It’s high time New Mexico’s Medicaid Program is brought under control

President Trump and his Administration are taking a hatchet to unnecessary government spending in Washington. This effort was clearly going to have an impact on New Mexico which (according to USA Facts) is the 2nd-most federally dependent state in the nation. To that end, Gov. Lujan Grisham has ALREADY stated that she plans to call a special session to address federal cuts, particularly to the Medicaid program.

The President is 100% correct to target Medicaid for cuts. For example, New Mexico plans to increase Medicaid spending in the FY 2026 budget alone by “$3.3 billion to $15.5 billion, a 27% jump” according to this recent AP article. The federal government picks up approximately 72% of New Mexico’s Medicaid budget while the State’s share is about 28%.

This federal subsidy has led to New Mexico politicians to “scam” Medicaid for many years. For example, in 2024 New Mexico adopted the “Health Care Delivery and Access Act.” Under the law, “The state law will assess a tax on hospitals — a larger tax on big hospitals — pool it, leverage those funds for a federal Medicaid match, then bring about $1.5 billion in total funding back to New Mexico to provide sustainable reimbursement to our state’s hospitals.” In other words, by manipulating the Medicaid formula the State of New Mexico will fleece taxpayers in the other 49 states out of $1.5 billion.

It is no surprise given New Mexico’s political inclinations that the State would have a positively huge Medicaid population. Indeed, according to the Legislative Finance Committee 47% of the State’s population is on Medicaid. Other analyses place New Mexico as the highest Medicaid receiving state in the nation. But some in the Legislature would like to expand Medicaid eligibility in New Mexico even more. The health care benefits of massive Medicaid spending are

It is time for the Trump Administration to prevent states like New Mexico from misusing the Medicaid system to take advantage of taxpayers in other states. If that means New Mexico using a portion of its massive oil and gas budget surpluses to pay for Medicaid at least New Mexico won’t be fleecing taxpayers in other states (as badly).

Data for the following chart can be found here and here and in the AP article mentioned above (here). The $15.5 billion figure for FY 2026 is an estimate taken from the AP article.