Colorado Officials Issue Warning Over Medicaid Cuts

Colorado lawmakers are preparing for the possibility of an additional legislative session amid the looming threat of potential Medicaid funding cuts.

State officials and health care leaders have been sounding alarms in recent weeks about the potential impact if House Republicans make reductions to Medicaid, which their budget seemed to propose as part of its wider economic decisions.

Why It Matters

Medicaid, which provides health coverage to almost 80 million low-income Americans, faces potential reductions nationwide as Congressional Republicans push for budget cuts.

Proposals under discussion include reducing federal support for Medicaid expansion under the Affordable Care Act, imposing work requirements for some adult beneficiaries, and closing mechanisms that allow states to draw down extra federal funds through provider taxes.

According to Reuters, these changes could result in millions losing coverage, with about 600,000 potentially affected by work requirements alone, and shift significant financial responsibility to state governments.

What To Know

Governor Polis’ budget director, Mark Ferrandino, warned this week that Colorado could see up to $1 billion in cuts to federal Medicaid funding, according to the local news outlet The Colorado Sun.

Speaking to health care leaders, Ferrandino said that the state would not replace the lost federal dollars.

With the state’s Medicaid agency operating on an $18 billion budget — more than $10 billion of which comes from federal funds — the possible reductions would represent a roughly 10 percent loss in federal support.

Ferrandino noted that Colorado contributes about $5 billion from its general fund to Medicaid, making it the largest general fund expenditure. He added that tight fiscal conditions make additional state spending unlikely.

“It is going to be a more difficult budget,” Ferrandino said, adding that lawmakers had already pushed some budget challenges into next year.

The Joint Budget Committee, which handles budget matters for the legislature, is already preparing for hard decisions.

State Senator Judy Amabile, a Democrat and committee member, also acknowledged the likelihood of a return to the Capitol later this year, according to The Colorado Sun.

“There certainly are a lot of indicators that would suggest that we might end up having to come back in the event that there’s a dramatic cut to Medicaid,” Senator Amabile said.

The projected cuts in Colorado have prompted urgent action from local officials. Earlier this month, Governor Jared Polis and Lieutenant Governor Dianne Primavera sent a letter to the state’s congressional delegation opposing the proposed reductions. The cuts, they argued, could result in the loss of 12,000 jobs, a $1.3 billion decrease in state GDP, and $82 million less in state and local tax revenue.

“Children, hardworking individuals, people with disabilities, seniors, and safety net providers are not political pawns or talking points,” they wrote.

What People Are Saying

Colorado Governor Jared Polis’ budget director Mark Ferrandino said: “Just to be clear to everyone, if that’s the cut, we are not backfilling, which means we have to make cuts both in Medicaid and other places in the state budget to deal with it.”

Michelle Mills, CEO of the Colorado Rural Health Center, said in the statement: “Cutting funding that has been a cornerstone supporting the rural health care delivery system for decades is both short sighted and profoundly damaging. Every dollar of federal funding invested in rural healthcare is an investment in thriving communities.”

Representative Gabe Evans, a Republican from a swing district in Adams and Weld counties, defended the proposed cuts, saying: “We’re going back to cutting out the fraud, waste and abuse that actually preserves the program by making sure that we can get more resources to the people who are actually lawful beneficiaries of it.”

What Happens Next

As uncertainty looms, state officials are bracing for difficult decisions. Ferrandino said that without knowing exactly where the federal cuts will land, specific plans for Medicaid reductions have yet to be formed.