DENVER (AP) - Colorado officials are scrambling to figure out what may happen to the $5 billion or so the state gets from the federal government each year to cover Medicaid.
A proposed health care overhaul moving through Congress would have dramatic effects in Colorado, which was one of 31 states to make it easier to qualify for Medicaid, government-covered health insurance for the needy.
Colorado now has some 1.3 million people on Medicaid, nearly double the amount of patients covered before the federal government offered to pick up the tab for adding more folks to the plan.
That federal money was always intended to taper off, but a bill pending in the U.S. House would cut that support much sooner. That enhanced federal match for Medicaid expansion enrollees would be cut from 90 percent to about 65.5 percent in 2020. Colorado would have to spend about $1 billion a year make up the difference, or else kick patients out of the program.
Colorado politicians from both the left and the right say the prospect of declining federal Medicaid support demands immediate action. But they have vastly different ideas about what to do.
Democrats say the Obamacare replacement must be stopped or changed to ensure that people don’t lose coverage. Republicans say Colorado needs to start trimming Medicaid costs now and consider dismantling its health insurance exchange.
As Colorado lawmakers start considering next year’s budget in coming weeks, health care uncertainty may dominate debate. Though the spending plan doesn’t yet make significant changes to account for federal health care cuts, expect a lot of arguing over whether it should.
Democratic Gov. John Hickenlooper and Democrats ruling the state House don’t want to see deep cuts before knowing exactly how many dollars are going away.
Even a lightning-fast adoption of the federal health care overhaul likely wouldn’t require drastic Colorado spending changes before the summer of 2018, when the next Colorado budget expires.
“There are a lot of details that are yet to be ironed out,” said Marc Williams, spokesman for Colorado’s agency that administers Medicaid. “It’s still very early in the game to have specific numbers about what will change.”
But that’s not sitting well with conservatives who have argued for years that Colorado is headed for serious budget problems if it doesn’t trim health care spending.
“It’s not the right economic model to put laws into place that hold the line,” said Sen. Kevin Lundberg, a Republican who sits on the powerful budget-writing committee. “Costs are out of control and they’re just going to go up and up and up.”
One Republican idea: Get rid of the state health insurance exchange, called Connect For Health Colorado. Republicans say the change could save Colorado some $40 million a year, with health insurance shoppers simply using federal or private-sector resources to buy health insurance.
But the proposal to dismantle the exchange faces almost certain doom in the House, where ruling Democrats consider it a premature broadside on Obamacare.
Outside the state Capitol, health care analysts are gearing up for a long fight over Colorado’s plans to prepare for health care changes coming from Washington.
“The cuts would be so dramatic they would really taint state budgets,” said Adam Fox of the Colorado Consumer Health Initiative, a Denver-based nonprofit that supports the current health care law.
For now, Fox said, there’s not much states can do to be ready for drastic federal changes.
“There’s really very little state budget writers can do to accommodate any of these cuts,” Fox said.
Obamacare critics disagree.
Linda Gorman, a health policy analyst for the Independence Institute, a Libertarian think tank in Denver, argues that Colorado should start planning now for reduced federal health care spending.
“Colorado’s Medicaid program isn’t sustainable even at the current level, not without substantial tax increases,” Gorman said.
But she’s not optimistic that Colorado’s divided Legislature will settle their health care differences this year.
“I think ’heads in sand’ is the way people would rather deal with this,” she said.
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Kristen Wyatt can be reached at https://www.twitter.com/APkristenwyatt
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