A Note to Colorado Policymakers
As the legislative session gains steam, Colorado lawmakers face a daunting double-edged sword. On one side is a state budget shortfall of nearly a billion dollars. On the other is the likelihood of major federal changes that could dramatically slash crucial funding to our state.
Given this delicate and dangerous sword, state policy must be crafted more carefully and cautiously than ever. In the health care space, the current level of uncertainty and financial instability means we cannot experiment with policies that would reduce the resources needed for patient care for Coloradans. It is simply a risk we cannot take.
The hospital community understands Colorado’s budget challenge. Health care leaders develop and manage tight budgets – often with deficits – every day. And they do it in a difficult environment. For instance, if the budget tracks the Governor’s proposal, hospitals will get no increase in Medicaid payments. Despite 2025 costs already growing by double digits, Medicaid only pays 79 cents on the dollar.
Meanwhile, hospitals finance coverage for 427,000 Coloradans on Medicaid. They absorb charity care costs for people who can’t afford care and help draw down vital federal dollars. In fact, through discounts, subsidies, and fees, hospitals contribute more than $5 billion annually to boost coverage and improve affordability for Coloradans.
Against this financial backdrop, 70 percent of Colorado hospitals operate with small or negative margins, which means there is little, if any, money to re-invest in patient care including updated equipment. And hospitals and health systems are at times forced to close or curtail services when resources are no longer there. Here is one such recent example.
With these challenges alone, the odds are stacked against hospitals and the patients and communities they serve. Factor in federal funding cuts gaining traction in D.C. estimated at $3 billion, and the result could be catastrophic. I don’t use that word lightly. I use it here because patients statewide could lose access to health care if even some of the proposed changes go into effect.
Just one example: capping federal Medicaid dollars to each state would force Colorado to pick up far more of the tab for health care – or reduce coverage and access. With the state facing an $850 million budget gap that scenario is untenable.
Instead, we encourage a measured approach rooted in caution to acknowledge the very real political and fiscal moment we are in. The hospital community stands ready to engage in discussions around policies that make sense and that would strengthen, not weaken, our safety net.
It is tempting to enact laws that claim to reduce health care costs. But how those laws would actually work is important. Bills passed this session need to mitigate our risk, not compound it. Mishandling the double-edged sword will harm patients, providers, and our state.
Jeff Tieman,
CHA President and CEO