by Mónica Rae Otero, LMSW
Policy Analyst
July 8, 2026

Medicaid provides essential health coverage for nearly half of all New Mexicans, including children, pregnant people, seniors, people with disabilities, and working families. It helps people access the care they need, keeps families healthy, and protects them from crushing medical debt. 

Previously, New Mexico Voices detailed how the One Big Beautiful Bill Act (OBBBA) threatens access to affordable health care. Now, a new interim final rule from the Centers for Medicare & Medicaid Services (CMS), released on June 1, makes those threats even more severe. 

The interim final rule imposes burdensome work reporting requirements and more frequent eligibility checks that could cause as many as 109,000 New Mexicans to lose Medicaid coverage: a 38% reduction in Medicaid expansion enrollment. Rather than connecting people to care, the rule creates unnecessary red tape for enrollees and state agencies alike. It requires Medicaid expansion enrollees to repeatedly document work or qualifying activities, even though an estimated 70% already meet the requirements, making paperwork, not eligibility, the greatest threat to keeping health coverage. 

The new CMS interim final rule, released on June 1, threatens to make matters even worse. The rule creates strict and unreasonable work reporting requirements and more frequent eligibility determinations, threatening coverage loss for as many as 109,000 New Mexicans (a 38% decrease). The law burdens medicaid expansion enrollees and state agencies with increased red-tape paperwork requirements to prove a qualifying activity when 70% of this medicaid population already meets the requirements.

Since Congress passed the OBBBA last July, New Mexico’s Health Care Authority (HCA) has been diligently planning for the January 1, 2027 launch of Medicaid work reporting requirements. The timeline for implementation was already tight, risking room for errors that could lead to denial of coverage for our most vulnerable populations. With the release of this rule, states must now implement even higher barriers for demonstrating medical exemption from work reporting requirements, far from protecting the vulnerable. Furthermore, through this rule, CMS is requiring redundant documentation and prohibiting states from taking full advantage of helpful tools that help streamline the eligibility process like self-attestation after 2027.     

The HCA now has the chance to do everything in its power to protect those who will be hurt most by this guidance and maximize as much flexibility in its implementation as possible. This can include medical frailty documentation counting for 12 months, averaging the pay of seasonal workers over 12 months, and other implementation tools that will mitigate coverage loss.

As these new requirements are implemented, families should prepare for any upcoming changes. To avoid disruptions in coverage, families should ensure their contact information is current on their YES.NM.GOV account and reach out to the Health Care Authority with any questions about their benefits and renewal status.