Colorado braces for $858M healthcare shift as feds pull back Medicaid, SNAP funding, prompting special session

By Marissa Ventrelli | Colorado Politics

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.

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