16-02-2025
Lawmaker looks to proceed with Medicaid Forward plan, despite federal funding uncertainty
A new motto emerged among staff at BeWell, New Mexico's health insurance marketplace, after the 2024 election: "Stay calm, enroll on."
"When the presidential election happened, we really came together as a staff because there was a lot of what-if now, right?" said Alex Sanchez, BeWell's chief experience officer. "Comments had been made. Things had been said."
The health care marketplace is one result of the federal Affordable Care Act, which President Donald Trump has long criticized and threatened to repeal. Trump's reelection — in the midst of BeWell's busy open enrollment period — brought uncertainty, Sanchez said, but it didn't change the agency's mission.
The first weeks of Trump's presidency have created copious uncertainties surrounding federal funding. U.S. House Republicans on Wednesday unveiled a plan to cut spending by $1.5 trillion, including slashing a series of benefits targeted at low-income Americans. The proposal includes extensive cuts to Medicaid, the federal and state-funded health coverage program for low-income people — including more than 800,000 New Mexicans, according to 2024 data from the state Health Care Authority.
This comes as New Mexico Democrats are moving forward with legislation that would greatly expand access to Medicaid. House Bill 186, which passed the House Health and Human Services Committee last week and now faces the powerful House Appropriations and Finance Committee, would require heavy federal investments.
The cost of the proposed Medicaid Forward program would be shared on a 72%-28% split between the federal and state governments, with New Mexico paying an estimated at $995 million for more than 290,000 new enrollees. The initial federal share for the new enrollees then would be more than $2.5 billion.
A fiscal impact report for HB 186 warns about the potential of expanding Medicaid in the state during the Trump administration.
The report offers a "cautionary note": "Given the transition to a new federal administration significant policy changes at the federal level may impact New Mexico's Medicaid program."
The Trump administration previously has advocated for changes to Medicaid that could "alter the structure of federal Medicaid funding and increase fiscal uncertainty for the state," the fiscal impact report states.
By full implementation in fiscal year 2029, the report estimates, the total annual cost of Medicaid Forward would be around $4.5 billion — roughly the amount of the K-12 public education spending plan for the next fiscal year, which is the largest single share of the state's proposed $10.8 billion budget. The federal share would be more than $3.2 billion.
Rep. Reena Szczepanski, D-Santa Fe, a sponsor of HB 186, argues New Mexico should move to expand Medicaid access, despite concerns about federal changes during the Trump administration.
"It's important for folks to remember that Medicaid Forward is based in the law," she said. "It is based in the Affordable Care Act. Federal law already allows states to expand Medicaid in this way, and our federal funding remains in place until Congress takes action to change that."
The Legislature often adapts to federal switch-ups, she said.
"It is our responsibility as a Legislature to continue to bring our ideas forward," Szczepanski said. "We as a state, I think, have a responsibility to innovate, think creatively and try to solve the problem of people not having access to health care."
She added, "It's important for New Mexico to be in the lead on lowering health care costs. We cannot wait for Washington to act, and we [cannot] guess what they're going to do. We have to take ownership of this issue here, now."
'Opportunity to expand access'
Medicaid Forward is another step in a "careerlong passion" for Szczepanski: ensuring New Mexicans have access to affordable, accessible health care.
"For me, this is an opportunity to expand access to health care — to make sure that families don't have to make those tough decisions between paying the bills and filling that prescription," she said.
About 200,000 New Mexico residents currently go without health insurance.
HB 186 would authorize the state Health Care Authority to create a state-administered health coverage plan, removing Medicaid's income limit and allowing families and individuals making more than 133% of the federal poverty level to enroll.
The program would be open to some immigrants with legal residency status but would not cover undocumented immigrants.
Health coverage through Medicaid Forward would be free for those making less than double the federal poverty level — equivalent to more than $64,000 for a family of four. Enrollees above that threshold would pay health insurance premiums capped at 5% of their total household income, consistent with an existing Medicaid rule.
Study: Patient costs would decline
New Mexico lawmakers have been considering such a program for some time. In 2023, the Legislature passed House Bill 400, which tasked the Health Care Authority with studying the program's feasibility.
The final version of that study, released in November 2024 and completed by the government and human services consulting firm Mercer, found Medicaid Forward would significantly increase New Mexico's Medicaid spending — but there is a scenario in which the state's revenue from the program would outpace that cost by more than $45 million.
The study also found Medicaid Forward would decrease the individual cost of coverage for "virtually any eligible New Mexican."
Medicaid enrollment is separate from the BeWell marketplace, which would continue to offer individual health insurance policies for people who don't qualify for Medicare and don't receive health benefits through an employer.
During the House Health and Human Services Committee hearing last week, Szczepanski told lawmakers BeWell wouldn't disappear with the passage of HB 186, though initial estimates indicate Medicaid Forward could pull a significant number of patients from BeWell's client list.
BeWell itself has no official position on Medicaid Forward, Sanchez said.
"BeWell supports New Mexicans in the threshold where they don't qualify for Medicaid now, and we are seeing the utilization of subsidies. ... We absolutely are on board to brainstorm how to get more people to utilize affordable and reliable health insurance, and we're here to get them enrolled," she said.
