By Shaina Cole | Contributing Writer, Rocky Mountain Voice
Colorado Medicaid covered about 510,000 fewer people in an average month in fiscal 2025 than it did two years earlier. Estimated spending still climbed.
That is part of the puzzle a new legislative commission has been handed.
When the state unwound the pandemic-era rule that kept people continuously enrolled, average monthly enrollment fell roughly 30 percent between fiscal 2023 and fiscal 2025. Common sense says a program covering far fewer people should cost less. Colorado’s cost more.
A September brief from the Common Sense Institute puts the increase at an estimated $2.09 billion, a 15 percent jump.
Fewer members. Higher costs. Less room to move.
What the state pays per person
The clearest way to see what happened is to stop counting people and start counting dollars per person.
By CSI’s math, in fiscal 2023 Colorado Medicaid spent an average of $7,929 per member. Two years later that figure was $12,997. That is a 64 percent increase in average spending per member, in two years.
Part of the math is mechanical.
The people who left the rolls as continuous enrollment ended were disproportionately lower-acuity members who cost little to cover. The people who stayed use more care. But CSI points to reasons that go past the arithmetic of who left.
The state has enacted 182 health-care bills since 2019.
CSI estimates those bills cost Colorado $858 million a year, a figure it laid out in an earlier report on the challenges facing Medicaid and the state’s health department.
Higher payments to doctors, facilities and direct-care workers, plus heavier use of the most expensive benefits, push spending up even as the rolls fall.
Long-term care is the engine
Ask what is driving the growth and one category stands above the rest.
Long-term care and supports in the community and in facilities reached $5.3 billion in fiscal 2025. That is 35 percent of all Medicaid benefit spending. From fiscal 2019 to fiscal 2025, this one category accounted for 42 percent of all the growth in benefit spending over that period.
It is not the fastest-growing line. It is the biggest.
Home- and community-based care for people with intellectual and developmental disabilities rose 132 percent over that stretch.
Inside that number is a detail the state’s own consultants flagged.
The Governor’s Office and the Department of Health Care Policy and Financing commissioned a March 2026 report from Manatt Health. It found that spending on live-in caregivers topped $800 million in fiscal 2025, about 15 percent of all long-term care spending. The report used live-in caregivers as a proxy for family caregivers.
The department told the consultants it is concerned that provider behavior, including direct-to-consumer advertising and coaching on waiver eligibility and assessments, may be pushing enrollment and spending that does not always line up with what members need.
Big growth rates, small dollars
Some benefits grew far faster than long-term care. They just cost less in total.
Spending on pediatric behavioral therapy for children rose 650 percent from fiscal 2018 to 2024, while the number of children getting it rose 164 percent. Per recipient, the cost nearly tripled, from $11,340 to $32,250.
The state’s consultants noted that the share of children authorized for more than 40 hours a week climbed from 23 percent in fiscal 2022 to 34 percent in fiscal 2025, and raised a concern about the “financialization” of the service by private equity.
From fiscal 2019 to fiscal 2025, non-emergency medical rides grew 436 percent.
Eye-catching, but that line and children’s therapy together were only about 3.8 percent of benefit spending in fiscal 2025. A category that quadruples off a small base still adds fewer dollars than a giant growing 91 percent.
Higher spending does not by itself prove waste. Whether these increases track real medical need or looser standards is the kind of question the commission was built to ask.
The share of the budget
Zoom out from Medicaid to the whole state ledger and the pressure shows up in the numbers.
HCPF runs Medicaid.
By CSI’s count, the department grew from 27 percent of Colorado’s statewide operating appropriations in fiscal 2013 to a projected 41 percent in fiscal 2027, a 14-point climb over those years.
Measured a different way, against the state’s General Fund alone, the Manatt report found Medicaid and its companion children’s program had grown to one of every three dollars by fiscal 2025.
Both measures point the same direction: health care is claiming a bigger share of state resources.
The pressure lands hardest on the General Fund, where Medicaid already accounts for about one in three operating dollars and where the Taxpayer’s Bill of Rights limits how much revenue the state can retain and spend. As Medicaid costs rise faster than available state revenue, they squeeze everything else the state pays for.
Washington narrows the exits
Whatever the commission recommends, it cannot start from a blank page.
Colorado cannot simply drop benefits.
Federal law requires the state to cover hospital, physician and nursing-facility care, and to provide medically necessary screening and treatment for members under 21. The room to act is in optional adult benefits, how providers get paid and the rules governing how services are used.
The federal 2025 budget law, H.R. 1, also tightens the financing.
Colorado runs a hospital provider fee, collected through the Healthcare Affordability and Sustainability Enterprise, or CHASE, that charges most hospitals fees and uses the money to draw down federal matching dollars.
It is the kind of arrangement the federal law was written to scale back.
Federal law caps that fee revenue as a share of hospitals’ net patient revenue, and under the new rules that ceiling falls from 6 percent toward 3.5 percent, dropping half a point a year beginning in October 2027.
HCPF anticipates the change will cost the state $853 million in fee revenue and as much as $3.9 billion in federal funds by federal fiscal 2032, according to the March 2026 Manatt report.
What the commission has to do
The Commission on Medicaid came out of Senate Bill 26-187, which Gov. Jared Polis signed on May 29. It was carried by four prime sponsors, all members of the Joint Budget Committee that writes the state budget: Democrat Sens. Judy Amabile and Jeff Bridges and Democrat Rep. Kyle Brown, along with Republican Rep. Rick Taggart.
The law sets aside $500,000 and creates a panel of 10 legislators, including JBC members, the chairs of the House and Senate health committees and members of the minority party. The commission must meet at least six times and, by Dec. 11, send the legislature and the governor a report with its recommendations, including on the effects of H.R. 1.
One of the questions before it is how to slow the growth in Medicaid spending without cutting care people actually need, inside rules Washington mostly wrote.
The enrollment decline already happened.
Medicaid was covering about half a million fewer people in an average month, and the cost problem stayed standing.
Whatever comes next has to work on the dollars, not the headcount. The commission has until December to say how.