OPINION: Medicaid spending doubles, results don't

New Mexico’s Medicaid program has become one of the largest drivers of state spending — and the newest Legislative Finance Committee report makes clear that we are pouring billions into a leaking bucket. The harder we try to fill it, the faster the money slips away, because the structure itself is broken.

In 2016, New Mexico spent about $6 billion on Medicaid to cover roughly 840,000 people. Today, spending has surged to nearly $11 billion, even though enrollment has fallen below 810,000. We are paying almost double to serve fewer people. For any household or business, that math would demand immediate change. In Santa Fe, it has only meant writing bigger checks.

The Legislature has leaned heavily on provider rate hikes as the answer. Over the past three years, lawmakers have funneled $2.2 billion into rate increases, with more than $1 billion directed to hospitals alone. By fiscal year 2026, hospitals are projected to see over $1.3 billion in new rate increases, cementing them as the biggest winners in this spending surge.

Yet access has not improved. The LFC’s secret shopper survey showed patients are still making six to seven calls to book a primary care appointment and up to 14 calls for behavioral health. Nearly half of scheduled visits fall outside contractual wait-time standards. Despite Cadillac payments — sometimes double or triple those in neighboring states — New Mexico has lost more than a thousand behavioral health providers since 2022. Raising rates hasn’t built capacity; it has only raised costs.

The LFC report is blunt: After billions in new investment, “most outcomes on quality, access, and network adequacy have stayed the same or deteriorated.” Per-member costs have soared — up 97% in behavioral health and nearly 50% in long-term care since FY21 — yet outcomes remain flat. Outpatient visits are reimbursed at roughly twice the rate of Arizona and Utah, but New Mexicans still wait weeks to see a doctor.

Some policymakers now suggest setting up “trust accounts” or special funds as a new approach. But a leaking bucket with a new label is still a leaking bucket. Trust accounts don’t fix access, build workforce pipelines or deliver better outcomes — they simply formalize the same failed model under another name.

The deeper problem is structural. New Mexico has been stuck at just over 2 million people for more than a decade. A stagnant population and persistent poverty cannot sustain a thriving health care system, strong schools or safe communities. As wages stagnate, families are pushed out of employer coverage and onto Medicaid. Employers scale back benefits, the private sector retreats and Medicaid grows larger. We are trapped in a cycle: fed by dependency, starved by dependency.

What makes this worse is the predictability of political leadership. Too often, we elect officials with little knowledge or background to do more than spend. When confronted with evidence of failure, their reflex is to double down with even bigger budgets. They confuse inputs for outcomes and activity for results. Meanwhile, patients wait, providers leave and taxpayers foot the bill.

This is not sustainable. Medicaid already consumes a large share of the state’s budget. Federal changes are coming that will cap hospital rates and enforce new eligibility requirements. When those cuts hit, hospitals accustomed to outsized Medicaid payments will be back at the Roundhouse demanding backfill. The cycle will repeat, and taxpayers will pay more for less.

New Mexico cannot afford another decade of predictable mismanagement. Medicaid must be made accountable to outcomes, not just inputs. We must confront poverty, stagnation and dependency directly, and we must expect real returns on taxpayer investment. Until then, the story will not change: We will keep pouring billions into a leaking bucket, electing leaders who promise more spending but deliver no better results.

Duke Rodriguez is former Cabinet secretary of the New Mexico Human Services Department and he is the CEO of Ultra Health.