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Committee advances plan to create Medicaid trust fund funded by excess reversions
Summary
Senate Bill 88, amended to fund a Medicaid trust from annual reversions above a $110 million threshold, received committee support. Sponsors said the mechanism captures unanticipated year-end balances to shore up state Medicaid funding in case of federal reductions.
The Appropriations & Finance Committee recommended Senate Bill 88, as amended, to create a Medicaid trust fund that would receive transfers when the state's annual reversions exceed a $110 million threshold.
Senate sponsors and staff described the measure as a mechanism to capture year-end balances that are not included in the consensus revenue estimate (CREG). Adrian Avila, chief of staff for Senate Finance (staff witness), said the amendment adopted by the committee removes a prior floor amendment that relied on a volatile revenue source and instead captures reversions above $110 million, a figure tied to the revenue estimate.
The bill, as amended, creates a state-supported Medicaid fund and directs transfers when reversions to the general fund exceed the $110 million threshold in a fiscal year. Staff described historical reversions from fiscal 2017 through 2024 of roughly $1.8 billion total and said applying this mechanism over that period would have built the trust to an estimated amount in the hundreds of millions.
Witnesses from health advocacy groups, medical societies and the business community supported the bill. Christina Fisher of Think New Mexico and Lynn Christiansen of AARP said a dedicated fund would help stabilize Medicaid reimbursement and keep providers in the state. Several business and health-care witnesses urged support to avoid future disruptions if federal Medicaid funding is reduced.
Committee members asked technical questions about which balances and accounts the measure would capture and whether the fund would be seeded at passage. Staff said the bill contains no initial appropriation; the mechanism depends on future reversions. Members also asked whether transfers would count as part of statutory reserves; staff said the trust would behave like a flexible reserve but would not be included in the official reserves calculation.
The committee adopted a committee amendment that narrowed funding sources to reversions above the $110 million threshold and then moved the bill. A due-pass motion passed in committee; the transcript records members in opposition but no roll-call tally in the committee record presented.
