Is Medicaid eating the state budget? ...Middle East

A festive good mid-day to you, readers, and welcome to the last Temperature of the year!

Mike and I are taking next week off, which means we won’t see you in your inboxes until 2025. So let us take this opportunity to say THANK YOU to all of our Temp readers, who make this work possible but also make it meaningful.

I may not be the best at responding to emails — OK, I’m actually probably closer to the worst. But we read your messages, every one, and it means the world to us that you take the time to read, to write in, to offer tips or suggestions or food for thought or fact checks to hold us accountable or even grammatical corrections (really!).

In life, we don’t have to agree — it’s better that we don’t all the time. But sharing in an informed community that listens to one another and cares passionately about the place we call home is a wonderful gift we can give to each other.

So happy holidays to you and yours, and let’s dig into this week’s news.

John Ingold

Reporter

TEMP CHECK

MEDICAID

Medicaid is taking bigger bites out of the state budget. Here’s why.

“This is just going to be an ongoing increase as a percentage of our budget”

— state Sen. Jeff Bridges

About an hour into a meeting last week to go over the budget for the state’s Medicaid department, lawmakers on the Joint Budget Committee settled into a sobering realization.

Rep. Shannon Bird, a Westminster Democrat who serves as the committee’s vice chair, pointed committee members to a chart in a briefing document that she said “anybody who cares about the state’s fiscal position or fiscal health” needed to understand. This is that chart:

Here’s the summary: Colorado’s Medicaid department, which receives billions in federal funds each year, is also gobbling up bigger chunks of the state’s general fund, the discretionary pot of money that lawmakers use to pay for all kinds of state services.

The causes of the consumption are not necessarily what you might think. Even worse, there’s no easy or painless way to fix it.

“This is just going to be an ongoing increase as a percentage of our budget, more and more that is just going to eat other things that we can’t spend money on,” said Sen. Jeff Bridges, a Greenwood Village Democrat and the committee’s chair.

Medicaid is most commonly known as a government program to provide health coverage to people who are impoverished or who have low income. That perception is why, in times of fiscal constraint, discussion nationally often turns to imposing work requirements on Medicaid recipients.

But Medicaid covers a lot more than low-income adults. It covers a huge number of children — approximately a third of children in Colorado are covered by Medicaid or a companion program called CHP+. Medicaid pays for services for people with disabilities. And it covers nursing home care for older individuals.

Those last two groups are where to focus when thinking about Medicaid’s ballooning costs.

Most working-age adults on Medicaid are covered under what is known as the Medicaid expansion of the Affordable Care Act. The state spends no general fund dollars paying for their care — the federal government picks up 90% of the cost, while a fee on hospitals that attracts another heaping pile of federal dollars pays for the rest.

Children, meanwhile, are pretty cheap to insure, at least on a per-person basis. That leaves people who are ages 65 or older or who are disabled, whose coverage costs a lot. (Medicare, the federal program most commonly associated with coverage for older Americans, does not pay for long-term nursing at home or institutions.)

To give one example, the state in the next fiscal year expects to add 4,000 older individuals to its Medicaid rolls. That’s it — 4,000 people out of a state of 5.8 million, a 5% increase from the current enrollment of people 65+.

But that modest increase is expected to add $121 million to Medicaid’s spending. A 6% increase in the number of people with disabilities is expected to add $305 million.

Together, people who are disabled or who are older make up 14% of Medicaid’s enrollment in Colorado but account for 52% of total spending — and 70% of general fund spending.

This explains how Medicaid enrollment has fallen, as the state has hemorrhaged enrollees post-pandemic and to the detriment of a large number of community clinics and mental health care providers, but Medicaid spending continues to rise.

“We had this precipitous drop in adults and children,” Eric Kurtz, a chief legislative budget and policy analyst with the JBC, told committee members last week. “But it just didn’t decrease our expenses enough to offset the increase for the elderly and people with disabilities.”

The reason is that the amount charged for services provided to those individuals — be it in a nursing home, or through at-home care or some other specialty service — is going up. And the amount of services people on Medicaid are using is also going up. A double-whammy of cost and utilization.

And that leads us to the current, daunting predicament: How do you save money when your biggest expenses are in caring for the state’s most vulnerable people?

“When you’re talking about trying to change that trend line, you’re talking about cutting off or reducing eligibility and benefits for the elderly and people with disabilities,” Kurtz said. “And then the next category would be kids. Not categories the legislature has traditionally wanted to reduce for Medicaid.”

That is something lawmakers will struggle with in this tight budget year, and for years to come, too.

John Ingold | Reporter

COVER ALL COLORADANS

A yet-to-be launched program to insure immigrant children may already be in peril

“Totally irresponsible.”

— state Sen. Barbara Kirkmeyer

One area of the Medicaid budget where lawmakers could look to cut is a program that hasn’t even started yet.

The Cover All Coloradans program is set to kick off Jan. 1. The program extends Medicaid coverage to immigrants who are children or who are pregnant, regardless of their legal status.

Generally, noncitizens aren’t eligible for Medicaid unless they have permanent legal status. But Medicaid does cover emergency care for immigrants regardless of legal status. One argument in favor of the Cover All Coloradans program is that providing preventive care up front will save the state money down the road in not having to pay for more costly emergency procedures.

But, in looking for ways to save money this year, what caught the eye of some Joint Budget Committee members last week is this: The program is going to cost a lot more than originally expected.

The Department of Health Care Policy and Financing, which administers Medicaid in Colorado, had originally estimated the program would cost $34 million in its first year, with $15 million coming from the general fund.

But the department and health care advocates have had tons of success in signing up enrollees early. That, plus the experience of Oregon, which launched a similar program last year, has led the department to increase its estimate for how much Cover All Coloradans will cost. The new figure is $51 million, including $39 million from the general fund.

Eric Kurtz, the JBC budget analyst, zeroed in specifically on the program’s coverage for children. The state expects to receive federal approval to enroll pregnant individuals into the full CHP+ program, meaning the feds will pick up some of the costs for their care. Kids on Cover All Coloradans, however, will need to be paid for entirely out of state dollars.

The state originally estimated covering children in the program would cost about $4 million in the first year. That has now risen to $32 million.

That’s an enormous increase, but it is also a small portion of the entire Medicaid budget. The state has requested $17.4 billion to fund the Department of Health Care Policy and Financing in the next fiscal year, meaning its budget takes up roughly a third of the entire state budget.

But, in a year where lawmakers will be looking to trim anywhere they can, the program could get cut, as discussion at the JBC indicated.

Sen. Barbara Kirkmeyer, a Brighton Republican, said it was “totally irresponsible” for the state to allow the budget projection to grow so much.

“This is a huge increase,” she said. “They could have paused this program sooner.”

But others said it would be morally wrong to deny kids health coverage and also unwise because it could lead to higher bills for emergency care in the future.

“We’re talking about shutting off a program that is weeks away from turning on?” Rep. Emily Sirota, D-Denver, said. “It’s not on my list.”

John Ingold | Reporter

ETHICS

The UnitedHealthcare shooting, from one Colorado medical ethicist’s point of view

“What we know about assassinations is that they rarely end up producing the good effect that people think they’re going to produce.”

— Dr. Matthew Wynia

The killing of UnitedHealthcare CEO Brian Thompson is a tragedy. But the weeks since have also shined a light on something people working in patient advocacy know all too well: The ...

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