The Medicaid Forward proposal would extend New Mexico’s Medicaid program eligibility to all nonelderly residents. Newly eligible individuals would pay premiums and out-of-pocket costs on a sliding scale, with each family’s combined premiums and out-of-pocket spending not to exceed 5 percent of income. Under the proposal, Medicaid spending for most newly eligible individuals would qualify for federal matching funds at New Mexico’s standard Federal Medical Assistance Percentage (FMAP) of 73.26 percent. Large employers would be required to contribute to Medicaid Forward for workers who enroll in the program. Medicaid provider reimbursements would be raised by 17 percent for Medicaid Forward and existing Medicaid and Children’s Health Insurance Program (CHIP) enrollees.

Why this matters

This innovative proposal would make all New Mexicans eligible for Medicaid coverage at little or no cost. This report provides an analysis of its impact on health coverage, household health spending, employer health spending, government costs, and new revenue.

What we found

If Medicaid Forward were implemented in 2024,

• We estimate that between 407,000 and 542,000 New Mexicans would enroll in the new Medicaid Forward option, along with some additional enrollment in traditional Medicaid and CHIP.
• There would be between 130,000 and 142,000 fewer uninsured New Mexicans, and the uninsured rate would decline from 13.1 percent to between 6.1 percent and 5.4 percent.
• Household health care spending would fall between 28.3 percent and 37.9 percent, depending on the take-up of Medicaid Forward. Families with incomes up to 138 percent of the federal poverty level (FPL) would see the largest reductions, between 39.6 percent and 49.2 percent, though spending would be notably lower even at incomes above 400 percent of FPL, falling between 22.8 percent and 29.7 percent.
• Assuming that Medicaid would be reimbursed at Medicaid plus 17 percent, federal spending on health care in New Mexico would increase by between $1.8 billion and $2.4 billion.
• New state revenue would exceed new spending by between $3 and $51 million.

How we did it

Medicaid Forward was simulated using the Health Insurance Policy Simulation Model updated to incorporate detailed data specific to New Mexico.