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Few accounts document the rural context of mental health safety net institutions (SNIs), especially as they respond to changing public policies. Embedded in wider processes of welfare state restructuring, privatization has transformed state Medicaid systems nationwide. We carried out an ethnographic study in two rural, culturally distinct regions of New Mexico to assess the effects of Medicaid managed care (MMC) and the implications for future reform. After 160 interviews and participant observation at SNIs, we analyzed data through iterative coding procedures. SNIs responded to MMC by nonparticipation, partnering, downsizing, and tapping into alternative funding sources. Numerous barriers impaired access under MMC: service fragmentation, transportation, lack of cultural and linguistic competency, Medicaid enrollment, stigma, and immigration status. By privatizing Medicaid and contracting with for-profit …