by Patrick Lohmann, Source New Mexico
January 5, 2026
New Mexico’s Health Care Authority will receive $211.5 million in federal funding aimed at shoring up health care delivery for roughly one-third of the state’s residents who live in rural areas.
The award marks the first of five funding rounds authorized in the “One Big Beautiful Bill Act” that President Donald Trump signed last year. The bill required states to submit applications by early November for their part of a $50 billion appropriation for rural healthcare improvements.
New Mexico’s application sought $1 billion over the next five years, including $200 million in the first round, for five rural health care initiatives. The initiatives aim to improve rural access to medical specialists; increase the number of community health programs; train more health care workers; reduce financial strain on hospitals; and establish a rural health data-sharing platform.
“The funding will strengthen the hospitals and clinics that are lifelines in our communities. New Mexico’s award is above the national average, and we’re ready to put these resources to work for the families who need them most,” Health Care Authority Secretary Kari Armijo said in a statement about the award.
New Mexico received $11.5 million more than it requested, which HCA spokesperson Marina Piña told Source New Mexico resulted from the federal Center for Medicare and Medicaid Service’s “independent” funding methodology that considered the state’s rural healthcare needs and the plans it put forward to address them.
New Mexico received the 13th-most funding in the country, according to CMS data. Texas got the most, receiving a little over $280 million, and New Jersey had the smallest award, approximately $147 million.
The state’s application noted that 26 of New Mexico’s 33 counties are rural, and their residents tend to have higher rates of heart disease, diabetes and chronic respiratory disease than their urban counterparts, while often being forced to travel between 50 and 100 miles for basic health care services.
Eight of out 27 rural New Mexico hospitals are at risk of closure, according to a 2025 analysis the application cited, with four facing “immediate risk [of closure] absent intervention.” Four other federally qualified health centers have closed in recent years, as well.
Several state Republicans have lauded the funding award as a necessary investment in rural health care. Still, independent estimates show the federal spending bill will cut rural Medicaid spending overall by $137 billion over the next decade.
In addition to demonstrating the need for the funding, the state also had to address how it intends to comply with the Trump administration’s policy priorities, including aspects of Health and Human Services Secretary Robert F. Kennedy, Jr.’s agenda.
For example, states had to confirm whether they intend to have schools implement the “Presidential Fitness Test,” which Kennedy’s uncle John F. Kennedy spearheaded as president in the late 1950s. New Mexico officials said they would pursue legislative and regulatory changes to implement the test in schools by 2029.
The application also required states to describe their plans for medical licensure compacts, which have emerged as a top issue during New Mexico’s upcoming legislative session as a way to address the state’s doctor shortage. Unlike its neighboring states, New Mexico does not participate in many of the key medical compacts that enable easy license transfer between states for a variety of health care professions.
State officials wrote they intend to push the Legislature to pursue compact approval for doctors, emergency medical service providers, psychologists and physicians’ assistants during the upcoming session.
Sen. Majority Leader Peter Wirth (D-Santa Fe) recently told Source that he expects the Legislature to approve compacts for doctors and social workers at the upcoming session, but that other compacts are still being worked out.
While the state’s application agreed to pursue adoption of a new statewide fitness test and medical compacts, it said it “does not plan to pursue” another of Kennedy’s priorities: prohibiting Supplemental Nutrition Assistance Program recipients from buying junk food.
Officials wrote that the state provides “robust educational opportunities” for SNAP recipients about healthy food choices and incentivizes recipients to buy nutritious food through, for example, programs at farmers’ markets.
Piña told Source that CMS did not penalize the state for its responses to those questions.
Source New Mexico is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Source New Mexico maintains editorial independence. Contact Editor Julia Goldberg for questions: info@sourcenm.com.
