If you thought Medicaid cuts wouldn’t affect you because you’re not on Medicaid, you couldn’t be more wrong.
In Colorado, health care of all types is so tightly wound up with Medicaid funding that it doesn’t matter if you’re actually a direct recipient of any of the $15 billion in health care funding that Medicaid provides in the state. If you’re going to ever need a hospital, a doctor, or a prescription, your care may well be in danger if these cuts take place. And if you live in a more rural part of the state, replace the words ‘in danger’ in that last sentence with ‘nonexistent.’
In a report released this month by the Colorado Hospital Association, the cuts currently proposed by Republicans in the U.S. House would remove a whopping $27.2 billion from the Colorado healthcare system over the next 5 years. For a system that operates on thin margins already, that kind of a jolt is a death knell.
“If you take that much money out of our health care system, what will be left?” asks Adam Fox of the Colorado Consumer Health Care Initiative.
The numbers are telling.
Right now, a third of Colorado’s entire state budget goes to pay just the state portion of Medicaid. On average, the state pays 43 cents for every 57 cents the feds kick in. In 2023-2024, the feds paid $8.6 billion into the system, and the state was left to pick up the rest, at $6.4 billion, according to documents from the Legislature’s Joint Budget Committee. That’s an average. Some Medicaid programs are funded 90% by the feds and 10% by the state; others have varying rates of match. Regardless of the funding recipe, if the feds slash their funding, Colorado has no way to make up the shortfall, given TABOR, and it will just have to close doors and end programs. People who previously had access to care will no longer have that access. Providers who rely on a certain level of business to sustain their practice or facility or hospital, will have to close their doors.
In Colorado, Medicaid covers one in seven adults, one in three children, three in five nursing home residents, and three in 10 people with disabilities. Closing doors and programs will mean pregnant women, the disabled, poor kids and families won’t get care. That’s a given (and it is a serious issue) – but Medicaid impacts much more than these commonly cited cohorts. And that may come as a surprise to many Coloradans.
Here’s a look at three areas that aren’t usually equated with Medicaid, and the reason why Coloradans not receiving direct Medicaid support will feel the pain if these cuts go through.
- Medicaid Cuts Could Cause Nursing Homes to Close Because Most Coloradans in Nursing Homes Are on Medicaid
Most people think of Medicare — not Medicaid — as the federal program covering of elder health. But Medicare doesn’t pay for long-term care. Coloradans who are 65 or older and require long-term care either need to self-pay or rely on Medicaid. And such care constitutes a significant expense.
Of all the nursing home beds in Colorado, Medicaid pays for 61% of them. Some of these nursing home beds are filled by Medicaid recipients who are disabled from birth, or at an early age. But many are filled by aging Coloradans, enrolled in Medicaid, who never considered themselves as low-income and who now qualify because the high costs of health care drained their savings accounts. Nursing home care in Colorado costs an average of $10,000 a month for a shared room, or $120,000 a year. Even the most diligent saver can easily exhaust their nest egg with an ongoing expenditure like this.
As a result of the staggering costs of nursing home care, a disproportionate amount of Medicaid expenses goes to older people. Adults 65 or older make up only 3% of Colorado’s Medicaid recipients but spend 16% of the state’s Medicaid budget.
“Unless you’re independently wealthy, you’re going to need Medicaid [if you become disabled due to advancing age],” says Bonnie Silva at the Colorado Health Care Financing Agency.
This broad-reaching influence, the fact that Medicaid is paying for three of every five nursing home patients, means that if deep cuts are made to Medicaid, nursing home facilities may be faced with cutting services or shutting down altogether.
“Most providers are operating on that ledge,” says Silva, “It won’t take a lot to push them over.”
And while Colorado’s TABOR law allows the state budget to grow by rate of inflation multiplied by population increase, it does not account for medical inflation (always higher than standard inflation), nor does it consider an aging population with ever-increasing demands on the system. Thus, even when they’ve been fully funded by the federal match, Colorado state expenditures on long-term care have been rising fast and started exceeding revenue five years ago.
This tenuous situation is only exacerbated in rural areas, where the population is more likely to rely on Medicaid. There are already 15 rural communities that have no nursing homes at all. And rural communities tend to have a larger proportion of older residents. In Custer, Huerfano, Mineral, Hinesdale, and Ouray counties over 30% of the population is elderly.
Even if you or a parent is a private-pay patient in a nursing home, Medicaid cuts may mean that your nursing home has to close, raise costs, employ fewer professionals, or some combination of the three in order to serve a smaller number of patients with a smaller number of funds.
- Medicaid Cuts Could Cause Hospitals To Close
It’s not a big secret that hospitals in Colorado are already struggling. In the past few weeks, four Colorado hospitals announced they were cutting services or closing down entirely, according to the Colorado Hospital Association, which also reports that almost three-quarters of Colorado’s hospitals are barely breaking even.
“Cuts to Medicaid of any size could be devastating … really for all the hospitals in our state,” says Cara Welch with the Colorado Hospital Association.
The story just gets worse as you move into more rural Colorado. Of Colorado’s 88 acute-care hospitals, 43 are in rural areas. Thirteen counties in Colorado do not have a hospital at all. When they do, in rural areas, the hospital is usually the largest employer and the biggest economic driver in that area. It is also, in 85 percent of the cases, operating without what is known as “sustainable” margins. Which means, it won’t survive even the smallest bump in the road.
And Medicaid is what is keeping it afloat.
In Colorado, rural hospitals delivered nearly 5,000 babies, saw half a million outpatients, stabilized 310,000 emergency patients, and cared for 34,000 inpatients in 2023. Medicaid was the direct payer for about 35% of the rural patients and the indirect underwriter for the rest. Just as in nursing homes, Medicaid patients bring with them a guarantee of payment (even if it is less than many providers would like.) Medicaid generally pays about 2/3 of what Medicare pays). If hospitals that are barely making it as it is suddenly lost a big piece of a third of their clients, closures are all but guaranteed.
In the congressional district represented by Lauren Boebert, for example, which encompasses the Eastern Plains, the impact would be grave. Already there are no rural emergency hospitals there, no rural surgical centers, no psychiatric hospitals, and only two short-term acut-care hospitals. If Congress and Trump makes broad cuts in Medicaid funding, the perilous existence of those overloaded acute-care hospitals may come to an end. Representative Boebart’s office did not respond to an email request for comment. [MD11]
In U.S. Rep. Gabe Evans’ (R-CO) congressional district north of Denver, which is mostly urban and suburban, approximately 25% of the population is on Medicaid. The five short-term acute-care hospitals in the district are dependent on it. As are most of the 18 nursing home facilities. Evans’ spokesperson, Delanie Bomar, refused to comment on the proposal to cut Medicaid, noting in an email to the Colorado Times Recorder that unless the article covered the entirety of the federal budget, including border security, it “has the potential to be a slanted piece that neglects the full picture of the budget.”
- Medicaid Cuts Could Cause Health Insurance Prices to Rise
You may be on Medicaid and not even know it. Medicaid goes by a lot of different names across the country because states often hire private insurers to run the program. In Wisconsin, Medicaid is known as Badger Care Plus, in Connecticut it goes by Husky Health. In Colorado, it’s Health First Colorado.
If you make less than 138 percent of the poverty line (that’s $21,597 for a single person and $36,777 for a family of three) chances are you qualify for a plan under Health First Colorado. That plan will pay for preventative care visits, vaccinations, hospitalizations, the works.
If you earn more than 138% of the poverty line, you can purchase insurance on Colorado’s insurance marketplace.
Insurance purchased through the marketplace is not Medicaid, even if federal subsidies are helping to keep costs down. However, both the Medicaid population and privately insured “Marketplace” consumers make the health system more stable in Colorado.
Studies have shown that when people have health insurance and can get preventative and ongoing care, the cost to the health care system is less. That’s because waiting until a crisis happens and getting care in the emergency room is the least efficient, most costly way to deliver health care.
So, if more people don’t have health insurance, and health care costs go up, the price of insurance will also go up.
In Colorado right now, 1.1 million people are insured by Medicaid under Health First Colorado. This is approximately 25 percent of all health care consumers in Colorado, and more than even those insured through commercial, private insurers (approximately 23%).
Considering the large number Medicaid recipients, it’s hard to imagine deep cuts not affecting the health care economy: the primary care practices, outpatient clinics, surgical centers, pharmacies – and more, according to experts.
“Medicaid is fundamental for how our health care system operates here in Colorado,” says CCHI’s Adam Fox. “Any cuts to Medicaid really threaten health care for all Coloradans because it will put every single facet of our health care system in jeopardy.”
