Understanding State Employee Health Insurance Enrollment: Insights From New Mexico

In this paper we examine the determinants of health insurance enrollment decisions among state employees in New Mexico, focusing on demographic, economic, and institutional factors, and assess how plan features and Medicaid eligibility influence enrollment behavior. We use a cross-sectional design employing a recursive system of Probit and Multinomial Probit models estimated via the Conditional Mixed Process framework. This system models sequential decisions regarding Medicaid participation, State Health Benefits (SHB) enrollment, dependent coverage, and plan network choice. Our analysis uses administrative enrollment records from the New Mexico Health Care Authority covering 22,556 benefits-eligible employees across state government branches in 2024. The dataset includes individual-level demographics, compensation, enrollment status, and plan selection details. Medicaid participation is strongly influenced by age, gender, income, and geography, and significantly reduces SHB enrollment probability by approximately 43 percentage points. SHB enrollment is also sensitive to gender and income, with nonresident employees less likely to participate. Dependent coverage decisions vary by gender and earnings, with higher-income males more likely to choose family or spouse plans. Network selection is associated with age, Medicaid status, and premium sensitivity. Presbyterian HMO is the most selected plan, indicating employee preference for cost-saving options. Health insurance decisions among state employees are shaped by a combination of individual characteristics and institutional constraints. Medicaid functions as a substitute for employer-sponsored coverage, particularly among low-income workers. Policymakers should consider aligning premium structures with employee needs and coordinating Medicaid eligibility cycles with SHB open enrollment to enhance participation and optimize benefit design.