This story, part of an ongoing Public Health Watch project "Uninsured in America," was co-reported and co-published with the nonprofit newsroom Public Health Watch in Texas.
Sarah Gregg describes the afternoon that Albuquerque police raided her home and condemned her house as the “best day” of her life.
It was a slow summer day. So Gregg, her husband and their two young daughters were still in pajamas when officers in SWAT gear pounded on the front door. Gregg had just finished her grocery list and was about to slip away to inject heroin. She was feeling more desperate than ever to stop using.
“I remember my [now] late husband saying once, ‘You never look like a junkie until you run out of money or you’re trying to quit.’”
Gregg, now 54, was facing both when the raid occurred in 2017. But the fear of another failed effort to quit and the physical pain of withdrawing from a years-long opioid addiction cast a crippling shadow. She felt trapped.
Her arrest that day forced her hand. But the real turning point, she said, was having Medicaid after her release.
With health insurance, Gregg could easily afford methadone, the “gold standard” treatment for opioid use disorder. Medicaid also covers transportation for medical appointments, which was key since Gregg didn’t have a car. She had to visit the methadone clinic daily to pick up her prescription.
“I probably would not have been able to maintain [that regimen] without the Medicaid rides, so I can’t even fathom what would have happened to my life,” said Gregg, whose addiction began with a painkiller prescription for a back injury. “Honestly, I probably would have never gotten my kids back.”
Recoveries like Gregg’s are endangered more than ever in New Mexico — and the entire country — because of a tsunami of changes coming to Medicaid. H.R. 1, the sweeping budget bill that President Donald Trump signed last summer, is projected to cut federal Medicaid spending by nearly $1 trillion over a decade and will impose strict work requirements on millions of enrollees starting January 1. Between 5 million and 10 million low-income Americans could lose their health coverage in 2028 alone because of the Medicaid changes, a March report from the Robert Wood Johnson Foundation and the Urban Institute found. That includes people struggling with addiction.
In New Mexico, advocates and providers who work on the front lines of the overdose crisis told KUNM and Public Health Watch that they are watching and preparing with trepidation. The state has one of the highest drug-related death rates in the country. Medicaid coverage is a critical tool in preventing overdoses and getting New Mexicans into addiction care, experts say.
Overdose deaths more than doubled in New Mexico from 2017 to 2021, to 1,029 people, then declined by over 27% over the next three years, reflecting a national trend, New Mexico Department of Health data show. But provisional federal data show that fatal overdoses are inching back up in 2025.
Changes that make it harder for people with drug-use disorders to get or renew Medicaid coverage will push that toll up, said Daniel Duhigg, an addiction psychiatry specialist at Duke City Recovery Toolbox, the methadone clinic near downtown Albuquerque where Gregg sought help. Nearly every patient there relies on Medicaid to afford care.
“What comes to mind is people dying and people suffering,” Duhigg said. “It’s not theoretical … It’s happening every day. Treatment at clinics like this are a literal lifeline.”
The new work-reporting requirements are of particular concern. They’re aimed at the nearly 20 million U.S. adults covered by Medicaid expansion, which all but 10 states have adopted under the 2010 Affordable Care Act. New Mexico was an early adopter, enacting expansion in 2013. The change widened Medicaid eligibility to adults with incomes up to 138% of the federal poverty level — currently, about $30,000 for a household of two.
As of May, about 228,700 New Mexico adults were covered by expansion — more than a quarter of the state’s Medicaid population. A 2025 federal study found that 60% of the state’s Medicaid enrollees with an opioid use disorder received treatment via expansion coverage.
When the work requirements kick in, expansion enrollees will be required to participate at least 80 hours per month in activities such as employment, job training or community service, or be in school part-time. They must prove they’re still eligible every six months. Some may qualify for exemptions, including people in qualified substance use treatment programs and those considered “medically frail.” Having a chronic substance use disorder can count as a frailty.
But proving an exemption will not be easy.
Last week, the U.S. Centers for Medicare and Medicaid Services, or CMS, released its long-awaited interim rule on work requirements. Policy experts and health providers say the almost 400-page guidance is stricter than expected and will likely swell disenrollments.
“It’s going to be a whole lot of paperwork and a whole lot of complex navigation in an already-complex system,” said Abuko Estrada, healthcare director at the New Mexico Center on Law and Poverty. “This isn’t even getting health care. This is just to maintain their coverage.”
The guidance makes it harder to obtain a medical-frailty exemption than states had expected. It requires expansion enrollees to not only prove they have a qualifying condition — such as cancer, epilepsy or a drug-use disorder — but that it’s severe enough to keep them from meeting work requirements.
That severity language wasn’t in H.R. 1 and could throw a wrench in state plans. Nebraska, for example, which launched Medicaid work requirements in May, issued a 295-page list of eligible diagnoses that didn’t include criteria for severity or ability to work.
States will have to figure it out quickly. Verifying people’s health conditions can be done with information the state can already access, such as Medicaid claims data. Severity could be gleaned from data on health care utilization. But there is no easy diagnostic code for a person’s ability to work.
Kate Morton, chief clinical officer at Albuquerque Health Care for the Homeless, where most patients have Medicaid, worries the new burden will fall on her and her patients. The extra paperwork will leave less time to focus on her patients’ complex health needs, including high rates of substance use disorders.
“It’s going to be time-consuming, it’s going to be labor-intensive,” Morton said. “It puts a strain on our system.”
She’s bracing for more fatal overdoses as work requirements come online and people lose coverage. Substance-use relapse can be dangerous for people in longer-term recovery whose tolerance has dropped. “The overdose risk is astronomical,” Morton said.
Alanna Dancis, acting director of New Mexico Medicaid, said the agency is reviewing the new CMS rule, but plans to use “every allowance” provided to limit the administrative burden for Medicaid enrollees.
Gregg said more bureaucratic tasks would likely have undermined her treatment and recovery after the police raid. Any extra hurdle to accessing methadone would have made it easier to go back to heroin, she said. “Your brain is always trying to give you an excuse. It’s crazy the rationale that you’ll use,” Gregg said. “It was all the difference in the world that there weren’t any roadblocks.”
New Mexico health officials have estimated that 89,000 adults will be permanently disenrolled from Medicaid after the work requirements take effect. Most New Mexicans with Medicaid coverage — 70% — are already working.
LIVES ON THE LINE
More than 1,000 colorful, hand-painted tiles cover the walls of an outdoor alcove at Albuquerque Health Care for the Homeless. Each tile memorializes the passing of an unhoused Burqueño, the word locals use to refer to themselves.
Morton said she’s not sure how many of the tiny memorials are related to an overdose. But the risk of an overdose looms large for many of her patients.
The health center sees about 5,000 patients a year, and about a quarter have a substance use disorder, a 2023 needs assessment found. Morton suspects that rate is higher today.
Before New Mexico adopted Medicaid expansion, most of the clinic’s patients were ineligible for Medicaid despite living in extreme poverty, said Rachel Biggs, the clinic’s CEO. Now about 80% are eligible.
The increase has transformed access to addiction care, Biggs said, including access to medicines such as methadone and buprenorphine. Both are treatments that reduce drug cravings and withdrawal symptoms and are shown to cut the risk of a deadly overdose by half.
Nationwide, research shows Medicaid expansion has led to a significant rise in people seeking medications and other treatments for substance use.
“The benefit of Medicaid is something that can’t be replicated,” Biggs said.
She and Morton hope state policymakers will pursue the broadest-possible work exemptions and limit paperwork for patients and providers. But they still expect the new hurdles to bump eligible people off the Medicaid rolls.
Recovering from a drug use disorder isn't a smooth process, Morton said. A person's ability to work can change from week to week. Without broad exemptions, patients could become entangled in the work rules and lose coverage, she said.
Biggs said the clinic is readying for a surge in uninsured patients and uncompensated care. “People aren’t going to be losing their Medicaid because they’re ineligible,” she said. “They’re going to be losing it because of red tape and paperwork.”
This happened in other states that experimented with work requirements. In 2018, when Arkansas became the first state to implement such requirements, about 18,000 people were disenrolled in less than a year, many for paperwork reasons, not because they were ineligible. A federal court struck down the requirements. H.R. 1 has essentially legalized them.
An analysis released in 2025 by the Center for American Progress, a nonprofit advocacy group, estimated that 1.6 million Medicaid enrollees with substance use disorders could be disenrolled because of H.R. 1’s work mandates, including more than 30,000 New Mexicans.
The requirements could also snag Medicaid enrollees who have addiction problems but haven’t been diagnosed or treated yet. A 2020 analysis by New Mexico health officials found just a third of residents with a substance use disorder are receiving care.
Jacque Garcia, a family nurse practitioner at Albuquerque Health Care for the Homeless, said the clinic has some financial assistance for patients who lose Medicaid, allowing them to keep up with their addiction medications. But the funding is limited.
She’s worried the added stress of work requirements will lead to poorer health outcomes for people in substance-use care. A recent study found the administrative burden of Georgia’s new Medicaid work requirements worsened mental health among enrollees.
“A lot of these folks are trying to survive,” Garcia said. “They are in recovery. They’re just trying to get to the next day, the next meal.”
The churn of going off and on insurance or losing their addiction medicines poses a serious health risk, said Estrada, at the New Mexico Center on Law and Poverty. He wants state lawmakers to reduce the risk by making the exemption process as easy as possible.
For example, officials could add a simple set of questions to Medicaid renewal forms that lets people self-attest to being eligible for a work requirement exemption, Estrada said. The new CMS rules allow for self-attestation in the first year of requirements. But starting in 2028, enrollees can only self-attest to medical frailty once before documentation is required.
Another strategy is making sure enrollees eligible for multiple exemptions are assigned to the most generous one, Estrada said.
One group especially disadvantaged by the requirements is people with criminal justice records. Some studies show more than two-thirds of those incarcerated in U.S. prisons have an active substance use disorder.
For people with a criminal record, “there are not enough second-chance employers,” said Duhigg, the medical director at the Duke City Recovery Toolbox clinic. Meeting work requirements could be extremely difficult. “That is setting people up for failure,” he said.
Duhigg remembers the excitement after Medicaid expansion came online and more people with opioid use disorder could afford care. He’s worried that work requirement exemptions won’t take into account the long process of addiction recovery.
“The stakes are so high,” he said. “Because without this, people have nothing but the drug dealer on the street.”
Ashe Charzuk, executive director of the New Mexico Harm Reduction Collaborative, predicts the new Medicaid rules and funding cuts will increase overdose deaths.
The Albuquerque-based nonprofit offers various services for people using drugs, including clean syringes and naloxone, which reverses the effects of an opioid overdose. Charzuk applauds the state for its behavioral health investments in recent years, but believes those will be first on the state’s chopping block when federal Medicaid cuts start rolling down.
Charzuk has been in recovery from opioid use for almost 20 years. She can’t imagine if she had to deal with work requirements while trying to quit. Learning to live without drugs early on took all of her capacity.
"I think people are gonna fall off [Medicaid]," she said,. "and then it's going to be a never-ending game of catch-up."
Dorian Calvin, 46, was living “nowhere really” when he visited the collaborative’s office in late February. The wood-paneled lobby was stocked with free water and clothing. A whiteboard warned visitors about contaminants in the local illicit drug supply, confirmed by the nonprofit’s lab-testing program.
Calvin says he relies on Medicaid to treat a decades-long addiction and to afford his methadone prescription. He thinks rules that make it harder to qualify will “mean hell for people.
“What methadone does is help others,” he says. “It allows people to tolerate us addicts.”
A FRAGILE PROCESS AT RISK
New Mexico expects to lose billions in federal Medicaid funds because of the historic cuts Trump signed into law.
The state’s legislature convened in a special session last year to deal with the fallout and passed measures to shore up healthcare affordability. But the large cuts will be difficult for every state to outrun. As an offset, the state could target behavioral health services because they’re so expensive.
New Mexico spends about $1 billion on behavioral health each year, 88% of which goes to Medicaid, reports the state Health Care Authority. From 2023 to 2025, Medicaid spending on behavioral health services increased by nearly 50% in New Mexico; spending on substance use treatment went up 82%.
“In a state where addiction and overdose are this pervasive, Medicaid isn’t just a budget line,” said Marlene Lira, a public health researcher and president-elect of the New Mexico Society of Addiction Medicine. “It’s really the difference between recovery and relapse.”
At Albuquerque Health Care for the Homeless, providers worry federal cuts could jeopardize a state pilot program for the unhoused launched by the health center last year.
The medical respite-care program, included in a federal Medicaid waiver, gives unhoused people a safe place to heal after being hospitalized, including for a drug overdose. It also lets providers bill Medicaid for room, board and services. Research shows such programs help reduce expensive hospital and ER re-admissions.
Morton, the center’s chief clinical officer, said respite is an opportune time to talk with patients recovering from an overdose about treatment. “We look at overdose as a near-miss and if someone survives, we want to make sure we’re providing them that life-saving care right away,” she said.
Biggs, the center’s CEO, said the pilot is already benefitting people, but she worries about its future given the current funding climate. Medical respite is considered an optional, not mandatory, Medicaid benefit.
“Our elected officials will have to make a really hard decision in the coming years about what gets cut from Medicaid,” she said.
Fears and hope
Steven Brooks is also nervous about Medicaid’s future, but his outlook is hopeful. “A man without hope is a dangerous man,” he says.
He beams with pride showing off the Albuquerque Center for Hope & Recovery, a small brown house several blocks from the county courthouse. The tiny lobby is busy with people waiting for addiction support groups to start. Outside, local barbers give free haircuts.
The center is Bernalillo County’s oldest peer-run agency, meaning all the workers there have experiences similar to the people they help. Hundreds visit each month for substance use counseling, case management or help finding a job. People who are homeless can receive mail at the center.
Brooks, the center’s associate director, had worked for decades in the juvenile justice system. The experience made it clear that substance use is often a symptom of an underlying issue, such as childhood trauma, he said. At the “little brown casita of hope,” as the center is known, Brooks and his colleagues can focus on those root causes.
He has many frustrations with Medicaid, but said the program is key to helping people get healthy enough to tackle their larger issues. “You could have 99 problems, but as soon as your health goes, you’ve got one problem,” he said.
Brooks expects many of the center’s clients to become uninsured because they can’t keep up with new work requirements. He believes that’s the real point of the new rules, anyway — to push people off Medicaid.
The new CMS guidance on Medicaid work requirements will be open for public comment through July 31.
This story is part of “Uninsured in America,” a project led by Public Health Watch, a nonprofit news organization that focuses on life in America’s health-coverage gaps and the impact of potential Medicaid cuts and other changes.
