SANTA FE – The New Mexico Health Care Authority is requesting $2.2 billion in state funding for Fiscal Year 2026, which will leverage an additional $11 billion in federal funds and support critical investments that are improving the health and well-being of more than one million New Mexicans. 

The HCA FY26 budget request aims to optimize federal funding and builds on the foundational work initiated since the agency launch on July 1, 2024. As a result, 74 % of the agency’s budget is financed by federal funds, meaning that for every $1 in state funding, the HCA leverages an average $2.89 in federal support. Additionally, 98.8% of the budget request is dedicated to existing programs, with 1.2% allocated for new programs. 

“More than half of New Mexicans rely on the Health Care Authority for basic services like food, health care, and child support,” said Kari Armijo, Health Care Authority (HCA) Cabinet Secretary. “With the legislature’s support, the FY26 budget request will leverage federal funding to complete the work we’ve started, maintaining vital programs and benefits and improving the quality of life for all New Mexicans—especially those in rural and underserved communities.” 

The FY26 budget request is focused on three main priorities: 

1. Ensuring access to health care: 

• Maintain Medicaid reimbursement rate increases for primary care, maternal/child health, and behavioral health services. 
• Request additional increases in Medicaid rates to improve services for older adults, individuals with disabilities, and behavioral health, while attracting and retaining providers statewide. 
• Fully fund Medicaid benefits, including medical respite for the homeless, food as medicine for high-risk pregnant women, and services for people exiting incarceration. 
• Support for Health Care Affordability programs to prevent premium hikes for BeWell NM enrollees, offer discounts for small businesses, and incentivize lower-deductible plans to reduce out-of-pocket costs. 
• Strengthen the long-term viability of State Employee Health Benefits, covering 55,586 New Mexicans.  

2. Providing greater protection and reducing risk for vulnerable New Mexicans: 

• Adequately funding the infrastructure and staffing of the Developmental Disabilities Supports Division to ensure adequate oversight of care and support a better quality of life for individuals with disabilities. 
• Funding for safety upgrades required for state licensure at boarding homes for lower-income adults with mental illness. 
• Fulfilling obligations under the Kevin S Settlement by using data-driven tools to improve child protective and behavioral health services.  
• Making required improvements to incident and case management, and data reporting systems at the Division of Health Improvement. 

3. Investing in New Mexico’s Public Servants: 

• Addressing salary inequities across the HCA to improve recruitment and retention. 
• Investing in staffing for the Medicaid program to ensure adequate oversight of the managed care organizations and ensure program performance.  
• Support Income Support Division caseworkers by ensuring adequate staffing to ensure that New Mexicans receive timely and accurate benefit determinations. 

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