The Medicaid Opportunity in New Mexico: Frequently Asked Questions

Doesn?t Medicaid already cover the poorest New Mexicans?
No. Most low-income adults cannot qualify for Medicaid right now. Medicaid covers some low-income New Mexicans already: children, pregnant women, people with disabilities, elderly people, and extremely lowincome parents. But most low-income adults can?t qualify for Medicaid now no matter how low their income level ? many adults who are living in poverty do not qualify for Medicaid, and parents who work ? even if they earn minimum wage ? typically make too much money to qualify. The Medicaid Opportunity would provide coverage to over 170,000 uninsured New Mexicans with incomes below 138% of the federal poverty level ? about $15,000 for an individual and $32,000 for a family of 4. New Mexico currently has the second highest rate of uninsured people in the nation. This is our chance to change that.

Will the Medicaid Opportunity cost $500 million between now and 2020?
No. In fact, the state makes money in the first seven years. The federal government pays the entire costs for three years. After that, the state must start contributing (5% in 2017, 6% in 2018, 7% in 2019, and then 10% in 2020 and beyond). For the first seven years, the state pays an average of 4% of costs. This 4% is returned to the state through a 4% premium tax paid by insurance companies. So no matter how many people enroll under the Medicaid Opportunity, the premium tax pays the state?s costs in the first seven years. And the state will realize additional tax revenues on the influx of federal funds into the state. Accounting for all these new revenues, the Legislative Finance Committee projects a net gain to the state?s general fund of $340 million in the first seven years. And even if you don?t consider the revenues, the Human Services Department?s $500 million figure it greatly inflated because it counts other costs that will occur regardless of whether the state takes the Medicaid opportunity, such as the costs of enrolling children who are already eligible for Medicaid. In fact, according to the UNM Bureau of Business and Economic Research, state expenses for the new Medicaid coverage will be $200 to $260 million over seven years. And because the state will save money from transferring enrollees from the SCI program into Medicaid, the net expenses are actually a maximum of $18 million over seven years ? and the state may even save money.


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