New Mexico Medicaid History and Facts

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Initial Medicaid Implementation: New Mexico began their Medicaid program on December 1, 1966. In the early years of the program, the state legislature refused to fund even a bare bones version of the Medicaid program. The state decided to not cover the medically indigent category of coverage making the program significantly cheaper but the legislature still would not fully fund it. Despite these limitations, the cost of the program continued to rise in the initial years. The state cut provider payments by 25% but these cuts were not enough to control spending in the program. On May 1, 1969 New Mexico became the first and only Medicaid program to shut down their program. For nine days the state ended their Medicaid program while the state tried to withdraw their current program and create a less generous program. This tactic was not allowed by federal law but was later added by New Mexico Senator Clinton Anderson. The provision would allow states to reduce benefits and ended the requirement that states extend benefits to all medically needy individuals by 1975. The amendment passed with little debate in the House but was eventually amended to require states to cover medically needy individuals by 1977, giving states two additional years to comply with this requirement. The amendment outlined services that the state could reduce and services that it had to maintain. This began the distinction of the mandatory and voluntary set of benefits. Prescription drugs were delineated as voluntary benefits and continue to not be mandatory to this day. This was the first major contraction of eligibility and benefits in the Medicaid program. Later it came out that the state’s Medicaid financial problems that led to these reforms and contraction of benefits available to beneficiaries was caused by profit seeking doctors and a lack of control over providers bilking the system. New Mexico politicians argued that the requirement to cover the medically needy would put significant strain on the budget of the state yet the state provided generous benefits to individuals who would have qualified for the medically needy provision including home health, vision and dental, benefits that are rarely covered for these populations.

Key Medicaid Political Issues: New Mexico has one of the highest portions of the population covered by Medicaid. Combined with Medicare and the Indian Health Service, only 41% of the population is covered by private insurance. Medicaid covers 31% of the population, the highest rate in the country. This is likely due to the fact that the state has a large number of low-income residents and New Mexico has a high number of Native Americans, many of who may receive both Medicaid and Indian health care services. Native Americans are not automatically enrolled in the Medicaid program but may enroll if they meet the income criteria. The state has struggled with mental health contracts and network adequacy around mental health care services for Medicaid beneficiaries. In 2013 the state ended contracts with 15 behavioral health providers over allegations of Medicaid fraud.

Medicaid Expansion Implementation: New Mexico implemented Medicaid expansion as part of the Affordable Care Act with enrollment beginning in October of 2013 and coverage beginning in January 2014. Republican Governor, Susan Martinez was the second Republican governor to accept the Medicaid expansion six months following the Supreme Court decision. As part of the Medicaid expansion, the state renamed their Medicaid program “Centennial Health” beginning on January 1, 2014. The renaming was accompanied by a shift from fee-for-service Medicaid to a more capitated program through integration of some pay for performance measures.The state was the first to pass a bill establishing a study committee on Medicaid Buy-In and may be going forward with the policy in future years. The state’s new governor, Michelle Lujan Grisham introduced legislation at the federal level that would allow states to elect to run Medicaid Buy-In programs. The state is also exploring avenues that would allow for auto-enrollment in Medicaid through eligibility in other state programs.

General facts about New Mexico Medicaid:

Medicaid program name: Centennial Health

CHIP Program name: New Mexikids/Mexiteens

Separate or combined CHIP: Medicaid expansion

Medicaid Enrollment: 727,000 (2018 estimate)

Total Medicaid Spending: $4.8 billion

Share of total population covered by Medicaid: 31%

Share of Children covered by Medicaid: 50% (estimate)

Share of Medicaid that is Children and Adults: 80%

Share of Spending on Elderly and people with disabilities: 36%

Share of Nursing Facility Residents covered by Medicaid: 66% (estimate)

FMAP: 72.26%

Expansion state: Yes

Number of people in expansion: 253,000 (2018 estimate)

Work Requirement: No

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