N.M. Admin. Code § 3.2.241.18
Payments from an insurer in accordance with a medigap policy are not deductible under Section 7-9-93 NMSA 1978. Medigap policies are not paying for "commercial contract services" as defined by Section 7-9-93 NMSA 1978. For purposes of the deduction under Section 7-9-93 NMSA 1978, amedigap policy meets the statutory definition of a "medicare supplemental policy" contained in 42 U.S.C. 1395 ss(g)(1). It is a health insurance policy or other health benefit plan offered by a private entity to those persons entitled to medicare benefits and is specifically designed to supplement medicare benefits. Medigap policies do not include limited benefit coverage available to medicare beneficiaries such as "specified disease" or "hospital indemnity" coverage.
N.M. Admin. Code § 3.2.241.18