Photo by David Mason

Photo by David Mason

In a preview of potential cost-cutting measures to come, the state of New Mexico has stopped accepting individuals into a program that helps uninsured New Mexicans pay for health coverage.

The State Coverage Insurance program (SCI) helps nearly 50,000 low-income individuals and small employers statewide afford health insurance by footing part of the cost of monthly premiums.

The state stopped accepting individuals into the program earlier this month. The decision was made to save a projected $16 million as the state Human Services Department attempts to trim spending to prepare for a possible $300 million shortfall in next year’s state Medicaid budget, state officials said.

The state’s decision does not mean that already-enrolled individuals will lose coverage, said Carolyn Ingram, the director of HSD’s Medical Assistance Division. And the state is continuing to accept applications from employers with 50 or fewer employees. Currently 1,200 small employers across New Mexico participate in SCI, resulting in health coverage for 2,000 New Mexicans, said Betina Gonzales McCracken, a state Human Services Department spokeswoman.

“We have not started a waiting list for groups because we still want to encourage businesses to help with premium assistance,” Ingram said.

While small employers can still participate, individual applicants, by far, represent the majority of the program’s roughly 49,000 participants, or about 47,000 people, McCracken said.

Started in recent years, the SCI program helps individuals aged 19 to 64 who earn up to 200 percent of the federal poverty level — $44,000 for a family for four – afford health insurance.

Closing enrollment for individuals in SCI is one of many cost-cutting measures the state’s human services agency is considering because of next year’s projected shortfall in Medicaid funding.

As a result, officials are eyeing many previously off-the-table scenarios, including eliminating many, if not all, optional Medicaid services, because of the severity of the situation.

The projected $300 million shortfall in Medicaid funding next year is due in part to the end of federal stimulus dollars – one-time revenue –for Medicaid. It’s projected that New Mexico would need to find more than $140 million to replace federal stimulus dollars to pay for Medicaid in the last half of fiscal year 2011 — January through June 2011 — if New Mexico wants to keep services at their current level, according to the state Human Services Department.

In effect, New Mexico will face a “revenue cliff.”

There has been talk at the federal level of helping out New Mexico and other states, which confront a similar situation. But it’s unclear whether that help will materialize and, if so, in what form.