Legislature Did OK by Medicaid, Given the Resources Available

The New Mexico Legislature is to be commended for sparing Medicaid serious cuts in the coming fiscal year (FY12). They did this despite the governor’s determination not to permit any revenue increases. Medicaid for kids—called New Mexikids—covers more New Mexico children than any other health insurance program. Without it, more than 300,000 children from low-income families would be without health care.

The state’s Medicaid program was facing a $300 million hole in FY12 due to the expiration of extra federal dollars that had come through the federal stimulus bill in 2009. Medicaid is jointly funded by the states and the federal government, and under the stimulus bill (the American Recovery and Reinvestment Act, or ARRA), the federal share went from about 72 percent to about 80 percent for several years. The federal share goes back down to 70 percent for FY12, leaving the $300 million gap. The Legislature found most of the money to fill that gap, even while other state programs suffered cuts for the third consecutive year.  In addition, the Legislature appropriated about $7.5 million to cover a shortfall in the Medicaid budget for the current year.

Still, this total increase for FY12 will leave New Mexico Medicaid about $20 million short of the state funds needed to meet the projected need for the coming year.  This projected need takes into account reductions in the program due to stringent cost cutting mostly already adopted by the state’s Human Services Department, which administers Medicaid.  It provides only a 1 percent increase in total spending over the current year, even though both medical costs and enrollment are growing at a much high rate.  However, the Legislature, in cooperation with the governor’s office, filled most of a very big gap in a very difficult budget year—and that’s good for New Mexico’s children.

Nick Estes is a Deputy Policy Director at NM Voices for Children