Photo of UNM Hospital by Don Gato

Photo of UNM Hospital by Don Gato

New Mexico’s rising unemployment may come with a silver lining.

The state’s unemployment rate rose to 7.5 percent in August. Reflecting job losses due to a sour economy, that figure, once finalized, also could trigger extra money, unlocking up to $10 million in additional federal stimulus funding for Medicaid in New Mexico, said Betina Gonzales McCracken, a spokeswoman for the state Human Services Department.

If the August unemployment figures are correct, that means New Mexico’s unemployment rate, which was 7 percent in July and 6.8 percent in June, has averaged 7 percent over the past three months; that average could qualify the state for additional funding from the federal government.

The new money, if it materializes, couldn’t come at a better time for Medicaid, the government’s low-income health insurance program.

Medicaid in New Mexico faces a $40 million shortfall this year that could grow to $60 million in coming months as more New Mexicans enroll because of the recession, Human Services Secretary Pam Hyde told state lawmakers this month.

On the horizon looms a much bigger problem – a potential $300 million shortfall that could come in January 2011, when federal stimulus money is expected to dry up.

And that has led state legislators to look for new ways to cut costs, including eliminating many, if not all, optional Medicaid services.

The implications of such deep cuts are potentially dire for New Mexico, where one in four residents gets health coverage in whole or part through some form of public assistance. Medicaid covers dozens of services in New Mexico, including hospital stays, physician services, dental and vision benefits, physical therapy and podiatry, according to the state Human Services Department.

So any extra Medicaid funding at a time like this is good news, although Hyde acknowledged Sept. 16 during a legislative hearing in Rio Rancho the bittersweet nature of hoping for additional Medicaid funding because of an increase in unemployment.

But before any of that happens, the August unemployment figure must be finalized, McCracken wrote in an e-mail. Then “CMS (The Centers for Medicare and Medicaid Services) has to tell us that we do indeed qualify for the additional funding,” McCracken wrote. “The additional [stimulus] funding generated from this is estimated at $10 million.”