Legislators love the idea of free federal money, but New Mexico lawmakers are finding out the hard way that expanding Medicaid under ObamaCare is a very, very costly “free” endeavor. Skyrocketing enrollment in the Medicaid program has put the number of New Mexico residents on the Medicaid rolls at close to 800,000; well over what they expected.
As we covered in April, New Mexico only projected a max enrollment in new Medicaid of 170,000. They have already reached 216,000, and counting. That’s more than 46,000 more enrollees than they were planning on.
David Abbey, Director of the Legislative Finance Committee, recently told state lawmakers that “once the rate of federal cost-sharing for the expansion drops to 90 percent, New Mexico’s share will balloon to about $120 million.” Right now, Washington is paying 100 percent of costs for the new Medicaid enrollees, but beginning in 2017 that support begins to drop.
We also know from Congressman Paul Ryan, Chairman of the House Ways and Means Committee, that “The fastest thing that’s going to go when we’re cutting spending in Washington is a 100 or 90 percent match rate for Medicaid.” He has warned governors and legislatures that, “ObamaCare’s enhanced funding for Medicaid expansion will not last forever.”
David Abbey said there is “no doubt” that New Mexico’s Medicaid spending will “be the driver of future budget negotiations” in the state. That means other parts of the budget, things the state’s citizens depend upon, will likely be cut.
“Other parts of the budget are going to have to shrink,” he said. “If the Medicaid share is growing faster, something else has to grow more slowly. Public schools are a priority, public safety is a priority, and higher ed’s share has gone down 2 or 3 percent over a decade, so it’s a lot to be concerned about.”
New Mexico is already one of the country’s poorest states and these added costs are going to take their toll on the state’s budget.
In fact, the New Mexico Human Services Department estimates that, “total general fund dollars needed for the Medicaid program by the 2020 fiscal year are estimated to be $1.1 billion.” But that is based on their expectation that only 895,000 people will be on the Medicaid rolls. And that doesn’t account for likely federal reimbursement reductions.
The Land of Enchantment is likely to face a budgetary burden much higher than that $1.1 billion they are currently projecting.
It’s a shame that New Mexicans will have to bear the brunt of those skyrocketing costs in the coming decades, all because legislators chose to embrace the false promise of “free federal money” that came with ObamaCare’s Medicaid expansion.