Santa Fe, NM – The New Mexico Office of the Superintendent of Insurance (OSI) has approved 2026 rates for individual market Affordable Care Act (ACA) plans sold on and off BeWell, the New Mexico Health Insurance Marketplace, with an average increase of 35.7%. Today, 75,000 New Mexicans buy health insurance through BeWell and 88% of enrollees qualify for federal and state premium assistance.
However, there's an 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.
This actually came out a couple of weeks ago but ironically, I've been too swamped analyzing & posting 2026 rate filings for other states to get around to posting it here until now.
The enhanced federal subsidies provided by the Inflation Reduction Act (set to expire at the end of 2025);
Some states (but not most yet, unfortunately) fully embracing robust Premium Alignment w/maximized Silver Loading policies; and
About half the states which operate their own full ACA exchange offering supplemental financial subsidies to either reduce premiums, reduce cost sharing or both.
The last bullet includes California, Colorado, Connecticut, Maryland, Massachusetts, New Jersey, New Mexico, Vermont and Washington State. In addition, both Minnesota and New York have large numbers of enrollees in their respective Basic Health Plan programs (New York just expanded theirs), which may or may not be considered "state-based subsidies" depending on your perspective.
A few weeks ago I noted that, thanks to California Governor Gavin Newsom and the Democratically-controlled state legislature finally reaching a compromise agreement on how to allocate ~$330 million/year in revenue generated by the state's individual mandate penalty, around $83 million will be utilized to dramatically reduce out of pocket expenses for hundreds of thousands of ACA exchange enrollees.
The bottom line is that this funding was intended to go towards reducing health insurance premiums for ACA exchange enrollees via Covered California as supplemental subsidies to be added on top of federal ACA tax credits...but the passage of the American Rescue Plan and the subsequent Inflation Reduction Act kind of made that moot, since the federal subsidies were made more generous than what the state subsidies would have been anyway.
As a result, Gov. Newsom decided that the extra revenue should go into the general state fund, while Democrats on the state legislature wanted to redirect it to eliminate deductibles and other types of cost sharing for ACA enrollees instead. This led to an impasse for the past several months:
This post has a long intro, but please bear with me...
Back in 2018, after the then-Republican controlled Congress zeroed out the ACA's federal "individual mandate penalty" (officially the "shared responsibility penalty"), I posted both a video and slideshow explainer about what this penalty was and why it was included in the ACA in the first place.
The bill in question wasn't terribly complicated; it essentially just placed a new fee on health insurance carriers to finance a new fund which would in turn be used to reduce healthcare coverage costs for low- and middle-income New Mexicans. Furthermore, since some of the fees would be imposed on managed Medicaid programs which are mostly federally funded, it would have leveraged tens of millions of dollars in federal funding as opposed to all of the fees coming from state residents. Had it gone into effect, HB 278 was expected to generate around $125 million in revenue for the state to use to reduce premiums and cost sharing for enrollees.
