the public safety and child welfare crises afflicting our state today.

The drumbeat emanating from Washington has a familiar rhythm. Last week, the U.S. House of Representatives adopted a budget resolution calling for almost $1 trillion in cuts in federal Medicaid spending over the next 10 years. The president, who needs those health care funds to finance high-income tax relief, says that the savings will come from rooting out fraud. However, eliminating every vestige of fraud in Medicaid would save only a tiny fraction of that amount. It won’t come from immigrants, either. Undocumented people can’t get Medicaid coverage, and Emergency Medicaid, which reimburses hospitals for uncompensated care provided in medical emergencies, is less than 1% of the Medicaid budget.

The pain of Medicaid cuts will afflict the entire nation, but the damage to New Mexico will be especially acute. Medicaid accounts for $1 in every $5 spent on health care in the U.S. In New Mexico, Medicaid accounts for an even greater share of health care spending. Medicaid cuts will mean even fewer health care providers, longer wait times, higher health care costs, fewer jobs and higher taxes for New Mexicans. New Mexico’s Medicaid program covers medical care, behavioral health, long-term care and other services for more than 760,000 New Mexicans, according to KFF, formerly the Kaiser Family Foundation, including over 60% of our state’s children. New Mexico Medicaid is a $10 billion program, with over $7 billion coming from the federal government. Medicaid pays for 55% of New Mexico births, and constitutes one-third of revenue for our hospitals and 40% of revenue for nursing homes.

Medicaid covers people of all ages who can’t afford health insurance and helps keep our most vulnerable and medically fragile citizens out of institutions. New Mexico’s health care system relies on Medicaid because without it, hospitals, physicians and our entire health care continuum would have to absorb billions in losses from providing health care to the 40% of New Mexicans who can’t afford it. Providers that don’t simply close their doors due to Medicaid cuts will have to shift those losses onto other patients. This means fewer providers, longer wait times and higher health care costs across the board.

Medicaid cuts will cripple New Mexico’s economy. If our state is ever to ascend economically, we need more and better health care, not less. Health care employs more New Mexicans than any other single sector, accounting for one in six jobs statewide. Closing hospitals and clinics would mean financial catastrophe for both rural and urban communities. These impacts would not be confined to the health care sector. Each job in health care supports 1.7 jobs in the broader community.

Medicaid is particularly crucial to our state’s economy because most of it is federally funded. The federal government pays 70%-90% of Medicaid costs in New Mexico, depending on the population being served, according to the Legislative Finance Committee. This sort of leverage is virtually unheard of in any other sector. Further, health care dollars spent in New Mexico stay in New Mexico because they pay the salaries and improve the health and productivity of New Mexicans.

Most New Mexicans won’t benefit from federal tax breaks paid for with Medicaid dollars, but they will pay for those cuts in higher health care costs, fewer jobs and higher taxes needed to sustain New Mexico’s health care infrastructure.