SANTA FE, NEW MEXICO — New Mexico is using state funds to prevent steep health insurance premium hikes after Congress allowed enhanced Affordable Care Act (ACA) tax credits to expire on Dec. 31, 2025.
These enhanced tax credits were introduced under the American Rescue Plan Act in 2021, which temporarily expanded eligibility and increased subsidy amounts—removing the income cap and significantly lowering out-of-pocket costs. They were further extended through 2025 by the Inflation Reduction Act. With Congress failing to agree on a bipartisan extension, the enhanced credits lapsed at the end of the year, and marketplace subsidies reverted to pre-2021 levels.
Analysts warn that this “subsidy cliff” could double monthly premiums for millions, with average increases estimated at 114%, and push 3.8–4.8 million Americans out of coverage. In New Mexico, that means an estimated $1,500 average premium hike per person and more than 27,000 residents facing potential loss of coverage.
To address this, Governor Michelle Lujan Grisham and state lawmakers allocated $17.3 million from the Health Care Affordability Fund in an October special session. These funds cover premium and cost-sharing reductions for BeWell marketplace users through June 30, 2026. Lujan Grisham’s FY 2026–2027 budget proposal includes additional funding if federal assistance remains stalled.
BeWell open enrollment continues through Jan. 15, 2026, offering residents a chance to secure plans before further cost increases.
