Medicaid Forward Too Costly For New Mexico

HB186 will drive health providers out of the state and increase the cost of care

SANTA FE, N.M.— New Mexico’s Health Care Future issued the following statement after the New Mexico House Health & Human Services Committee voted 6-4 to advance HB 186, a bill to implement a risky state government-controlled health care system in New Mexico.

“We are disappointed that the New Mexico House Health & Human Services Committee has voted to advance Medicaid Forward. This program could be the final nail in the coffin for New Mexico health care providers who are already struggling with low reimbursement rates from government payers and the pressure of a statewide physician shortage. Lawmakers must not ignore the risks of implementing a state government-controlled health care program that could push providers out of New Mexico and decrease access to high-quality, affordable care.”

Health care providers in New Mexico are already struggling with high costs and low reimbursement rates. A Mercer report commissioned by the New Mexico Health Care Authority recently concluded that this bill’s implementation would cause around 7 percent of New Mexicans insured by a commercial plan to switch to the one-size-fits-all Medicaid Forward system. The same report estimated that the impact of this policy on hospital expenditures would be $1.49 billion. As a result, physicians’ offices and hospitals would lose crucial payments that help them cover the costs of seeing Medicare and Medicaid patients. As of 2024, New Mexico is the most underpaid state from Medicare and Medicaid in the country. Expanding Medicaid eligibility through this government-run program could worsen the current provider environment and hurt patient access to quality and affordable care.

In addition to hurting providers’ already precarious financial situation, Medicaid Forward could exacerbate New Mexico’s significant physician shortage. Mercer report authors stated, “Given the limited enrollee financial responsibility under the proposed Medicaid Forward program, Mercer anticipates additional demand would necessitate an increased supply of providers.” Unfortunately, thirty-two out of New Mexico’s 33 counties already have a shortage of primary care physicians. Doctors are leaving the state in record numbers, and an unpredictable health care market will only increase uncertainty and worsen patients’ access to care.

Research conducted on similar government-run health care programs shows their failure to deliver increased health care access and affordability in multiple states. In Colorado, the implementation of the Public Option harmed competition and led to four health insurers fully or partially leaving the Colorado market. In Washington State, the Public Option has not lived up to promises of enhanced affordability and has failed to meet premium targets three years after its implementation.

This new study confirms that significant questions remain about the potential costs of a Medicaid Forward program to taxpayers and patients in New Mexico. Instead of moving forward with another unaffordable state government-controlled health care program, New Mexico lawmakers should heed the warnings of health care officials, providers and economic lawmakers about the negative consequences of Medicaid Forward and explore proven health care solutions that build on our current system.