Medicaid is New Mexico’s largest health care provider. Lawmakers will address requests for additional funds from state agencies and potential future cuts at the Oct. 1, 2025 special session. (Photo via Getty Images)
BY DANIELLE PROKOP
Source NM
https://sourcenm.com/
New Mexico lawmakers will convene Wednesday to address upcoming federal impacts to the state’s Medicaid program, including funding cuts and new work requirements.
Here’s a brief introduction to some of the important facts and figures around the federal-state health insurance program for low-income residents.
Why is Medicaid important to New Mexico?
Among the states, New Mexico has the highest Medicaid enrollment per capita at 42% of the state’s population, according to the state Health Care Authority’s fact sheet released in September.
Medicaid is the largest expenditure in the state’s health care budget. The state’s Medicaid program covers pregnant women, children; families; people with disabilities; people who are elderly and need long term care; people experiencing mental health crises; and more. The majority of people on Medicaid in New Mexico are employed.
Medicaid pays for more than half the births in New Mexico, and covers 294,566 children as of August 2025.
According to the HCA’s analysis in March, Medicaid patients make up nearly one-third of the state’s hospital volume and New Mexico receives approximately $3.9 billion in annual Medicaid payments per year.
https://sourcenm.com/2025/06/23/new-mexico-hospitals-and-patients-face-closure-from-domino-effect-of-potential-medicaid-cuts/embed/#?secret=OWdPiEfCvC#?secret=Z9GMz4x45m
How does the federal budget bill impact New Mexico’s Medicaid?
The so-called “Big Beautiful Bill” passed by congressional Republicans earlier this year included cuts to the Medicaid program and limits on eligibility. Officials expect those changes will shift more costs to the state.
Currently, New Mexico pays about 30% for Medicaid while the federal share is about 70% (it can be up to 90%, depending on the patient’s income).The federal government wants to reduce that percentage, which could cost the state hundreds of millions of dollars to replace.
“No state can meet such an abrupt and costly funding need, which is the point — this proposal is intended to force states to stop covering working-age adults,” the Health Care Authority said in its memo, possibly leaving a large uninsured population.
The New Mexico Health Care Authority estimates that the state’s Medicaid program could see losses exceeding $8.5 billion over the next decade from lowering how much they pay providers.
New eligibility requirements will mean an estimated 88,530 New Mexicans will lose Medicaid coverage permanently, according to the Health Care Authority. That includes nearly 10,000 active Medicaid non-citizens.
At least 254,400 adults on Medicaid will be subject to Medicaid’s new work requirements.
Additionally, the federal mandates will require patients who make less money to pay for cost-sharing of up to $35 per service. While primary care, mental health, and substance use disorder services are exempted, advocates worry this will deter people from seeking care.
When do the Medicaid changes go into effect?
The bulk of the changes will take several years to go into effect. The permanent disenrollment of active Medicaid non-citizens will occur by October 2026. New work requirements go into place in January 2027, and the state’s rate cuts will begin in January 2028, along with cost-sharing.
What other concerns about Medicaid will lawmakers address?
Lawmakers will address additional funds for the state’s food assistance and Medicaid computer system, which will require $24 million to update and run.
The Health Care Authority said new eligibility requirements will impact the state’s marketplace for transitioning people off of Medicaid, but who do not have health insurance through their employers. Members who were brought to the U.S. as young children classified as Deferred Action for Childhood Arrivals (DACA) are no longer eligible for the state’s marketplace coverage starting on Oct. 1, 2025.
What opposition will shoring up the state’s Medicaid face?
Republican lawmakers have said in meetings and in interviews that concerns about cuts to federal health care and food assistance programs are overblown, and noted they will not go into effect for several years.
In a Sept. 19 interview with Source NM, Senate Minority Leader Bill Sharer (R-Farmington) said he opposed the governor’s call for a special session.
“But the question is: What is her big emergency? And as far as I can tell, there is no big emergency other than my belief, she just simply wants people to stand up and talk bad about President Trump,” Sharer said.