Colorado’s Medicaid program faces cuts in both federal and state funding, threatening rural hospitals’ survival and access to care for low-income children and seniors. Medicaid covers 1.2 million children, people with disabilities and low-income adults in Colorado, at a cost of $7 billion in sta te funds and $9 billion from the federal government. But it already pays health care providers less than commercial insurance, and providers who don’t focus on safety-net care say it fails to cover their costs, even before possible cuts. Some doctors with high exposure, such as pediatricians, could limit the number of Medicaid-covered patients they take to reduce the damage from rate reductions, worsening access to care for low-income families. Rural hospitals and nursing homes largely don’t have that option, however, and could close if cuts go too deep. Technically, nursing homes could limit the number of residents covered by Medicaid that they accept, but that isn’t realistic, because so few people can pay the full cost of long-term care out of pocket, said Doug Farmer, president and CEO of the Colorado Health Care Association, a nursing home trade group. “It’s not even remotely feasible to stay afloat without Medicaid,” he said. “Major cuts to core Medicaid are an existential threat to long-term care.” Colorado lawmakers have said they don’t want to cut Medicaid, but the program accounts for about one-third of the general fund budget, and the state faces a $1 billion shortfall in the coming fiscal year. (K-12 education accounts for another third of the budget.) The vast majority of Medicaid spending pays for care to patients, which makes it nearly impossible to cut the program without reducing rates and paying providers less. Gov. Jared Polis proposed reducing planned increases in rates, but such a move would be unpopular and might push some providers to stop seeing patients covered by Medicaid, also known as Health First Colorado. Even if the state somehow came up with a way to avoid making cuts to Medicaid, Congress is considering slashing the program. Republicans in the House of Representatives directed the committee that oversees Medicaid to make $880 billion in cuts over 10 years, but didn’t specify how it should go about that. Medicaid and Medicare are the two largest programs under that committee’s jurisdiction, and Republicans promised not to cut Medicare, leaving Medicaid as the only option for major budget reductions. States have to pass balanced budgets every year, and Colorado’s Taxpayer’s Bill of Rights prevents it from raising taxes to make up the difference, so lawmakers will have to cut something. The federal government doesn’t have the same obligation, so Congress could opt not to make cuts if all of the options prove unpopular. Polis tacitly acknowledged Thursday that the state can’t make up for major federal cuts, saying the proposed reductions “would throw 400,000 Coloradans off of their health care.” Proposals include having the federal government no longer pay 90% of the cost of covering the Medicaid “expansion” population, which includes any legal resident earning up to 138% of the federal poverty line, or $21,597 for a single person. The Urban Institute estimated states would have to come up with about $44 billion to keep covering that population, or about 11 million people could lose their insurance. The federal government typically pays half of the expense of covering Medicaid enrollees in Colorado who aren’t part of the expansion population. If it paid for the expansion population at that level, Colorado would have to either increase its Medicaid spending by almost 32% — a non-starter — or watch the state’s uninsured rate rise by 50%, according to the estimates. Colorado’s uninsured rate typically hovers around 6.5%, so if it increased by half, close to one in 10 residents would lack health insurance, causing problems both for those individuals and for hospitals that wouldn’t get paid if they needed life-saving care. Another idea would cap how much the federal government will pay for each Medicaid enrollee, rather than covering a percentage of whatever care they use. That would shift anywhere from $676 billion to $1.7 trillion in costs to the states over 10 years, according to the Urban Institute. For Colorado, that would mean a loss of between $11 billion and $31 billion in federal funds, out of $107 billion the state expects to receive over the next decade. Speaker of the House Mike Johnson, of Louisiana, said in late February that Republicans wouldn’t change the federal government’s contribution, but would focus on ending “waste and abuse,” according to Politico. He didn’t offer any details about how he defined waste and abuse, or how lawmakers would end it. The debate comes in the aftermath of Medicaid “unwinding,” when states had to determine how many people no longer qualified at the end of the COVID-19 public health emergency, following a three-year pause in assessments. About 514,000 people dropped off in Colorado, and health care providers said they’ve seen increases in uncompensated care as more patients showed up without insurance. Some recipients may have reenrolled later. Medicaid cuts could be politically difficult, though Colorado’s budget shortfall means the state has no easy options. A poll from KFF, a nonprofit that researches health policy, found only about 17% of all Americans, and about one-third of Republicans, want reductions in Medicaid funding. Konnie Martin, CEO of San Luis Valley Health, said she holds out hope that lawmakers will improve Medicaid while protecting providers, especially in rural areas. “I know the state budget is in a very tough place,” she said. “We work really hard here to find good solutions, take care of our communities.” “If I don’t have Medicaid, I’m not here” Any Medicaid cuts would fall disproportionately on rural areas. A Georgetown University report estimated about 37% of children and 18% of working-age adults living in non-metro areas of Colorado get coverage through Medicaid. (In metro areas, 33% of children and 15% of adults under 65 do.) On average, people in rural areas have lower incomes and are less likely to have employer-sponsored insurance than those living in urban areas, said Joan Alker, a research professor at Georgetown University’s McCourt School of Public Policy. That leaves rural hospitals with less ability to take a financial hit if governments cut Medicaid, potentially pushing some toward closing, she said. The southeastern corner of the state and the San Luis Valley have even higher rates of Medicaid coverage. About 30% of the revenue at San Luis Valley Health’s two hospitals and five clinics comes from Medicaid, Martin said. The health system already faces financial challenges since about 7,000 people in the region lost Medicaid coverage, with most becoming uninsured, she said. The organization typically has about a 1% profit margin, which is relatively good for rural health care, Martin said. Still, that leaves no room to absorb significant cuts without getting rid of services, she said. “Medicaid is essential to my (hospitals’) survival,” she said. “If I don’t have Medicaid, I’m not here for the commercially insured individual.” If the hospitals in Alamosa and La Jara had to cut services, patients would have to drive to Pueblo or Durango to deliver babies or undergo surgery, Martin said. That would push more people to move away, undermining both the hospital and the local economy in general, she said. “It is essential that these services we provide here stay here,” Martin said. Dr. Laura Luzietti, left, exams Kalie Brown, age 1, on her father Angelo’s lap, at Every Child Pediatrics in Denver on Wednesday, March 12, 2025. (Photo by Hyoung Chang/The Denver Post) Longer waits for children Care to children also would take a harder hit compared to health services for adults. Medicaid covers more than one-third of kids in Colorado and pays for about two out of every five births in the state. Dr. Cassie Littler, president of the Colorado chapter of the American Academy of Pediatrics, said some practices will have to restrict the number of Medicaid patients they see if the state cuts rates. Children already wait about three months to see a pediatrician at federally qualified health centers, and a shortage of pediatric providers would likely get worse if some offices stop taking new patients covered by Medicaid, said Dr. Autumn Orser, a pediatrician at Peak Vista Community Health Center in Colorado Springs. Infants and toddlers develop so rapidly that a few months’ delay can be the difference between catching a problem early and letting a child fall further behind, said Dr. Laura Luzietti, executive director of safety net clinic Every Child Pediatrics. Regular care is particularly important because conditions such as iron-deficiency anemia and high blood lead levels can damage children’s brains, but aren’t always obvious without screening, she said. “The earlier we intervene, the more successful the intervention is,” she said. Pediatricians have added people like resource navigators and community health workers to help patients address their health-related needs, such as inadequate housing or an inability to afford healthy food, Orser said. But they can’t bill for those services, meaning that they’re among the first things to go when budgets get tight, she said. “With Medicaid cuts, that (assistance) doesn’t happen,” she said. “If my services went away, what do I do?” Medicaid cuts could cause even greater problems for providers serving older adults and those with disabilities. Medicare and private insurance don’t cover long-term nursing home stays or the kinds of services that allow people to age in place, meaning those without significant bank accounts generally rely on Medicaid when they can no longer manage on their own. The state likely will want to avoid cutting Medicaid rates, because providers drop patients when rates fall too low, said Eileen Doherty, executive director of the Colorado Geronotological Society. But the alternative is cutting services that Medicaid isn’t legally required to offer, such as dental care for adults and home- and community-based services, or capping the number of people who can receive those services, she said. Federal law requires Medicaid to cover nursing home care, but not alternative services to keep people in their homes. Nonetheless, states have tried to fund home- and community-based services, which people with disabilities tend to prefer and which are cheaper than a nursing home bed. Curt Wolff, of Thornton, said Colorado’s Medicaid buy-in has allowed him to get the care he needs to stay in his home and continue working. Wolff lost the ability to use his arms and legs after surviving West Nile virus in 2012, and now relies on hired help to get out of bed and for personal hygiene. The buy-in program allows people with disabilities requiring extensive assistance to receive that help on a sliding fee scale, without giving up most of their income and assets to become eligible for Medicaid. Colorado funds it via a fee on hospitals to draw down matching federal dollars, a practice that congressional Republicans are considering banning. Wolff works part-time training other people to hire and manage their home health workers and owns a small business selling equipment that allows people in wheelchairs to bowl. He said his health is better than it would have been if he had to move into a nursing home — which Medicaid also would have paid for, after he exhausted his savings. “I can get the care I need and still be productive in society,” he said. Most people avoid entering a nursing home until some sort of crisis, such as a major injury, prevents them from going home, Doherty said. They wouldn’t immediately need to go to a facility after losing their support services, but could end up in one sooner than they otherwise would have, she said. “I think a significant percentage of them would cobble services together as best they can, or do without,” she said. Nursing homes statewide have about 4,000 beds available, but might not be able to hire the staff needed to take that many new residents, said Farmer, with the Colorado Health Care Association. If cuts to home- and community-based services came paired with reductions in rates paid to nursing homes, most homes probably couldn’t take any new residents who can’t pay out-of-pocket, he said. Medicaid is the largest payer for long-term care, covering about two-thirds of nursing home residents in the state, Farmer said. Unlike some doctors, most homes couldn’t limit admissions of Medicaid-covered residents, and would have to close if rates didn’t cover the cost of caring for them, he said. Jill Vitale-Aussem, president and CEO of senior living organization Christian Living Communities, said their nursing homes and assisted living facilities have tried to operate as efficiently as possible since the pandemic started, which put them in a better position than some. Caring for low-income people is part of their mission, so they’d try almost everything else before restricting admissions of people covered by Medicaid, she said. Related Articles Health | Gov. Polis warns about Medicaid cuts by Congress, criticizes tariffs on Canada, presses for ICE transparency Health | Opinion: Don’t raid Coloradans’ unclaimed property to patch up the state’s broken budget Health | Seeking a “Plan B” under President Trump, some Coloradans make plans to move to other countries Health | Nearly $45 million in Colorado safety grants still frozen by Trump administration, officials say Health | Republicans once maligned Medicaid. Now some see a program too big to touch. “That would be a last resort,” she said. Of course, not all nursing homes could survive Medicaid rate cuts, particularly if inflation goes up this year, Vitale-Aussem said. By the time people need care in a facility, they typically have nowhere else to go, and any family they have may not be able to provide the care they need to stay safe, she said. “There’s a lot of ripple effects of people losing their homes (if a nursing home closes), of hospitals backing up because there’s nowhere to send people,” she said. If Colorado does make cuts to long-term care services, people who need help will need to figure out how to create informal support networks, Doherty said. That could mean leaning more on their family and neighbors, or paying for services such as grocery delivery and transportation — not an easy thing, as President Donald Trump’s tariffs push prices up in general, she said. “We need to get people thinking about, ‘If my services went away, what do I do?’ ” she said. “People may have to reprioritize how they spend their monthly limited income.” Sign up for our weekly newsletter to get health news sent straight to your inbox. ...read more read less