Medicaid spending in Colorado is unsustainable, Gov. Jared Polis says

Gov. Jared Polis released his budget request for next year, and Medicaid will take a big hit. The governor says the health insurance program for low-income Coloradans is growing at nearly twice the rate of the state government overall.

Polis says, if the state doesn’t slow the rate of growth, the program will crowd out everything but funding for schools in the next few years.

In the state, 1.2 million Coloradans rely on Medicaid. The governor says none of them will lose coverage, but what that coverage looks like will change. 

“There’s two levers on Medicaid,” Polis said during a press conference. “One is how many people you cover, and two is what you cover.”

Polis’ budget request hones in on what services Medicaid covers.

“There have been a number of benefits that have been added in recent years,” Polis continued. “Some of those are not sustainable over time.” 

Polis’ budget would require prior authorization for more services, more cost sharing and new payment caps. 

“For instance, whereas dental benefits for adults was at $1,500 and then was uncapped, Polis said. “We are saying don’t go back to $1,500, but go back to a $3,000 annual cap.”

The governor says Medicaid is growing by nearly 9% each year, double the rate of spending on other parts of government. He says it’s unsustainable. 

“The increases in Medicaid costs would crowd out essentially everything the state does,” Polis said. “We would largely just fund schools and do Medicaid — no money for roads, no money for public safety.”

According to the Colorado Department of Health Care Policy and Financing (HCPF), long-term care for older Coloradans and those with disabilities is driving the increase in costs. HCPF says it makes up about 5% of Medicaid enrollment but accounts for about half of all claims.

The state spends about $16 billion each year on Medicaid, which was projected to grow by $630 million this year. Polis’ budget provides about half that $300 million.

Polis also increases spending on K-12 schools by $276 million, universal preschool $14 million, and public safety by $10 million, while limiting higher education tuition increases to 2.6%.

Additionally, the governor set aside $8 million to $12 million to increase the number of civil commitment beds after CBS Colorado reporting on dangerous offenders with mental health issues being released. 

“We are holding money for a supplemental in this area and working with law enforcement and legislators on the policy and hope that we can bring that forward in January or sooner,” Polis said. 

The governor cut funding for 12 of the 17 state departments, saving about $25 million in all. Public safety saw the biggest increase — about $11 million.

Polis’ total budget adds up to nearly $51 billion, which is about a 6% increase over last year’s budget. Of that amount, $19 billion is the general fund, which is what lawmakers have most control over and where funding for Medicaid and K-12 schools originates.

The governor’s budget is a starting point. The Joint Budget Committee will make changes to it and send its budget to the Colorado House and Senate. They will make more changes before the final budget goes to the governor for his signature.