President Trump signed the “Big Beautiful Bill” (BBB) into law over the Fourth of July weekend, achieving his stated goal of enacting the legislation by July 4. The passage came despite narrow Republican majorities in Congress and strong opposition from Democrats.
New Mexico’s congressional delegation and Governor Michelle Lujan Grisham all opposed the bill. Lujan Grisham described it as “an abomination.” Representative Gabe Vasquez said, “It’s gonna devastate New Mexico’s health care system.” Reports have suggested that changes to Medicaid spending could result in hospital closures across the state.
Some Republicans also voted against the BBB. Senator Rand Paul and Representative Thomas Massie of Kentucky cited concerns about insufficient reductions in federal spending and a potential increase in national debt.
The bill does not cut Medicaid outright but slows its rate of growth. Health care expert Michael Cannon explained that annual federal Medicaid spending growth will drop from 4.5 percent to 2.7 percent under the new law, achieved by removing certain provider tax provisions previously criticized by both Democratic and Republican administrations. The BBB also adds work, education, or job training requirements for Medicaid and SNAP recipients.
New Mexico policymakers have options if they wish to maintain current benefit levels. The state has $61 billion in savings accounts, including a $2 billion Medicaid Trust Fund created last year to help offset possible federal cuts.
Paul Gessing, president of the Rio Grande Foundation, wrote that while his organization opposed this trust fund—arguing instead for returning savings to taxpayers—the Legislature can use these resources if it chooses: “But, if the Legislature and Gov. want to restore federal spending cuts, they can certainly afford to do it.”
Gessing argued that federal programs like Medicaid are not mandated by the Constitution and criticized their incentive structures: “Medicaid’s incentive structure is all wrong. It incentivizes states to game the system...and disincentivizes recipients from seeking gainful employment and higher pay (lest they lose their benefits).”
He also referenced a recent report stating that New Mexico’s health outcomes have not improved despite increased spending on programs such as Medicaid.
Gessing concluded that with available state resources, New Mexico could continue or even enhance its existing health care programs: “Whatever the future holds for Medicaid and health care spending in New Mexico more broadly, the State has the resources to either continue existing programs or even improve upon the current situation.”
The Rio Grande Foundation describes itself as an independent organization focused on promoting economic freedom and limited government principles in New Mexico.
