Understanding the Impact of Potential Federal Funding Cuts to Medicaid

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Updates on potential cuts to Medicaid

May 28, 2025

From HCPF Executive Director, Kim Bimestefer, Executive Director for the Colorado Department of Health Care Policy & Financing (HCPF):

“HCPF anticipates that the changes to Medicaid in the reconciliation package coming out of the House will result in large scale loss of insurance coverage for Coloradans due to the administrative hoops Coloradans will have to jump through to get covered and stay covered. We are also concerned with the extraordinary administrative burden for the state, the unrealistic timelines and the lack of funding to institute the additional administrative requirements. Last, the bill will result in increased uncompensated care for our health care providers, threaten the solvency of our rural providers, and increase costs for commercially insured Coloradans.

Provisions of the bill that increase the frequency of full eligibility redeterminations for Medicaid and CHP+ - from annually to every 6 months - would  cause people to inappropriately lose needed coverage. The current annual eligibility determination process is complex, so doubling its frequency will create an administrative burden that will impede people who qualify from retaining coverage. It further ignores the existing quarterly, automated processes already in place to ensure people on the rosters still qualify, while removing individuals who don’t.

We are also very concerned about provisions that may limit the ability of those who no longer qualify for Medicaid or CHP+ to move to affordable coverage options through the Connect for Health marketplace exchange. Shortening open enrollment times and creating barriers for those leaving Medicaid to gain other coverage impedes access to coverage that has been a lifeline to many and a means to enable people to rise out of poverty.

All these aspects of the reconciliation bill will increase Colorado’s uninsured rate, negatively impacting the health of the population as Coloradans delay needed care because they can’t afford it while increasing personal debt and bankruptcy as individuals use emergency room care in desperate circumstances. The higher uninsured rate will also result in increased uncompensated care to health care providers across the state, destabilizing our rural hospitals, and increasing insurance rates to those covered by commercial insurance as health care providers shift uncovered expenses.

Colorado already employs a range of best practices to prevent fraud, waste and abuse within our Medicaid program. We have a fact sheet available on this topic. Additional federal requirements could be onerous for the state and local governments that administer the program, and could result in people losing coverage simply due to added paperwork burden.

We are hopeful that during their deliberations, the Senate will address concerning provisions like barriers to enrollment, unrealistic timelines, additional administrative burdens, access to care for transgendered individuals, women’s health care services, and coverage for undocumented children and pregnant women when using state-only funds.

The cost of health insurance coverage in the U.S. is an outlier compared to all other nations. If the federal government wants to find efficiencies, it needs to focus its energy on driving down the U.S. cost of health care and health insurance, to the benefit of the Medicaid, Medicare, TriCare, the federal budget, state budgets, employers and all Americans. Instead of properly addressing the core challenges, the House has passed a bill that creates administrative barriers intended to impede low income children, adults, and people with disabilities from having health care coverage. We are saddened by this approach.”

April 22, 2025

Kim Bimestefer, executive director of HCPF, shares what you need to know about the current situation, the future outlook and how HCPF is working to mitigate the impact of budget cuts.