More than 100,000 Coloradans could lose their health insurance and the state would face a budget shortfall in the billions if Congress passes newly proposed cuts to Medicaid, according to preliminary estimates from state agencies and nonprofit groups.
Two points in House Republicans’ plan to slash Medicaid spending would cause most of the losses: work requirements, which a national nonprofit estimated would push anywhere from 95,000 to 108,000 people in Colorado off the program, and reducing states’ ability to claim matching federal funds when they tax health care providers.
The Colorado Hospital Association projected earlier this year that the state could lose $11 billion over the next five years if the law changed to eliminate all matching funds on the taxes, but said Tuesday that the current proposal calls for less-severe reductions.
Provisions that would cut federal funding for care provided to undocumented immigrants in emergencies and penalize states that choose to pay for that care with their own money would add to the possible losses, though the association’s analysis didn’t assign a dollar amount to those changes. Colorado covers undocumented children and pregnant women.
House Republicans’ legislation, unveiled over the weekend, would make at least $880 billion in cuts, largely to Medicaid. The bill would:
Ban Medicaid or CHIP funding for medical gender transition care to people under 18 Allow retroactive payments for one month, rather than three. If a person eligible for Medicaid but not enrolled receives care, the provider can get paid for the treatment they provided, as long as the person signs up in time. Shortening that window would mean hospitals and other providers would be left with more uncollectable bills. Require states to redetermine recipients’ eligibility every six months, rather than annually Eliminate most payments to pharmacy benefit managers, which are entities that decide what drugs a health plan should cover, and at what cost Require states to charge out-of-pocket costs for health care to people with incomes over the federal poverty line, which is $15,650 for an individual. It exempts primary care, prenatal care, care to children, and emergency department care.Colorado spends about $15 billion per year on Medicaid. The hospital association reported Medicaid paid for 705,000 emergency room visits and 117,000 hospital stays, including 18,000 births, in 2024.
The state likely couldn’t replace the reduced federal spending, having just faced a $1.2 billion budget hole for the fiscal year starting in July. While lawmakers managed to plug it this year, they anticipate a need for deeper cuts next year.
Shelby Wieman, spokeswoman for Gov. Jared Polis, said his office is analyzing the bill in Congress, and he may need to call a special legislative session if it moves forward.
“Federal cuts would threaten the health care of hundreds of thousands of Coloradans, and Gov. Polis continues to urge Congress to avoid devastating federal cuts to health care that would hurt our economy and our health care system,” she said.
The bill’s work requirements would cause direct coverage losses, when recipients couldn’t show they either had a job or qualified for an exemption. Reducing Medicaid funding to states likely would cause further losses, however.
At an event earlier this spring, Polis said cutting the rates Colorado pays to health care providers wasn’t a viable solution, because they would stop seeing patients covered by Medicaid. Since the state also can’t afford to replace billions in federal funding, the only remaining option is to cover fewer people, such as those who became eligible when the Affordable Care Act expanded Medicaid to cover those earning up to 138% of the poverty line.
Paying for tax cuts
The proposal released over the weekend would reduce federal spending on Medicaid and the Affordable Care Act’s insurance marketplaces by $715 billion.
Republicans have said they want to focus on eliminating fraud, waste and abuse in health programs and use the bill to renew President Donald Trump’s tax cuts.
U.S. Rep. Gabe Evans, who represents Colorado’s 8th Congressional District, said Medicaid spending will continue to increase annually and the plan will protect “the most vulnerable.” Evans is a member of the Energy and Commerce Committee, which voted Wednesday to send the bill to the full House.
“As the father of a medically complex kid, I understand how significant programs like this are, and that’s why I am committed to protecting Medicaid and ensuring its longevity for the people who need it most,” he said in a statement.
Rep. Diana DeGette, a Democrat representing Denver, said the Republicans’ proposed cuts to Medicaid are primarily aimed at paying for tax cuts for the wealthy.
“House Republicans are so laser-focused on pleasing Trump, they are willing to make their constituents’ lives harder and health care more expensive,” she said in a statement.
The bill still will have to pass both the House and the Senate. Republicans have a narrow majority in both chambers.
President Donald Trump said he wants Congress to pass a “big, beautiful bill” extending tax cuts that are due to expire this year, as well as a way to pay for them, by Memorial Day. The proposed reductions to Medicaid wouldn’t offset the $4.5 trillion in tax cuts, meaning that the national debt would continue to rise, unless Congress can find significant savings elsewhere.
Medicaid cuts could hit programs that support people with disabilities, said Meg Moore, vocational program director for SustainAbility Recycling, which has three locations in the metro area. The organization uses Medicaid funding to employ people with developmental disabilities while teaching them skills they can use to find jobs in the community, she said.
Moore isn’t sure how much the organization might lose, because the state will have to decide where to make cuts if the changes become law.
People who don’t rely on Medicaid often don’t know about the services it funds, Moore said. It pays for alternatives, such as group homes and apartments with wraparound support, for people who can’t live independently and otherwise would face homelessness or institutionalization, she said.
“Those were the reasons we put those programs in place, to avoid those two outcomes,” she said.
Provider taxes
The federal government pays a share of each state’s Medicaid costs, based on its poverty rate and other factors.
States figured out that they could increase the matching dollars they get by taxing hospitals or other health care providers, because the federal government considers those fees or taxes a health care expense. Colorado then distributes part of the tax it collects from providers and the federal matching dollars to hospitals that serve more patients who are uninsured or covered by Medicaid. The state also uses some of the funds to cover a portion of Medicaid recipients’ health care.
States could still collect provider taxes, but with a lower federal match, they’d have less incentive to do so. Health care facilities might also be less willing to pay.
Rep. Alexandria Ocasio-Cortez, a New York Democrat, said in Congress on Tuesday that Medicaid cuts could put Platte Valley Hospital in Brighton at risk of closing. But the hospital’s owner, Intermountain Health, on Wednesday said it is “resilient” and hasn’t discussed situations that could force it to close.
While cutting provider fees wouldn’t directly remove people from Medicaid, states would have to cope with reduced federal funding, and limiting who the program covers is one of the major options available to them, according to the Congressional Budget Office.
The office estimated that reducing provider fees would result in about 8.6 million people losing Medicaid coverage nationwide, and about 3.9 million of them becoming uninsured.
In a letter to Colorado’s Congressional delegation, Polis and Lt. Gov. Dianne Primavera said the state uses provider fees to help fund coverage for people covered by the Affordable Care Act’s Medicaid expansion, pregnant women and children who qualify for the Children’s Health Insurance Program and some people with disabilities.
“Cutting provider fees would essentially have the same net effect as cutting Medicaid directly. Without this funding source, we would likely be unable to continue coverage for these populations at their current levels,” they wrote.
Work requirements
Another provision, adding work requirements, most likely would result in people losing their insurance.
The proposal would require people between 19 and 64 who don’t have dependents and aren’t pregnant to work, volunteer or attend school or job training for at least 80 hours per month. Colorado, like most states, currently doesn’t have a work requirement.
The Congressional Budget Office estimated that work requirements in a different bill would have saved the federal government about $109 billion over 10 years, because it would no longer pay to help insure 1.5 million people. The office expected a “negligible” effect on how many people had jobs, or the number of hours they worked.
The Robert Wood Johnson Foundation and the Urban Institute estimated between 95,000 and 108,000 people in Colorado could lose Medicaid coverage under work requirements. Most would already have jobs or qualify for an exemption, but would fail to file the paperwork, they projected.
About 1.3 million people in Colorado have Medicaid insurance.
Work requirements would target a relatively small share of people covered by Medicaid. About 64% of covered adults who are younger than 65 and didn’t receive disability income already had a job, according to the health research group KFF.
An additional 28% would appear to be exempt, because they reported caregiving responsibilities, that they were in school, or that they had a health condition that kept them from working.
About 8% said they were retired, couldn’t find a job, or weren’t working for some other reason, suggesting work requirements could apply to them.
Only one state has tried traditional work requirements.
In Arkansas, about 18,000 people lost coverage, mostly for not filing monthly reports, before a judge put the program on hold. A survey of recipients affected by the work requirements found they didn’t report any increase in employment, though the authors noted that people don’t always remember how much they worked over time.
The Colorado Department of Health Care Policy and Financing estimated that it would have to spend about $57 million on staffing and computer systems to implement work requirements, said Bethany Pray, chief legal and policy officer at the Colorado Center on Law and Policy.
Providers would also lose money, because people who lost their insurance would still come in when they needed emergency care, she said.
“This proposal really only works if a lot of people lose Medicaid,” she said. “We have a safety net that is troubled already.”
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