New Mexico is one of 28 states that expanded Medicaid coverage for impoverished adults as part of the implementation of Obamacare, resulting in more than 216,000 people joining the state’s Medicaid roster and pushing the total to nearly 800,000 enrollees.
Combined with a loss of federal funds used to pay for the expansion in 2016, the state will face a serious budget crunch, the Associated Press reports.
The federal government currently pays 100 percent of the cost of the expansion, but that percentage will decrease beginning in 2017 to 90 percent, resulting in New Mexico having to pay about $120 million of the expansion’s expenses. By 2020, more than 895,000 people could be on the rolls, including 257,000 who will be covered by the expansion. Based on current projections, total general fund dollars needed to cover the state’s Medicaid program by fiscal year 2020 will be $1.1 billion, including $268 million caused by the expansion.
David Abbey, director of the state’s Legislative Finance Committee, says other parts of the budget are going to have to shrink to accommodate the rapidly expanding Medicaid spending.