The deputy secretary of the Health Care Authority told a legislative committee that changes in federal law and federal administration policy are likely to shrink Medicaid and SNAP benefits in New Mexico and to increase pressure on rural hospitals and grocery-valuing businesses.

The deputy secretary said the state could lose about $8.5 billion in federal Medicaid revenue over about a decade and projected that roughly 88,000 New Mexicans could lose Medicaid coverage. “Medicaid is the largest payer of health care in New Mexico currently,” the deputy secretary said, adding that changes to reimbursement and enrollment rules could lead to higher uninsured rates and higher hospital acuity.

Why it matters: The Health Care Authority presentation framed the federal changes as a system shock for a state with unusually high social vulnerability, heavy reliance on Medicaid and a large SNAP economy. Committee members pressed staff for the modeling and timelines behind the estimates and emphasized the possible consequences for school meals, hospital stability and rural access.

The authority spotlighted several specific federal policy shifts it expects to implement: community or work requirements for Medicaid recipients, twice-yearly eligibility redeterminations rather than annual renewals, elimination of eligibility for some lawful-resident groups and reduced provider payments. The deputy secretary said the state’s hospital delivery-support law — enacted with prior legislative help — may not be sustainable in the same form by calendar year 2028 if federal rules and guidance change. “In calendar year 2028, unless federal guidance changes or the law changes, we will not be able to continue the Health Care Delivery and Access Act in the same way we’re doing it today,” the deputy secretary said.

The deputy secretary also outlined estimates and early projections the authority is using: a projected loss of about $8.5 billion in federal Medicaid revenue over roughly a decade; an estimate that 88,000 New Mexicans could lose Medicaid coverage and that about 42,000 could face patient cost-sharing; an early estimate that six to eight rural hospitals could close in the next 18 to 24 months if reimbursement and administrative policy changes materialize; and a projection that SNAP changes could reduce monthly benefits for nearly every recipient, subject 55,000 people to new work requirements and remove eligibility for roughly 20,000 people. The authority said the state’s health-care-affordability fund for marketplace premium assistance has reduced marketplace losses; staff said that without the fund as many as 23,038 people might have lost exchange coverage and that the authority expects a smaller number at risk after the fund’s support (the presentation included a garbled figure; the precise projection in that slide was not specified clearly).

Committee members asked about the sources and methods behind those numbers. The deputy secretary said the authority’s analysis draws on recent federal unwinding experience and modeling and advised members that some federal administrative actions (for example, changes to permissive Medicaid reimbursement allowances) could be implemented before statutory effective dates. “We suspect that the feds may change their mind and may no longer grant us the ability to do that,” the deputy secretary said of enhanced reimbursement rates the state currently uses for primary-care and behavioral-health providers.

The authority emphasized the uneven geographic impact. More than 60% of New Mexico counties fall into the highest CDC Social Vulnerability Index quartile, the deputy secretary said, naming McKinley, Doña Ana and Bernalillo among the most vulnerable counties. SNAP purchases were described as a material part of the state economy; the deputy secretary estimated SNAP-supported retail activity sustains about 1,700 grocery stores, farmers markets and convenience stores.

Discussion, direction and next steps: Committee members asked for the authority’s underlying analyses and budget projections; staff agreed to share quarterly Medicaid budget projections prepared with legislative finance staff. Members also raised questions about the timing of SNAP reductions (staff said the authority was planning for an October 1, 2025 effective date for SNAP changes absent contrary federal guidance) and urged consideration of state responses for schools and children’s nutrition programs.

The deputy secretary repeatedly framed the presentation as a planning exercise: the authority urged legislators to consider the potential public-health and economic consequences and to work with state agencies on mitigation strategies.

Ending: The full packet presentation and the authority’s fiscal projections were offered to the committee; staff agreed to follow up with the legislative offices and legislative finance committee materials referenced during the briefing.