DENVER — Colorado's Medicaid program is projected to be roughly $443 million over budget this fiscal year, which is the latest figure to illustrate what has frequently been called unsustainable growth in the state system.
Lawmakers on Colorado's Medicaid Commission were debriefed on the budget forecasting error on Thursday, where frustration about finances and concern over future cuts collided.
"We are talking about issues that are literally life and death for people," said state Rep. Kyle Brown, D — District 12. "Our budget situation is unique across the country, but the problems of Medicaid are not. Many states are seeing this same trend, increasing costs and revenue that is not increasing nearly as fast, and that's what we're facing — and the problem that we're trying to solve.”
Watch Colette Bordelon's report in the video player below:
The materials from the Office of State Planning and Budgeting (OSBP) also show that last fiscal year, Medicaid overspent by an estimated $159 million.
The state's Medicaid program has grown at a larger rate than any other portion of the budget. It is administered by the Department of Health Care Policy and Financing (HCPF).
A number of factors have led to the skyrocketing cost of the Medicaid program. Those include more people utilizing the services, an increase in provider rates, and medical inflation that has meant higher prices for long-term care, prescription drugs, and behavioral health care.
If no action is taken to rein in Medicaid spending, state officials warned that it would crowd out most other spending by 2039-2049.
"We have to have more than just Medicaid in our state, right? We need roads, we need schools, and so figuring out how to deal with the increased costs, the services that people need, is our principal challenge here," Brown said. "This is part of the problem: is that when Medicaid sneezes, the whole budget gets the flu.”
In the HCPF presentation, the department took accountability for the cost growth and accepted responsibility for overspending last fiscal year, in addition to the expected increase in cost for this fiscal year.
State Sen. Kyle Mullica, D — District 24, read aloud HCPF's mission statement during the meeting: "to improve health care equity, access and outcomes for the people we serve while saving Coloradans money on health care and driving value for Colorado."
"We're not doing that," Mullica said. “We have been dealt a s--- sandwich. We are trying to figure out how to do this. We are battling multiple fronts. There's impacts of H.R.1, there's impacts of the cost of healthcare on our state, and now we're battling a front of forecasting errors. The minimum that I'm asking as a member of this body — I'll speak for myself — is that we don't make it any worse. And I don't think that's a lot to ask.”
The new projections also showed that year-over-year growth of the Medicaid budget from 2025-26 to 2026-27 is expected to be 9.6%, which is up from 4.7% in the previous forecast.
State Sen. Barbara Kirkmeyer, R — District 23, was not shocked by the persisting issues surrounding Medicaid funding, saying that the impacts of many of the cuts made by the legislature in the previous session have not yet been fully realized.
“We've all said this: forecasts are always wrong. They're just pretty much our best guess at what's going to happen," Kirkmeyer told Denver7. “The budget just keeps getting tougher because you have the emotional side of it, and it is hard to make cuts to programs that are extremely important to families and children for their medical care and their well-being and their emotional care. But they're going to have to be made.”
Parents of children who live with disabilities, including Casey Barrett and Leeah Broms, attended Thursday's hearing.
"They're concerned with fraud, waste, and abuse, and so much waste is happening within the department itself. The call is coming from within the house, is what we say," Broms said about HCPF. “There's so much that falls on HCPF's shoulders because they're the ones that are overseeing these programs, these policies, and they're not being held accountable because there's not enough oversight. And that's become really problematic and at the detriment of our kids.”
During HCPF's presentation, department leaders said they will focus their work in four key areas when trying to bring their spending in line with appropriations, while being guided by the health and safety of members.
Those four areas are:
1. Driving administrative efficiencies
2. Aligning benefits and services to maximize impact and value
3. Ensuring program integrity and fiscal accountability
4. Maximizing federal and non-general fund resources
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