New Mexico leads nation in percentage of residents enrolled in Medicaid: Here's why that matters

LAS CRUCES - New Mexico now leads the nation in the percentage of residents enrolled in Medicaid, and faces the potential of a $170 million shortfall in the program by fiscal year 2022, state Medicaid Director Nicole Comeaux told members of the Legislature’s Health and Human Services Committee on Friday.

She said before the start of the COVID-19 pandemic, New Mexico was third in the nation for the percentage of residents enrolled in Medicaid.

“Throughout this public health emergency, we have really seen unprecedented growth that has led us to that slot,” she said. “For that reason, we feel an immense responsibility to ensure that our (health care) providers get adequate reimbursement.”

She said Medicaid is now “easily the largest payer in the state,” for health care services.

Karen Wells, a staff analyst for the committee, explained that Medicaid is a hybrid program funded by both the state and federal governments that is primarily intended to serve people of low income. It is completely separate from Medicare, which is funded entirely by the federal government and is primarily intended to serve people over the age of 65.

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Medicaid uses a sliding scale called the Federal Medical Assistance Percentage, or FMAP, to reimburse states for a portion of their health care costs, Comeaux said. States with higher poverty rates receive a larger percentage.

Nationally, about one out of five people are covered by Medicaid, with the federal government covering about 65 percent of the cost, she said.

Since COVID, Medicaid enrollment has climbed

In New Mexico, Medicaid enrollment has grown from 40 percent at the start of the pandemic to 43 percent now, and is higher in some areas of the state. In Sierra County, nearly four out of five residents are covered by Medicaid, Comeaux said.

At the start of the pandemic, there were 836,000 New Mexicans enrolled in Medicaid, she said. By this June, that is expected to climb to 931,000.

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The state is receiving additional matching funds from the federal government as part of the national emergency, Comeaux said. But, one of the federal requirements is that nobody be dropped from the rolls until the emergency ends.

Because enrollment growth did not begin immediately after the state started receiving the higher rate, the program will end up with a surplus of about $45 million for fiscal year 2021. But that will be followed by a $170 million shortfall in FY2022.

“We are doing our best, but this has been an unbelievable lift,” Comeaux said. “This has been a big drain on our resources.”

The National Governors Association has requested that Congress extend the increased payments for a period of time after the emergency is lifted to help make up for the lag, Comeaux said.

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She said once the emergency is lifted, about half of those now on the Medicaid rolls are expected to drop off. Most of them will transition to the state’s Centennial Care managed care program, she said.

Another concern for the upcoming year will be the cost of COVID-19 vaccinations, which are not now included in the Medicaid budget, Comeaux said. She said if 60 percent of the population is vaccinated, it will cost about $2 million. Their goal is to get an even higher percentage than that vaccinated.

Friday’s meeting was informational. The committee will begin hearing bills Monday morning.

Walter Rubel can be reached at waltrubel@gmail.com.