Colorado Braces for Medicaid Cuts, Hundreds of Thousands Face Losing Coverage
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Colorado health officials are scrambling to mitigate the impact of sweeping federal cuts to Medicaid, potentially leaving hundreds of thousands of residents without healthcare coverage. The Colorado Department of Health Care Policy and Financing (HCPF) held a stakeholder webinar Monday to outline the challenges and potential strategies for navigating the impending changes to the program, known as Health First Colorado.
The cuts stem from a federal tax and spending bill passed last month, and present a significant challenge for a state where Medicaid accounts for roughly a third of its $44 billion annual budget. “Our North Star goal is to mitigate the loss of coverage and its catastrophic consequences to Coloradans, providers and the economy,” said Who Bimestefer, executive director of HCPF, during the virtual meeting attended by nearly 2,400 people.
Looming Budget Shortfalls and a Fight for Funding
The state is already facing a $1 billion budget shortfall, prompting Governor Jared Polis to call a special legislative session next week to address the fiscal crisis. Bimestefer’s team is focused on maximizing available federal funds and identifying areas for savings, but the scale of the cuts presents a formidable obstacle.
Despite the daunting situation, Bimestefer struck a tone of resilience, invoking the spirit of Colorado. “Let’s step back and say, ‘We are Colorado.’ This is a difficult time. We are Coloradans and we are innovative. We pull ourselves up by our bootstraps. We collaborate. We’re smart,” she said. “We lead. So we pull together and we climb this mountain. That’s what we do. We climb mountains here in Colorado.”
A potential lifeline for the state is a last-minute application for additional federal funding. If approved, Colorado could receive $378 million annually, according to the Colorado Sun. However, this amount would not fully offset the anticipated losses. The state is also eyeing potential funds from the bill’s Rural Health Transformation Program, which will distribute $50 billion nationwide, with half allocated based on state applications. Details regarding this funding are expected later this year.
Key Numbers Reveal the Scope of the Crisis
The webinar highlighted several key figures illustrating the potential impact of the federal changes:
- 425,000 Coloradans: The estimated number of residents who could lose coverage due to cuts to hospital provider fees. Beginning in October 2027, reductions in these fees and related federal funding will significantly impact Medicaid and the Children’s Health Insurance Program (CHP+).
- $115 Million – $525 Million: The projected loss in federal matching funds for hospital reimbursement and expansion coverage, depending on future state policy decisions. This stems from a 0.5% annual reduction in federal funds states can draw down, beginning in fall 2027.
- 377,000 Coloradans: The number of individuals who will be subject to new Medicaid work requirements. These requirements, impacting primarily those who gained coverage through the Affordable Care Act’s Medicaid expansion, will necessitate proof of employment, participation in a work training program, enrollment in school, or at least 80 hours of monthly volunteer work. State administrators are awaiting further guidance from the federal government on defining “able bodied.”
- 112,000 Coloradans: The estimated number of people who could lose coverage as federal enhanced premium tax credits expire. Roughly 86% of individuals purchasing insurance through Connect for Health Colorado currently receive a subsidy.
- 14,000 Planned Parenthood Patients: The number of individuals who could lose access to Medicaid-covered healthcare services at Planned Parenthood clinics, due to a provision effectively defunding clinics that offer abortions. This provision is currently being challenged in court.
- 7,000 Legal Immigrants: The number of legal immigrants expected to lose coverage due to changes in eligibility requirements for “qualified aliens,” including asylum seekers, refugees, and victims of trafficking or domestic violence. This change takes effect in October 2026.
Increased Administrative Burden and Ongoing Litigation
The new law also mandates that the state determine Medicaid eligibility twice a year, a significant administrative undertaking. “Getting through eligibility twice a year instead of once is a barrier,” Bimestefer explained. “We want to make sure people don’t fall off the rosters because they couldn’t get through the process.”
The state is also closely monitoring ongoing litigation surrounding the defunding of Planned Parenthood, with approximately 14,000 individuals potentially affected. “We’re working with our health plans to connect those folks to needed services,” said Rachel Reiter, HCPF’s Policy, Communications and Administration Office Director.
The coming months will be critical as Colorado navigates these complex challenges and works to protect access to healthcare for its residents. The full extent of the impact remains uncertain, but state officials are committed to mitigating the damage and finding innovative solutions to ensure the health and well-being of Coloradans.
