Medicaid cuts could hurt hospitals, families

Noah RaessFor the Las Cruces Bulletin

The New Mexico Hospital Association has warned about rural hospitals closing due to H. R. 1, commonly referred to as “the One Big Beautiful Bill,” which was signed into law by Pres. Trump on the Fourth of July.

The bill has provisions for large cuts in Medicaid funding as well as reductions in how New Mexico distributes money for hospitals, Julie Ruetten, senior director of government affairs at the New Mexico Hospital Association, said. The federal funding is distributed to New Mexico hospitals through the New Mexico Health Care Authority. This program works by collecting taxes from all hospitals in the state, pooling the funds where federal Medicaid dollars will then match those funds. This money then gets redistributed back to the hospitals where rural and struggling hospitals get the most funding.

Ruetten said that this reduction in the tax cap that funds the program will hurt rural hospitals the most.

“What that reduction in the tax cap will do is reduce the total size of that program by about $566 million so over a third of the program,” Ruetten said. “What this means is that there’s less money to distribute in additional supplemental payments to the state’s hospitals.”

In addition to this change, Ruetten also explained that the bill will put a cap on how much the state can pay a hospital for a Medicaid patient. The reduction in this cap will then cause commercial insurers to “pick up the slack.”

“Between the tax being reduced and the cap on distributions, really what the outcome of that will be, it’s really going to shrink the impact of the supplemental payments for the state hospitals,” Ruetten said.

Payments through the HDAA program first went out this March.

According to a national nonprofit called the Center for Healthcare Quality and Payment Reform, nine hospitals in New Mexico are at risk of closing with four being at immediate risk. Ruetten said that even if a hospital does not close, residents could still feel the effects of the closure since the hospital system is “like a spiders web.”

“Our rural hospitals are dependent on the hospitals right there in Las Cruces and in Albuquerque to take higher acuity and more long-term and intensive need patients,” Ruetten said. “Urban hospitals are reliant on the rural hospitals to take those lower acuity.”

Healthcare attorney with the New Mexico Center on Law and Poverty Arika Sanchez said Medicaid is “the backbone of our healthcare system” and that “tens of thousands of people” will lose their Medicaid coverage with the new bill.

“In a lot of cases that means that people just don’t go to the doctor. They definitely are not getting preventative care, and they are kind of trying to put off addressing health needs,” Sanchez said.

With just under 62% of children on Medicaid in Doña Ana county in 2023, Sanchez said that it is families who often benefit the most from Medicaid as major questions are easily answered.

“’How sick is my child? Should I take them to a doctor? Should we wait? Will I be able to afford the medicine?’ That’s one demographic that it is just a huge support for,” Sanchez said.

The changes to Medicaid will be phased in over the next couple of years.