New Mexico's amazing emergency ACA policies take it ANOTHER step further...

Back in October, I noted that the New Mexico Insurance Superintendent--in the midst of dropping some very bad news about the upcoming 36% average premium increases for New Mexico ACA policies--included an extremely important caveat:

While it appears that Congress will allow enhanced federal Premium Tax Credits to expire, New Mexico’s Health Care Affordability Fund (HCAF) will cover the loss of the enhanced premium tax credits for households with income under 400% of the Federal Poverty Level (or $128,600 for a family of four), providing up to $68 million in premium relief for working families who enroll in coverage through BeWell in 2026. Federal and state premium assistance will continue to reduce the impact of the rate increases.

What this means, in short, is that New Mexico has pladged to cancel out all of the federal tax credits being lost due to the enhanced formula expiring for all enrollees who earn less than 400% FPL...which amounts to around 85% of all current enrollees.

THIS. IS. HUGE.

Now, this would still leave perhaps ~6,300 enrollees who earn more than 400% FPL (plus several thousand off-exchange enrollees who will be hit with the full 36% avg. rate. hikes), but it was still a massive announcement.

But wait, there was more!

As I noted at the time, New Mexico has their own supplemental subsidy program which provides additional savings to ACA enrollees on top of the federal tax credits. At first I assumed that most of the funding to backfill the lost federal assistance would come from scrapping their "Turquoise Plan" progam. HOWEVER, it turns out that I was wrong:

According to this NM Health Care Authority 2026 manual, the state somehow has enough funding to backfill all of the lost federal subsidies up to 400% FPL without eliminating the Turquoise Plan assistance, which is awesome!

But there was even more:

...A Senate committee Thursday morning agreed on a bipartisan vote to advance HB2, intended to protect about 6,300 New Mexicans from huge health care premium increases if federal tax credits expire as scheduled later this year.

...Accompanying the legislation the committee approved Thursday is a $17.3 million appropriation into the Health Care Affordability Fund, which the HCA oversees, to cover the premiums for policyholders whose income is 400% of more of the federal poverty line. The Legislature earlier this year approved funding to cover the tax credits for those who make under that threshold.

Sure enough, the bill passed the NM Senate as well and was signed into law by Gov. Lujan-Grisham.

This means that ALL NEW MEXICO ACA EXCHANGE ENROLLEES WILL BE PROTECTED FROM THE EXPIRING FEDERAL TAX CREDITS.

This has since been confirmed by this 2026 Procedures Manual addendum, which states:

...During the 2025 regular legislative session, the New Mexico State Legislature appropriated HCAF funds to HCA to ensure that if these enhanced subsidies expire, eligible consumers with income under 400% of the Federal Poverty Level (FPL) would be protected from significant premium increases.

...On October 3, 2025, Governor Michelle Lujan Grisham signed House Bill 2, giving HCA the authority to extend financial assistance to eligible individuals with income above 400% of the FPL. $17.3 million was appropriated from the HCAF for this purpose through House Bill 1. In an emergency rule, the HCA established the regulatory framework to prevent individuals with income above 400% of the FPL from facing exorbitant premium increases that could lead to loss of coverage for thousands of New Mexicans.

...The Marketplace Affordability Program for Middle Income Households addresses recent federal changes that impact coverage affordability for thousands of New Mexicans. The Program provides eligible individuals with income above 400% of the FPL state-funded premium assistance that caps the cost of the benchmark plan at 8.5% of household income. This Program only applies to plans sold on BeWell’s individual market platform and is not available to consumers who enroll in coverage off-Marketplace.

The addendum even addresses QSEHRA enrollment rules (if you don't know what that is, don't worry about it, but here's an explainer):

Health Reimbursement Accounts

Qualified Small Employer Health Reimbursement Account (QSEHRA) payments reduce the NMPA amount commensurate with the QSEHRA contribution amount down to a consumer responsibility premium of $0. For example, consider a consumer with a $100 gross premium who qualifies for a $80 NMPA payment, leaving a $20 net premium. If this individual received a $60 QSEHRA payment, the NMPA will adjust to $20 since the $60 HRA payment negates most of the NMPA amount. In this situation, the NMPA amount will be reduced by $20 and the consumer will owe $20 to account for the remainder of the individual’s premium payment. Consumers who accept an Individual Coverage Health Reimbursement Account (ICHRA) will not be eligible for NMPA.

Note: The QSEHRA and NMPA eligibility is calculated in the BeWell system and will not directly impact carrier billing.

OK, so now we've addressed New Mexico ACA enrollees who earn less than 400% FPL or more than 400% FPL, so we've covered all the bases, right?

Unfortunately, no: There are other populations of Americans who are also about to be screwed out of ACA tax credit eligibility, and the enhanced tax credits expiring has nothing to do with this. There's several categories, but I'm going to focus on one of them. Via the Commonwealth Fund:

To enroll in Medicaid or the Children’s Health Insurance Program (CHIP), many immigrants must wait five years once obtaining qualified noncitizen status. States may waive the five-year waiting period for children and pregnant people. As of January 2025, 38 states waive the waiting period for lawfully present immigrant children, and 32 states waive it for lawfully present pregnant immigrants.

Immigrants who are lawfully present can buy in to Medicare once they turn 65 and have lived in the U.S. legally for at least five years. And those age 65 and older who have paid payroll taxes for 10 years can qualify for Medicare without paying a Part A premium.

...How do H.R. 1 and the recent marketplace final rule change coverage for immigrants in the marketplace?

The ACA allowed lawfully present immigrants in the five-year waiting period for Medicaid to receive financial help in the form of premium tax credits to buy marketplace plans. Beginning in January 2026, H.R. 1 prohibits lawfully present immigrants with income below the federal poverty level who do not qualify for Medicaid due to immigration status from receiving this financial assistance.

The final HHS marketplace rule, which took effect in August 2025, reversed the Biden administration’s definition of lawfully present immigrant: it now excludes DACA recipients from financial assistance for ACA marketplace coverage and Basic Health Program coverage. Broader restrictions will take effect in January 2027, when H.R. 1 changes the definition of “eligible alien.” Starting then, only lawful permanent residents, certain Cuban and Haitian immigrants, and COFA migrants lawfully residing in the U.S. will be eligible for financial help in purchasing a marketplace plan.

This revised definition also extends to people in employer plans. That means employers are not required under the ACA employer mandate to offer minimum essential coverage to lawfully present immigrants not covered by the new definition.

There's a whole lot of awful in the snippet above (and I cut out a few more paragraphs of bad news), but the main point is that starting January 1st, 2026, lawfully-present immigrants who have been in the U.S. for less than 5 years will no longer be eligible for ANY federal ACA tax credits if their income is below 100% FPL.

Since this population isn't eligible for Medicaid either, that means they're effectively screwed, since there's no way anyone who earns less than the poverty level can afford to pay full price. This will add them to the ~1.4 million Americans already stuck in the "Medicaid Gap" across 9 of the 10 non-expansion states.

How many people are we talking about here? Well, according to the 2025 OEP Public Use Files, around 548,000 current ACA exchange enrollees earn less than 100% FPL (roughly 2.3% of the total). Not all of them are part of the population described above (documented immigrants here less than 5 years), but most of them should be.

Meanwhile, Andrew Sprung pointe me towards this letter from the Congressional Budget Office (CBO) to Sen. Ron Wyden & Rep. Frank Pallone last June breaking out their estimates of healthcare coverage losses due to H.R.1, the so-called "Big Beautiful Bill Act," which included this snippet:

Under current law, people whose income at the time of application for insurance coverage is below 100 percent of the FPL are ineligible for the premium tax credit, with one area of exception. Immigrants who are deemed by regulation to be lawfully present, but whose income is below 100 percent of the FPL, may receive a premium tax credit if they do not have access to Medicaid because of their immigration status; they must also meet other eligibility criteria.

Section 112102 would remove eligibility for the premium tax credit for people whose income is below 100 percent of the FPL. CBO estimates that enacting section 112102 would increase the number of people without insurance by 300,000 in 2034.

Now, 300K becoming uninsured isn't quite the same thing as 548,000 being enrolled at the moment, but it's safe to assume the total number is somewhere in between the two nationally.

In New Mexico specifically, there's around 1,200 exchange enrollees who earn less than 100% FPL; again, it's safe to assume that most of them are recent documented immigrants not eligible for Medicaid.

Well, it turns out that the Land of Enchantment even has them covered as well! From another addendum to the state's Health Insurance Marketplace Affordability Program Manual:

This Addendum to the 2026 Policy and Procedures Manual is issued pursuant to NMSA 1978, Section 59A-23F-11, which established the Health Care Affordability Fund (HCAF) to “reduce health care premiums and cost sharing for New Mexico residents who purchase health care coverage on the New Mexico health insurance exchange” and to “provide resources for planning, design and implementation of health care coverage initiatives for uninsured New Mexico residents.”

The HCAF is administered by the New Mexico Health Care Authority (HCA). The statute also authorizes HCAF to be used to “maintain coverage through the New Mexico health insurance exchange” if the Affordable Care Act is repealed, “in full or in part[,] . . . provided that coverage is prioritized for New Mexico residents with incomes below two hundred percent of the federal poverty level.” The HCA filed emergency rules that include provisions governing a program to provide premium and out-of-pocket assistance to individuals impacted by recent federal changes.

Public Law 119-21 was signed into law on July 4, 2025, and makes several significant changes to eligibility for federal health coverage programs. The most immediate eligibility change that affects individuals currently enrolled in HCA’s Marketplace Affordability Program (MAP) is Section 71302. This section disallows many lawfully present non-citizens under 100% FPL who are subject to the ACA's five year waiting period for Medicaid from receiving the federal Premium Tax Credit (PTC) during this period. This would have serious negative consequences on the health and well-being of low-income New Mexicans who do not have access to other forms of affordable coverage.

To address the impact of Public Law 119-21, the HCA has established the Puente Health Program (the Program). This Addendum sets forth the parameters for the Puente Health Program for individuals on BeWell, New Mexico’s Health Insurance Marketplace (the Marketplace), with income under 100% of the Federal Poverty Level (FPL) and will lose eligibility for the federal PTC beginning Jan. 1, 2026, due to the recent federal changes. This Addendum describes the requirements for the Program in Plan Year 2026 (PY26), administrative policy and procedure requirements for financial support, and the reporting and payment timeline.

That's right: New Mexico is even providing financial assistance to this group of residents who would otherwise be thrown under the bus:

To qualify for the Program, consumers must:

• 1) Be eligible to purchase a Qualified Health Plan (QHP) on the Marketplace;
• 2) Be a lawfully present non-citizen who has been determined ineligible for the federal PTC under Section 71302 of Public Law 119-21; and
• 3) Have a household income at or below 100% of the FPL.

It then goes on to describe the specific formula:

The affordability criteria for premium assistance under the Puente Health Program is the same as the HCA’s MAP premium assistance program for individuals under 200% FPL.

1. State-funded premium assistance can be used to purchase a plan of any metal tier other than Catastrophic. Note: Platinum and Catastrophic plans are not currently offered on the Marketplace.

2. The premium assistance amount for PY26 is calculated using the second lowest cost Silver plan (SLCSP).

3. Consumers under 100% of the FPL do not have a consumer responsibility for the SLCSP premium.

4. Consumers are not required to reconcile state premium assistance payments at the end of the year.

For PY26, the SLCSP in the consumer’s rating area is the benchmark for calculating the premium assistance under the Program. For eligible individuals, the premium amount used to calculate the premium assistance will be 10% above the price of the SLCSP.

This is truly amazing, especially considering that New Mexico isn't exactly a wealthy state. Everyone involved in these policies should be given high praise.