Medicaid Forward is a bad bill – vote no

It appears chaos has engulfed Washington, D.C., and its effects are starting to be felt in New Mexico. Only a few weeks ago, funding for essential services, including Medicaid, was cut off abruptly and without explanation by the federal government.

Thankfully, after several tense days, most of these programs were reinstated, yet looming questions on the fate of federal funding for programs persist. With the reliability of federal funds in question, we should move to protect our state from the instability as best we can, including for those most vulnerable.

Unfortunately, legislation making its way through the New Mexico House of Representatives — House Bill 186, a Medicaid Forward initiative — may do the exact opposite. If signed into law, this bill will spell disaster for health care in New Mexico and leave us at the whims of an ever-changing Washington.

The Medicaid Forward proposal would dramatically lower the eligibility requirements for Medicaid, to include those under 65 and families and individuals making more than 133% of the federal poverty level. To pay for this expansion, the state will pay 28% of the costs — an estimated $995 million. The rest relies on a federal government obsessed with cost-cutting to pay out more than $2.5 billion while ignoring the dire reality of health care in New Mexico.

However, the bill’s fiscal impact report is cause for concern, with the cost being a key issue for programmatic or administrative implementation. The report sates, “There is significant uncertainty regarding the overall costs of implementing Medicaid Forward and potential impacts to the remainder of New Mexico’s health insurance market.” Additionally, the fiscal impact report says that cuts to or restructuring of Medicaid payments will also call into question the program’s feasibility: “The new administration has previously advocated approaches such as block grants or per capita caps, which, if implemented, could alter the structure of federal Medicaid funding and increase fiscal uncertainty for the state.”

As recent events have shown, federal dollars are far from guaranteed. The Medicaid Forward bill relies too heavily on the assumption that New Mexico will not have to shoulder most of the burden. Yet as we continue to watch with bated breath the unfolding changes in Washington, those assumptions should be viewed with increasing skepticism.

Regardless of whether the feds match the requested funding, Medicaid Forward is already setting off alarm bells closer to home. New Mexico’s medical system has been pushed to limits, with unsustainable costs and a rampant physician shortage. This program will likely only make matters worse.

To start, New Mexico is among the most underpaid states from Medicare and Medicaid reimbursements for providers. Increasing the pool of Medicaid recipients will spell disaster for health care. A study by Mercer found that 7% of New Mexicans insured under private plans would switch over to Medicaid Forward. This would cause serious problems for providers who rely on private plans to cover the costs of providing care to Medicaid and Medicare patients. In fact, Mercer estimates that the Medicaid Forward program would have an estimated impact of $1.49 billion on hospital expenditures, further straining the system.

This strain would come at a time when almost every county in New Mexico is experiencing a primary care shortage. The Medicaid Forward program would place more pressure on health care providers and exacerbate this shortage, causing more doctors to leave for other states en masse and leave patients scrambling to get the care they need from doctors they trust.

Needless to say, this legislation is a big risk for New Mexicans. New Mexico families can’t afford for their legislators to take a massive gamble of relying on federal dollars that could dry up at any time amid the chaos in Washington, leaving our state’s taxpayers holding the bag.

Allison Riley is the New Mexico Chamber of Commerce director of public policy.