As Americans nationwide face rising health insurance costs, New Mexicans may be in a better position.
The U.S. House of Representatives recently passed a health care bill that does not extend Affordable Care Act (ACA) tax credits set to expire at the end of this year. Without these credits, many Americans could see their health insurance premiums more than double in 2026. Democratic leaders warn that any federal fixes in January would come too late.
“January 1, it expires. Once that happens, millions will be without healthcare. There’ll be no ACA credits. Tens of millions more will have since changed their policies that are much worse for them, with higher deductibles and higher co-pays,” said Sen. Chuck Schumer, D-NY.
Even without the expiring federal credits, ACA insurance premiums were expected to rise by nearly 20% next year. But New Mexico has been preparing for this increase.
“New Mexico is the only state ready to weather this storm,” said Colin Baillio, director of health care innovations at the New Mexico Health Care Authority (HCA).
The state’s Health Care Affordability Fund, established in 2021, is designed to lower costs for New Mexicans with ACA plans. Essentially, it acts as a state-level supplement to federal subsidies.
Currently, the fund holds over $100 million. In 2026, that money will help about 68,000 New Mexicans who rely on federal tax credits keep their health insurance affordable.
“We’re fully backfilling the loss of subsidies from the federal government for the time being,” Baillio said.
However, HCA leaders caution that this solution is temporary. They plan to request an additional $130 million from state lawmakers to maintain support in 2027.
“In the long term, this will create funding challenges, and the Legislature will face some tough decisions,” Baillio added.
New Mexico Speaker of the House Javier Martinez emphasized that federal support is still essential.
“These are federal issues that the federal government needs to address because no state can sustain this forever,” Martinez said. He added a note of optimism for residents: “New Mexicans should feel hopeful this holiday season. Our state government is working for them, and families won’t be paying an arm and a leg for health insurance.”
The extra state subsidies are available only to those who buy coverage through New Mexico’s marketplace, BeWellNM. HCA also offers out-of-pocket assistance programs to help with costs outside standard health insurance plans.
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