NM House approves fund to pay for expired federal health care tax credits

The New Mexico House of Representatives on Thursday quickly passed a bill that ensures the state will continue to have funding available to offset cuts to federal health care programs.

House Bill 4 increases distributions into the state's Healthcare Affordability Fund, which is generated through surcharges the state imposes on health insurance companies. House Democrats said the fund is necessary in order for the state to pay for expired health insurance premium tax credits and expected Medicaid cuts.

Late last year, federal Enhanced Premium Tax Credits on which about 65,000 New Mexicans rely on expired. The credits provide sizable reductions in health insurance premiums for those who purchase insurance on the BeWell exchange.

The "One Big Beautiful Bill Act" that President Donald Trump signed into law last year contains Medicaid cuts expected to affect up to 100,000 New Mexicans, according to a news release Thursday from New Mexico House Democrats.

The bill the House passed 48-19 would transfer $91 million into the fund by July 1, 2027, and then more than $162 million in the two fiscal years following. The fund currently has $200 million in it, according to a fiscal analysis.

"The Healthcare Affordability Fund has been our state's lifeline to keep insurance in reach for families on the private market. It's why enrollment is growing in New Mexico while it collapses elsewhere in the country," said House Majority Leader Reena Szczepanski, D-Santa Fe, in an emailed statement. "As the federal government pulls back its support for American healthcare, it's absolutely critical that we support this fund."

Earlier this week, the Health Care Authority reported that health insurance enrollment has increased 17% in New Mexico, which it attributed to the Health Care Affordability Fund, which it oversees. Nationwide, enrollment in state insurance marketplaces has dropped.

According to House Democrats, New Mexico is the only state in the country that fully funded the expiring tax credits.