Colorado legislators met at the state Capitol on Friday morning to review how the recently-adopted federal budget will affect health issues in the state.

The review is among the steps lawmakers are taking in preparation for an expected special session. Multiple sources have told Colorado Politics that the special session will take place during the week of Aug. 18.

Friday’s meeting wasn’t publicly announced on the legislature’s website; the General Assembly had earlier cut funding for many interim committees due to budget constraints. 

Senate Democrats announced on their website an “informal meeting” of the Senate Health and Human Services Committee, which drew a dozen lawmakers and dozens of lobbyists, journalists and others to the Capitol to hear what the state will face federal following changes to Medicaid, the Affordable Care Act (ACA) and Supplemental Nutrition Assistance Program (SNAP).

While Senate Democrats made the announcement, three Republican senators, all members of the health committee, also attended. So did three House Democrats who sit on their chamber’s health and human services panel.

The meeting was not livestreamed nor recorded, due in part to the lack of legislative council staff who do that work and who would have to be paid.

The daily cost of a special session, as estimated in 2023, is just over $24,000 per day. That doesn’t include per diem costs that all 100 lawmakers are entitled to claim when meeting at the Capitol. Lawmakers who live 50 miles or less receive $71 per day; those who live more than 50 miles away get $254.

Those amounts increased on July 1, the result of legislation from 2024.

Next week, the executive committee of the legislative council, the six-member group of legislative leaders, is expected to discuss the special session and meet with state economists, including from the governor’s office, to go over the numbers.

That’s the first step in figuring out how much the legislature will have to cut out of the current fiscal year’s budget.

A $700 million budget hole?

An estimate of $700 million, tied primarily to federal changes in tax policy that affect state revenue, is expected to be on the agenda.

At Friday’s meeting, policymakers looked at the healthcare issue: Most are changes that state lawmakers aren’t going to have to deal with until the 2026-27 budget.

The federal budget will slash federal Medicaid spending by $900 billion over 10 years through new restrictions on eligibility, financing and payment, with states now responsible for shouldering much more of the costs for some of those services.

Specifically, estimates said the biggest chunk of federal savings would come from the work requirements to maintain Medicaid eligibility: the adults in the “expansion” population would now have to complete 80 hours of work or community service activities each month or the meet exemption criteria.

The debate comes as Medicaid costs have risen under the Affordable Care Act. Forty states, including Colorado, and Washington D.C. expanded Medicaid eligibility under Obamacare. One study said the federal government has paid for an increasingly larger share of Medicaid expenses, with the “Obamacare” expansion responsible for much of that shift. 

Critics have argued that changes are necessary to address increasing costs and ensure the long-term sustainability of the program. They also pointed to the nation’s $36 trillion debt, as well as the federal government’s $1.8 trillion deficit from the previous year. Supporters of Medicaid expansion have argued it was necessary to finally provide health insurance to millions of Americans. Democrats now say millions would lose coverage if states do not step in to fill the gaps.

The federal law reduced access to SNAP and increased the state share of costs. Insofar as the Affordable Care Act, eligibility would be narrowed for premium tax credits, along with increasing documentation requirements.

Citing estimates, Dawn Joyce, senior vice president for Impact Health Policy Partners, said that, by 2034, the number of uninsured would increase by 15 million from changes to Medicaid and the Affordable Care Act. 

She said changes to Medicaid will come in three categories: eligibility and coverage, state financing and administration and healthcare provider reimbursement.

For Colorado, the biggest impact will come from a cap on provider taxes, which help fund the state’s share on Medicaid, eligibility changes, work requirements, more frequent eligibility re-determinations and increased uncompensated care.

Joyce noted that a moratorium on new or increased provider taxes is already in effect. Existing provider taxes will be capped at 3.5%.

Colorado’s chief provider tax is the Colorado Healthcare Affordability and Sustainability Enterprise (CHASE), which brings in $3.6 billion per year and helps to insure 427,000 Coloradans. CHASE, formerly the hospital provider fee, is collected from hospitals, matched with federal dollars and then redistributed to hospitals based on Medicaid utilization and uncompensated care.

A reduction in CHASE between 2026 and 2032, from 6% to 3.5%, would result in a $10.4 billion loss just for Colorado.

Under the federal law, the state will also have to bear more of the burden for administrative and other costs, including requiring a higher co-pay for those enrolled through the Medicaid expansion.

A stopgap for rural health care 

There is a stopgap for rural health care — $50 billion over five years, known as the rural health transformation fund that is intended to protect rural hospitals. That’s about one-third of what rural hospitals and healthcare providers are expected to lose from Medicaid cuts under the OBBBA.

Among the impacts to the Affordable Care Act is limited eligibility for the subsidies currently provided for ACA-affiliated health insurance, provided through Connect for Health Colorado.

The federal law also prohibits green card holders, who are lawful permanent residents, from enrolling in subsidized insurance over the next five years, beginning in 2026, and ends any subsidy for refugees, asylum seekers, survivors of domestic violence and human trafficking with pending or approved lawful status, valid visa holders and people with “temporary protected status” beginning in 2027.

Changes to SNAP, the federal food stamp program, included modifications to work requirements for those without dependents under the age of 14 (previously it was dependents under 18), and removal of exemptions for homeless people, veterans or those who have aged out of foster care.

The law also immediately removed eligibility for all non-citizens, except for green card holders, Cuban and Haitian immigrants and nationals of three Pacific Island countries.

Notably, in October 2026, the state will be required to increase its share of administrative funding from 50% to 75%. The federal law will increase by 10% the state’s share of paying for SNAP benefits, based on Colorado’s payment error rate of 9.97%.

Critics of Medicaid have said the program is riddled with improper payments or payment errors. A recent federal audit said Colorado made an estimated $7.3 million in capitation payments between 2018 and 2020. The payments had continued for thousands of Coloradans months after their deaths because of outdated reporting and system delays, state officials said, adding they have recouped some of that money.

Advocates: Work requirements hinder access without improving outcomes

During Friday’s hearing, legislators also heard from several health care advocates.

Adriana Hidalgo, executive vice president for Healthier Colorado, said the Medicaid changes will make healthcare more expensive and harder to find for everyone.

“These cuts are too big and drastic for anyone to dodge their impact,” she told the committee.

Adam Fox, deputy director for the Colorado Consumer Health Initiative, estimated that nearly 300,000 Coloradans will see an increase in their out-of-pocket premiums of 50% or more, and some in rural Colorado could see increases of 100%.

“All of these changes will lead to an estimated 40% of the nearly 300,000 Coloradans enrolled losing coverage as it becomes unaffordable,” he said.

Bethany Pray, chief legal and policy officer for the Colorado Center on Law and Policy, said the Coloradans who will lose coverage would be the people who struggle with technology, paperwork, time management, or who work in non-salaried jobs or do gig jobs. She also pointed to older Coloradans with complex health issues who lack transportation or internet and who are most likely to miss a deadline or fail to upload a crucial document.

Changes in SNAP will affect some of the 600,000 Coloradans who rely on the program, according to Anya Rose, director of public policy for Hunger Free Colorado. The changes could come with $50 million more in administrative costs for Colorado, beginning next year, and in 2028, a greater share of the costs for food benefits, about $130 million, she said.

The enhanced work requirements under SNAP could cost Coloradans their benefits, she said, claiming the work requirements increase the administrative burden without improving employment.

The Colorado Blueprint to End Hunger’s Brace Gibson told the committee the “fundamental changes” to the program’s structure directly harm communities that face the most significant barriers to food security: children, older adults, people with disabilities and working families across Colorado who are at risk of losing benefits.  

Trump and allies: Medicaid changes root out waste, preserve coverage for most vulnerable Americans

Trump and his allies have defended the federal budget, saying the Medicaid changes strengthen the program for those who rely on it, such as pregnant women, children, people with disabilities, and low-income families, while “eliminating waste, fraud, and abuse.”

They said that improper payments for Medicaid, for example, have exceeded half a trilling dollars in 10 years.

In a White House memo, the Trump administration insisted that the federal changes would protect Americans’ eligible to receive welfare — because, by eliminating waste and abuse, resources could be “refocused on providing better care for those whom the program was designed to serve.”

And insofar as the work requirements, the Trump administration said it applies only to able-bodied adults who don’t have young children.

“The One Big Beautiful Bill restores the dignity of work with historically bipartisan work requirements for able-bodied Americans. We are implementing commonsense, Clinton-era work, volunteer, education, or training requirements with broad bipartisan support,” the administration said.