That question has been repeated and answered by state Republicans who say MLG's decision to call a special is simply an opportunity to bash Trump. Senate Minority Leader Bill Sharer claims the session is about "fantasy worries" and says no New Mexican will lose Medicaid or food stamps for at least 18 months.
To me, this session is really just to stand up there and talk about how evil Trump is because there’s nothing that needs to be fixed right now.
No doubt the Democratic majority will have sharp words for the Trump presidency and Sharer's concern about an overtly political session resonate but shocking numbers repeatedly cited by Sen. Martin Heinrich give pause to that concern. What's coming down the tracks looks like a locomotive filled with dynamite ready to explode on impact--special session or not.
Heinrich, whose estimates come from the NM Health Care Authority and other experts, has been ringing the bell for months on the potential crisis, saying the state is in line to lose $4 billion in federal Medicaid funding each year over the next five years--a $20 billion hit.
The forthcoming cuts to Medicaid--if accurate and if they stand--are an existential threat to the state's finances even as we rake in billions from oil and gas.
The stunning cuts reflect New Mexico's status as a welfare state with more residents (40 percent) dependent on the program than any other. The program costs about $10 billion annually. The Feds cover two-thirds ($6–7 billion). A $4 billion annual cut would wipe out half the federal share and leave the state staring at an estimated 90,000 people losing benefits, according to Heinrich.
It would be a generational tragedy if the ample state reserves built up in various funds had to be drawn down to make up for humongous federal cuts, not to mention the possibility of tax increases.
The Trump administration says the cuts target "waste, fraud, and abuse," including stricter work requirements for able-bodied adults and reduced funding for undocumented immigrants.
The special session will, as Sen. Sharer asserts, spend plenty of time on non urgent issues. For example, appropriating money to make up for federal public broadcasting cuts could wait until the January session. But if the session makes progress in raising awareness about what may be one of our most pressing financial challenges than it could be worth the drive up La Bajada.
THE FUTURE MEDICAID
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| Rodriguez |
Joe, the last time New Mexico truly reformed Medicaid was in 1997, when I was Cabinet Secretary and we converted a bloated fee-for-service program into a managed care system. Since then, there have been no meaningful changes — only cosmetic rebrands. Medicaid has multiplied ten fold in size and cost. Providers are leaving, patients can’t get appointments, and outcomes are flat. The strategy:
--Run Medicaid as a pharmacy benefit manager (PBM). Other states have cut out pharmacy middlemen and saved hundreds of millions. West Virginia saved $54M in its first year, Ohio uncovered $224M/year in spread pricing, and New York projects $500M+ annually. New Mexico should do the same, with full rebate pass-through and caps on reimbursable executive pay.
--Our managed care contracts must be rebid with accountability baked in. That means penalties, bonuses, secret shopper audits, and transparency. And no more underwriting golden parachutes: Presbyterian’s CEO was paid $4.5M in one year, while Molina’s CEO pocketed a $181M package built on Medicaid revenues. “If managed care means mismanaged money and million-dollar CEO payouts, we rebid the contracts and change the rules.”
--Medicaid should only serve those lawfully entitled to benefits. That means real-time eligibility checks, consistent redeterminations, and integration with SNAP. Every ineligible enrollee drains resources from those truly in need. “Medicaid is for the eligible — not everyone who slips through the cracks.”
--Massachusetts and Oregon have capped Medicaid growth at 3–4% annually. New Mexico must do the same. Families and businesses can’t outspend their paychecks — neither should Santa Fe. “A sustainable Medicaid program lives within its means.”
--About 5% of enrollees consume 50% of all spending. These patients need smarter, integrated care — “health homes,” predictive analytics, and case management to cut ER overuse, duplicate testing, and readmissions. “Care for the sickest better — and spend smarter while we do it.”
--The LFC has revealed Medicaid IT modernization costs ballooning to over $800M, with delays into FY27 and no evidence of better access. That’s nearly a billion dollars on back-office systems while patients still can’t get an appointment. Future RFPs must push IT costs onto vendors, integrate systems with SNAP, and include clawbacks if results don’t materialize.
--We’ve spent $2.2B on provider rate hikes with more than $1B going to hospitals. Yet patients still face long waits and too few providers. Any future raises must be contingent on measurable improvements in access and outcomes. “Bigger checks must buy better care. No results, no raise.”
Other states have already proven these reforms work. New Mexico has simply lacked the will. The last time we fixed Medicaid, it lasted a generation. Now, the costs are higher, the problems deeper, and the stakes even greater. The question is whether we will treat Medicaid reform with the urgency it deserves. If we don’t, nothing else — not classrooms, not roads, not water, not wages — will have the oxygen to succeed.
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