Congress is edging toward final votes this week on the U.S. House of Representative’s version of President Donald Trump’s “big, beautiful bill,” which would, among other things, usher in major changes to Medicaid across the country.
Exactly how the bill would affect Colorado, though, remains somewhat unclear. In calling sources to gauge the impact, The Sun received multiple hesitant responses from folks who note the bill is still being negotiated and could evolve as it finishes in the House and moves through the Senate.
“A lot of it is still changing and/or a bit nebulous,” one source told us.
But we can at least sketch the outline of proposed changes and how they would hit Colorado. (The nonpartisan health care think tank KFF has this helpful tracker of all the health-related provisions currently in the bill.)
The bill would impose work requirements on childless, able-bodied adults.
People ages 19 to 64 who are applying for coverage under the Medicaid expansion — the part of Medicaid that covers people based on their income, up to 138% of the federal poverty level — would have to show proof of work or participation in other activities like going to school. Parents and other caretakers of dependent children would be exempt.
Medicaid expansion in Colorado covers about 370,000 adults. The Urban Institute has estimated that such work requirements would result in roughly 120,000 people in Colorado losing Medicaid coverage — because they either failed to meet the requirement or because of administration friction in trying to prove they do.
The bill would require states to redetermine eligibility more frequently.
Currently, the state checks every year to see if Medicaid enrollees are still eligible for coverage. The bill would step that up to every six months.
One risk here is that, with more frequent checks, more people who should be eligible for Medicaid could lose coverage due to paperwork glitches. For background: During the COVID pandemic, federal rules prevented states from disenrolling people from Medicaid. When that stopped, Colorado saw one of the biggest declines in Medicaid enrollment, with critics saying that a clunky process resulted in eligible people getting kicked off coverage.
Using Congressional Budget Office estimates, KFF has projected that the bill overall would cause 140,000 more people in Colorado to be uninsured. This could have a massive impact on Colorado’s safety net hospitals and medical clinics, which already have been struggling with higher rates of uninsured patients.
The bill would freeze new provider fees.
Almost every state, including Colorado, takes advantage of a system whereby they charge taxes or fees on hospitals and then use that money to leverage higher amounts of federal Medicaid funding.
In Colorado, it works like this: Hospitals pay a fee based on inpatient days and outpatient charges. That pool of money attracts a chunk of matching federal dollars. The state then redistributes the combined amount back to hospitals, giving the hospital industry as a whole a net win and helping to compensate for the fact that Medicaid shorts hospitals on payment for the services its members receive. (In Colorado, Medicaid pays about 80 cents on the dollar for what it costs to provide a service.)
In 2023, hospitals paid about $1.3 billion in fees, and the state ended up distributing about $1.8 billion in what are called “supplemental payments” back to hospitals — so a roughly $500 million gain for hospitals. The payments especially benefit hospitals that treat a lot of Medicaid patients. (Other money from this system goes to pay for Medicaid expansion coverage.)
Early in the process of drafting the federal bill, there had been rumblings that Republicans could go after this system, and the Colorado Hospital Association warned that even scaling it back could cut $11 billion in federal Medicaid funding to the state over a five-year period.
What ended up in the bill — at least so far — is more modest: A freeze on new provider taxes or on increasing the rates of existing taxes. There are also more technical details, so it’s somewhat unclear how this might impact Colorado. But Cara Welch, a spokesperson for the hospital association, wrote in an email that, “We believe the cuts in that specific area should not be as detrimental as we originally projected.”
The bill would punish states with programs that provide health coverage for immigrants.
Colorado has two state-funded programs to provide health coverage for immigrants regardless of their legal status — one extends Medicaid coverage to children and people who are pregnant, the other offers subsidies to a limited number of people to help them buy private insurance.
Both of those programs would seem to run afoul of a provision in the bill that would punish states for providing coverage to immigrants who are undocumented.
The bill would reduce federal payments to cover the Medicaid expansion population. Currently, the feds pick up 90% of the bill, but states that violate this provision would see that rate drop to 80%. This could hit Colorado to the tune of hundreds of millions of dollars a year if the legislature did not repeal the coverage programs.
The bill would ban Medicaid payments for certain procedures and providers.
The bill would prohibit states from using federal dollars to cover gender-affirming care for people under 18. It would also ban payments for any services to certain providers that perform abortions.
Critics of the latter provision see this as an attempt to defund Planned Parenthood.
“This provision is about punishing Planned Parenthood health centers for providing abortion care, and threatening access to affordable birth control, wellness checkups, and cancer screenings for millions of people across the country in the process,” Alexis McGill Johnson, the president of CEO of the national Planned Parenthood Action Fund, said in a statement.
Colorado has taken steps to expand abortion access, including through Medicaid. Under a constitutional amendment passed last year, Medicaid would cover abortions — but use only state dollars to do so.Colorado has also worked to protect access to gender-affirming care. Medicaid in Colorado does pay for some gender-affirming therapies, but it is unclear to what extent these provisions would affect the state programs.
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