From Think New Mexico:

Senate Bill 88 has been introduced to establish a $2 billion permanent trust fund for Medicaid. The bill is sponsored by Senate Finance Committee Chair George Muñoz (D-Gallup); Senate Minority Leader Bill Sharer (R-Farmington); and Senate Minority Whip Pat Woods (R- Curry, Harding, Quay & Union counties).

The bill is supported by the nonpartisan think tank Think New Mexico, which proposed a similar fund in its recent report, How to Solve New Mexico’s Health Care Worker Shortage.

Since 1973, New Mexico legislators have created a dozen permanent funds to provide dedicated, long-term funding for policy areas like early childhood education, higher education, and conservation. However, even though health care is the state’s second largest expenditure after education, there is not yet a permanent fund for health care.

Senate Bill 88 would establish a permanent trust fund for Medicaid. The bill proposes an initial investment of $300 million, and includes three sources of ongoing funding to grow the fund to $2 billion.

The sources of funding for the Medicaid trust fund include:

• Capital outlay dollars that remain unspent after the time allocated for the funding has expired;
• Money left over from the annual budget that reverts back to the state at the end of each fiscal year; and
• Interest earned on the investment of the state’s annual budget dollars by the State Treasurer’s Office.

Dollars from those sources would be earmarked for the fund until it reaches the $2 billion goal.

When it is fully funded, the Medicaid trust fund will generate $100 million a year for the state’s share of the Medicaid program. Every state dollar is matched by $3 in federal funding, meaning that the fund will ultimately generate $400 million annually to support New Mexico’s Medicaid program.

Creating this permanent fund for Medicaid will allow New Mexico to continue increasing the reimbursement rates paid to health care providers who treat patients insured under Medicaid – 42% of all New Mexicans. Increasing those reimbursement rates would help New Mexico recruit and retain more doctors and other health care providers, since New Mexico has a higher proportion of patients insured by Medicaid than any other state, and Medicaid often pays them less than the cost of providing treatment.

“Because of the three to one federal match, setting aside permanent funding for Medicaid is the best long-term investment New Mexico can make,” says Fred Nathan, Jr., Executive Director of Think New Mexico. “Increasing Medicaid reimbursement rates will go a long way toward recruiting and retaining more of the doctors the New Mexico urgently needs.”

More information is available on Think New Mexico’s website at: www.thinknewmexico.org.