Understanding the Impact of Federal Funding Cuts to Medicaid

Featured

Updates on federal cuts to Medicaid

July 3, 2025

Statement from HCPF Executive Director Kim Bimestefer in response to the passage of H.R. 1, the One Big Beautiful Bill Act (OBBBA)

“Health First Colorado (Colorado’s Medicaid program) members, providers and partners will be impacted by provisions in the recently enacted federal reconciliation bill, H.R. 1 known as the One Big Beautiful Bill Act (OBBBA).

The bill is anticipated to result in the large-scale loss of health insurance coverage for Coloradans and an extraordinary cost shift to our state that Colorado’s state budget cannot absorb.”

Health First Colorado – the state Medicaid program – members should know that the provisions impacting their coverage will not take effect immediately.

The provisions impacting program eligibility will not take effect until December 2026. That includes increasing eligibility renewals from annually to every 6 months and the new work requirements provision. Implementing these federal mandates will require significant IT system investments, staffing resources, industry and efficiency advances, massive communications, stakeholder engagement and more.

HCPF remains committed to improving efficiencies within our eligibility ecosystem while advancing automation to reduce administrative burden for our members, county partners and others impacted by the bill. Efforts will focus on our north star, which is to mitigate inappropriate health care coverage loss and the challenging downstreaming results, such as increased uninsured rates, poor health outcomes, medical bankruptcies, increased provider uncompensated care and the cost shifting that will increase commercial health insurance rates paid by Coloradans and employers.

Other provisions that will significantly reduce Medicaid and Children's Health Insurance Program federal funding, and therefore impact the state budget, will begin in October 2027.  These include provisions that decrease provider fees and related federal funding, which will propel difficult conversations necessary to balance program expenses with lower revenues.

We also recognize that these new federally mandated changes will impact all Coloradans, not just those served by our safety net coverage programs. Accordingly, we will collaborate with other state agencies and stakeholders to double down on efforts to mitigate the commercial health insurance price increases that will result from the provisions of this bill.

We will also advance and increase all efforts to mitigate the financial threats to doctors, hospitals, and other care providers - especially rural providers - that will occur as uninsured rates rise, driving increases in uncompensated care costs that will threaten care access, health care jobs,  and ultimately the solvency of certain providers.

HCPF will continue to communicate broadly and transparently with members and stakeholders on these and other issues, and in advance of changes to renewal obligations, processes, benefits or coverage.  As more is known, we will post updates on our federal resource center.