Health Care Authority warns SNAP delays and Medicaid enrollment losses could strain state budgets

The Health Care Authority told the Legislative Finance Committee on a morning briefing that a continuing federal shutdown could delay November SNAP benefit issuances to New Mexico, affecting an estimated $90 million a month in benefits and about 1,700 retailers across the state.

Cabinet Secretary Carrie Armijo said the U.S. Department of Agriculture notified states that SNAP files for November were not funded as of last Friday, and that the agency is preparing contingency plans with food banks and sister agencies to expedite state assistance should federal funding remain interrupted. "If the shutdown persists, those benefits will be delayed," Armijo said, urging members to expect constituent calls about access to food.

The session placed SNAP and Medicaid changes in the broader federal funding context. LFC staff and HCA officials emphasized that mandatory programs such as Social Security and much of Medicaid are structured differently from discretionary programs and are less likely to stop immediately, but administrative interruptions and delayed federal reimbursements can create cash-flow problems for the state if a shutdown extends beyond about 30 days.

On Medicaid, Armijo and agency staff reviewed recent enrollment trends and the expected effects of federal reconciliation changes and state policy. New Mexico's Medicaid enrollment peak exceeded 1,000,000 during the COVID public-health emergency; it has since fallen and HCA said the state has already lost roughly 140,000 enrollees through unwinding. Armijo said the agency's current projection is that another 90,000 to 100,000 people are likely to drop off as work requirements and more frequent eligibility redeterminations are implemented, with additional smaller losses tied to administrative churn. "The total losses are going to be about a 100 to a 120,000 additional New Mexicans overall," she said.

Committee members pressed for clarity about whether elderly U.S. citizens on fixed incomes should worry about losing coverage; HCA responded the short answer is no but cautioned appointment and access delays are possible because of workforce shortages. On audit timing, Armijo said the agency's annual audit may be delayed because a required federal compliance statement has not been issued during the shutdown.

The HCA also outlined its FY27 budget: a roughly $15 billion base (85% federal funds), a general fund base request of about $2.2 billion and targeted expansion requests, including funds to backfill federal changes in marketplace subsidies and SNAP. Armijo highlighted the healthcare affordability fund request (~$205.2 million) to protect roughly 58,000 marketplace enrollees under 400% of the federal poverty level from premium spikes, and she described efforts to use that fund to protect certain lawfully present immigrants who would otherwise lose coverage under federal changes.

On quality and licensing, the agency said it will pause routine federal CMS surveys as directed but will continue to investigate serious harm allegations. Armijo drew attention to licensing gaps for boarding homes: the agency estimates about 100 unlicensed boarding homes statewide and described a glide path and nonrecurring funding requests to help those operators meet safety and accessibility standards rather than forcing closures that could produce homelessness.

The committee did not take formal votes. Members directed HCA and Legislative Finance staff to provide further details on SNAP replacement options, Medicaid enrollment projections, audit timing and the rural health transformation grant guidance for upcoming hearings.

The committee plans follow-up hearings with HCA on Medicaid and related divisions in December.