Jan. 27--Medicaid pays for about seven in 10 of all births in New Mexico.

Of the 27,795 babies born in New Mexico in 2010, 19,863 births -- or 71 percent -- were paid for by the state and federally funded health insurance program for the poor, according to a recent analysis by the state Legislative Finance Committee.

"Being born on Medicaid is related to poverty," said Peter Winograd, director of the Center for Education Policy Research at the University of New Mexico.

And the large number of Medicaid births reflects a stew of problems in New Mexico, such as high rates of unemployment, drug use, school dropout and teen pregnancy, which remains the second highest in the nation, he said.

"I think it's a reflection of the demographic reality of New Mexico," Winograd said. "Think about an uneducated population continuing to grow and what does that do for our economic viability."

The high number of Medicaid births "is unbelievably shocking and it's a horrible indicator for the state of New Mexico," said Paul Silverman, a director of the Greater Albuquerque Chamber of Commerce.

The number indicates that a majority of New Mexico babies are born to mothers who lack the resources to give their children a good chance of success, Silverman said.

It also points to the need for a stronger economy that can provide New Mexicans with good jobs a nd hea lt h insurance.

"We are either going to spiral down, or we are going to spiral up," Silverman said. "We have to take the actions that are necessary to build a private sector and create a much more diversified economy based on the private sector."

522,000 enrolled

The state Human Services Department, which oversees Medicaid, pays premiums to Molina, Presbyterian and two other managed care organizations to provide health insurance for New Mexicans who qualify for Medicaid.

About one in four New Mexicans -- or 522,000 people -- are enrolled in the program.

More than half of those are children, thanks to the state's moregenerous eligibility requirements for children.

Medicaid covers 62 percent of New Mexico children 18 and younger; those eligible are in families with incomes up to 235 percent of the federal poverty level -- or $4,514 a month for a family of four, according to the HSD website.

The LFC report says 338,000 children are covered, with 125,000 being age 3 and younger.

Meanwhile, Medicaid covers pregnancy-related health care for women with family incomes up to 185 percent of the federal poverty level, or $3,554 a month for a family of four.

Under federal regulations, Medicaid is barred from covering illegal immigrants. But Medicaid will cover labor and delivery for babies born to immigrant mothers.

Health care advocates call Medicaid spending for pregnant mothers and newborns an investment in the health and future productivity of the state.

"Medicaid is a program that reflects our values that kids deserve a healthy start in life," said Michelle Welby, director of network management and operations for Molina Healthcare of New Mexico.

Spending for prenatal care and early childhood health will result in "better learners, a better workforce, healthier families and less costly interventions later in life," Welby said.

And the costs to cover prenatal care and young children are only a fraction of the state's total Medicaid spending.

The four health organizations that manage Medicaid for the state paid $298 million for prenatal care for mothers and medical care for children ages 3 and younger, including delivery costs, the LFC reported.

State officials project that Medicaid expenditures will climb $288 million next year to $4.06 billion in fiscal year 2014, which ends June 30, 2014.

That projection does not include money for expanding Medicaid to low-income adults under the Affordable Care Act, also known as Obamacare.

Welby and others note that the cost of insuring pregnant women and children is much lower than the cost of older participants.

"The most expensive care in Medicaid today is the long-term care for the elderly and the disabled," said Mary Eden, vice president for government programs for Presbyterian Healthcare Services.

LFC budget recommendations issued this month warn that longterm services for elderly New Mexicans have claimed an ever-growing share of Medicaid dollars.

Elderly New Mexicans, who comprise fewer than 8 percent of Medicaid enrollees this year, account for 24 percent of state Medicaid costs, the LFC noted.

Long-term care for the elderly will cost Medicaid a projected $989 million this year, up $191 million since 2010, and the average cost to Medicaid for long-term care for an elderly client is $21,468 this year, the LFC reported.

By comparison, the cost of providing health care to children, pregnant mothers and other "physical health clients" averaged $3,156 this year, the LFC said.

Little choice

State Sen. Sue Wilson Beffort, R-Sandia Park, said New Mexico has little choice but to leverage federal Medicaid dollars to improve the health of pregnant women and children.

"I would rather these babies be born healthy and give them the best chance of making a success," she said.

Medicaid is one element in a package of reforms enacted in recent years, including full-day kindergarten and pre-kindergarten programs, intended to help children achieve more independence later in life, she said.

"My goal is to have less Medicaid births -- to get these young girls to stay in school, to understand that they can have a different life than the way they were brought up themselves," Beffort said.

That's a challenge in New Mexico, with a teen birth rate nearly 60 percent higher than the national average. For every 1,000 teen girls in New Mexico, there is an average of 53 live births a year, compared to the national average of 34 births.

Many of those births are Medicaid births. For the three-year period of 2009-11, Medicaid managed care paid for 4,417 births to teenage mothers, the LFC reported.

The state's poorest areas have the highest teen birth rates.

The LFC's program evaluation unit wrote the report, called "Improving Outcomes for Pregnant Women and Infants Through Medicaid," as a part of a work plan approved by LFC members to examine the effectiveness of state agencies and programs.

While Silverman and others are shocked by the high figure of 70 percent, Medicaid coverage for pregnant women remains a good investment for the state because of the strong link between prenatal care and healthy births, said Steve McKernan, CEO of University of New Mexico Hospital.

"Women who have coverage are more likely to access care," he said. "For women that access care frequently during their pregnancies, they get better outcomes."

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