New Study Of ‘Medicaid Forward’ Proposal Projects Major Leap In Coverage And Significant Savings For New Mexicans

New Mexico House Democrats News: 

SANTA FE — A new study of “Medicaid Forward”, a proposed plan to provide quality, affordable health care plans on an income-based sliding scale, projects that between 407,000 and 542,000 New Mexicans would select the plan, including up to 142,000 uninsured.

The study also shows that implementation of the plan could create billions of dollars in savings across households and businesses in the state.

“Medicaid Forward is a path to provide more New Mexicans with coverage they can afford and to give employers more breathing room to reinvest in their businesses and their employees,” said House Majority Whip Reena Szczepanski (D-Santa Fe) who successfully championed legislation in 2023 to further explore this proposal. “Medicaid Forward shows an enormous return on investment for both public health and economic growth in New Mexico. I’m eager to find the best way to unleash that potential.” 

The end of the pandemic era’s continuous coverage requirement has led to over one million Americans, and tens of thousands of New Mexicans losing coverage in “Medicaid unwinding.” The sudden increase in uninsured individuals and families underscores the need to create robust and affordable coverage options to improve and maintain New Mexicans’ access to health care. This new data on Medicaid Forward shows how the program could help achieve this.

The study shows that Medicaid Forward could:

  • Provide coverage to 142,000 currently uninsured New Mexicans, reducing the state’s uninsured rate by 58.7%, making it one of the lowest in the nation
  • Cut household spending on health care by as much as 37.9%, creating $1.2 billion in household savings
  • Save hundreds of millions of dollars for employers by cutting premium payments that could be passed on in up to $874 million in increased wages and $229 million in employer savings, even after accounting for potential employer contributions to the program
  • Help the state increase provider Medicaid reimbursement rates by up to 17% and create savings for the state after accounting for the cost of the Medicaid Forward program

Medicaid Forward would make Medicaid coverage available to all non-elderly New Mexicans (elderly New Mexicans are already eligible for affordable health coverage through Medicare) and cap household insurance spending at 5% of income for all who enroll. Currently, Medicaid eligibility is limited to individuals making $20,120 or less.

“During the COVID-19 public health emergency, the Medicaid program received a temporary enhancement that helped thousands of New Mexicans keep their insurance coverage. Now that the emergency program is ending, we are looking at ways to ensure people have affordable insurance coverage,” said Senator Siah Correa Hemphill (D-Silver City). “Medicaid Forward presents an opportunity to massively expand coverage and cost savings across New Mexico.” 

Medicaid Forward could also solve the persistent challenge of the “Medicaid cliff” faced by those earning incomes just above the threshold to qualify for Medicaid. These New Mexicans are the most likely to be uninsured or financially burdened by the cost of insurance. The study shows that this income group would likely see the greatest increase in coverage under Medicaid Forward, with the uninsured rate for those on the Medicaid cliff dropping by 62.8%, from 23.8% to 8.9%.

If implemented, Medicaid Forward could lead to improved coverage and cost savings across the board for all New Mexicans. The program could also help New Mexico recruit and retain providers and leverage Medicaid’s 3-1 federal match, bringing substantial federal resources into our health care system.  

This study was conducted by the Office of the Superintendent using the Urban Institute’s Health Insurance Policy Simulation Model to project the cost and coverage effects of the proposed health care policy. The full study can be found here.

In the 2023 Session, Whip Szczepanski successfully sponsored legislation (HB 400) that directed the Human Services Department to develop recommendations for the implementation of Medicaid Forward and complete an additional study of the proposal that will build on OSI and the Urban Institute’s research. These HSD recommendations and research will be released early next year so that lawmakers can review and consider the implementation recommendations ahead of the 2024 Legislative Session. 

HB 400 passed with broad bipartisan support. Additional sponsors of the legislation include House Speaker Javier Martínez (D-Albuquerque), Senators Hemphill and Leo Jaramillo (D-Española), and Rep. Patricia Roybal Caballero (D-Albuquerque).

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