Polis Plans Special Session After Trump’s Budget Bombshell: Dems See Opportunity to Revive Agenda

By Ed Sealover | The Sum & Substance

Passage Thursday of the budget-cutting “One Big Beautiful Bill” essentially mandates that the Legislature will return to the Capitol for a special session this summer to deal with aspects of the federal law impacting Medicaid funding and artificial-intelligence regulation.

Gov. Jared Polis’ Office of State Planning and Budgeting estimates the bill’s reductions to Medicaid spending, food assistance and other benefits that are largely or partially federally funded will cut state revenues $500 million and boost state costs another $500 million. That will necessitate legislators to come back and re-balance the budget, likely by reducing funding to a number of other programs.

And before passing the bill, a bipartisan group of U.S. senators stripped from it another provision that some state officials and business leaders had hoped to see stay in it — a 10-year moratorium on states enacting artificial-intelligence regulations beyond federal law. That move is likely to restart talks between tech-industry executives and consumer advocates over how to soften regulations passed by General Assembly in 2024 — a subject that the Democratic governor has hinted we would add to any special-session agenda.

Polis and other elected officials joined with health-care leaders in recent days to plead with Republicans in the state’s congressional delegation to reduce the estimated $1 trillion in Medicaid cuts in the bill or just to reject the bill altogether. And while the requests were heavy with criticism of the general policy of the bill hurting the poorest Americans, they also carried undertones of another message: Colorado, specifically, cannot afford this.

How the federal bill upends Colorado’s budget

Much of the Medicaid savings will come from work requirements for Medicaid recipients that are expected to lead to 150,000 or more of those recipients losing their benefits — an exodus that likely will increase the number of uninsured patients getting care in hospitals. That will create economic costs: U.S. Sen. John Hickenlooper estimated that six or seven rural Colorado hospitals could close under the strain of drastically reduced Medicaid reimbursements, and Polis said it will shift costs to privately insured patients.

But the bill also cuts from 90% to 50% the portion of costs the federal government will pay for Medicaid enrollees between 100% and 138% of federal poverty level, meaning Colorado either must shoulder those costs or disenroll residents from the low-income insurance program. The hospital provider fee charged to overnight patients to draw down more federal money and enroll more people in Medicaid is expected to lose $10.4 billion over five years, Colorado Hospital Association President/CEO Jeff Tieman said in a newsletter this week.

Plus, states must now investigate and re-certify the eligibility of Medicaid recipients at least twice a year to continue getting federal funding. Polis said that Kim Bimestefer, executive director of the Colorado Department of Health Care Policy and Financing, estimated this will require hiring several hundred more state workers and upgrading state computer systems at a cost of $57 million.

“That money doesn’t come from nowhere,” the governor said during a Wednesday news conference. “It means taking money away from patients, hospitals and doctors and sending it to government bureaucrats processing paperwork.”

Legislators detail potential budget cuts

Another provision of the bill reducing the SNAP food-assistance payments going to states is expected to cost Colorado $175 million. Again, state legislators must determine whether to eliminate those benefits or shift money from elsewhere.

Colorado House leaders and Democratic Joint Budget Committee members sent a letter Tuesday to Republican members of the state’s congressional delegation laying out what they said were unpleasant options to have to try to make up for the loss of federal funding. Those include reducing the state’s earned-income and family-affordability tax credits, scaling back the state’s reinsurance program and increasing tuition for higher education after the school year has begun, they wrote.

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