Cutting Medicaid: “I hate this” 

Plus: An Rx smackdown finally comes to the Capitol

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Mar 12, 2025 - 12:05
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Cutting Medicaid: “I hate this” 

Good midday to you, Colorado, and welcome to another edition of The Temperature, the only climate and health newsletter to notice what you’re doing with your hair there. It looks good!

I come to you from the groggy morning-after of a late night listening to the legislature’s Joint Budget Committee. (The committee, itself, didn’t go especially late, but it has an unfortunate knack for doing a lot of its work during kid school pickup and bath-time hours, necessitating some past-my-bed-time listening to the audio recordings.)

I think we can all stipulate that partisan politics has gone bonkers. But if you believe things are hopelessly broken, an antidote can be found in those many tedious hours of JBC members trying to figure out the budget.

Is it sometimes partisan? Definitely. Is there occasional grandstanding? You bet. But, mostly, there are six people talking about what they care about and why and trying to make it all fit together under a limited amount of money. And that beautiful banality is a reminder of what can be achieved by doing two things that we also pride ourselves on here at The Sun: listening to one another and seeing that we’re all in this together.

Or maybe that’s the huge amounts of caffeine in my bloodstream talking. Let’s just get to the news while my jittery hands can still type.

The Joint Budget Committee meets Jan. 6 at the Colorado Capitol complex in Denver. (Jesse Paul, The Colorado Sun)

It was roughly four hours into an arduous hearing of the legislature’s Joint Budget Committee on Tuesday — its second straight day of hearings focused on the state’s Medicaid budget — when Sen. Barbara Kirkmeyer’s patience burst.

“I know it’s tough,” she implored her colleagues. “I know it’s not fun to make these kinds of decisions. I don’t like to make them myself, either. But (Medicaid) is on its way to being 40% of our general fund budget.

“We can’t afford it.”

Money equals impact at the state Capitol, and if you hang around the building long enough you will hear plenty of proud stories from JBC members about the programs they helped build and the services they helped provide to Coloradans through their votes on the budget. But this year, with the state facing a $1.2 billion budget shortfall, the JBC’s role has flipped from raising up to cutting down.

On Monday and Tuesday, members of the committee went line by line with a cleaver through the bulk of the state’s Medicaid budget to find things to chop. And, yet, line after line, they found it difficult to lower the blade.

There was a proposal to save $1.6 million by capping the amount of dental services that Medicaid would cover each year for adults. The committee rejected it.

“I just can’t imagine denying care to people with pain in their mouths,” committee vice chair Rep. Shannon Bird said.

There was a proposal to save $6.3 million by reducing some of the higher-than-average rates that Medicaid pays for services like maternity care and dialysis. Also rejected. A proposal to scale back a payment rate increase to oral health care providers, saving $9.9 million. Nope.

A proposal to save $1.6 million by reducing how much is paid to providers of behavioral therapy for kids. Here even Kirkmeyer was opposed.

“I appreciate you’re trying to look for places to cut,” she said. “This is just not one of them.”

(All of these figures are savings to the general fund — the discretionary state dollars over which lawmakers have the most control. The cuts would reduce total spending by more, but only because the state would also receive less federal matching money.)

At one point, Eric Kurtz, the nonpartisan budget analyst for the JBC charged with suggesting possible cuts, joked sarcastically, “OK, I’m batting a thousand here.”

The Colorado Capitol in Denver reflects off a window in the Legislative Services Building across the street, which is where the legislature’s Joint Budget Committee meets. The scene was photographed Jan. 6. (Jesse Paul, The Colorado Sun)

As we’ve reported before, the nearly $16 billion budget in the current fiscal year for the state Medicaid agency, the Department of Health Care Policy and Financing, or HCPF, is more than a third of the state’s overall budget. Take out all the federal dollars that flow into the program and focus just on state money, and Medicaid is still the biggest agency — at $5 billion, it is the largest recipient of general fund dollars.

To find $1.2 billion in cuts this year to balance the budget, it is almost unavoidable that the legislature will have to cut Medicaid. And yet, the reason Medicaid is so expensive is because costs are rising fast to cover the very people the program was designed to serve: people who are disabled or need long-term care. Kids make up the program’s next biggest source of general fund spending.

“The difficult position our committee finds ourselves in is wanting desperately to do right by those who are most vulnerable in our state and making sure we are being the best stewards of taxpayers’ dollars,” Bird said during Tuesday’s meeting.

And so the committee struggled forward, finding cuts as it went. It reduced the mileage rate for nonemergency medical transportation services, saving $13.7 million. It made a tweak to how the department calculates certain prescription drug prices, saving $470,000.

This is still the drafting stage for the state budget. Each of these cuts — and the decisions to skip over others — could be changed as the budget bill is finalized and then makes its way through the legislature in the coming weeks.

But it didn’t make the process any less excruciating.

Kirkmeyer’s frustration came out when her colleagues balked at stopping a yet-to-be-implemented plan that would allow kids to remain continuously enrolled in Medicaid for the first three years of their lives, rather than their families having to re-apply each year. The change was projected to save $5.6 million. (The committee voted to begin drafting a rollback bill, though it is unclear if it will have the votes to even be introduced.)

Next up, the committee debated whether to propose a bill eliminating a program that provides health coverage to children without legal immigration status. The program, known as Cover All Coloradans, only just launched in January and has enrolled around 10,000 kids who wouldn’t have otherwise been insured for a doctor checkup. Cutting it would save $19.2 million in next year’s budget.

“These are kids,” Sen. Judy Amabile pleaded. “This was the right thing to do when we did it, and it’s still the right thing to do now.”

The committee asked for more options on ways to reduce the program’s costs.

“Public health care policy, in general, is a devil’s choice,” said Sen. Jeff Bridges, the committee’s chair.

That proved especially poignant when the next item came up: equine therapy for people, mostly children, who are disabled. In other words, taking ponies away from kids.

Medicaid in Colorado only in the last year began covering the service, which uses horses to help with physical, behavioral and speech therapies. But, as Kurtz, the budget analyst, explained, the therapy is generally not covered by private insurance or Medicare, making Medicaid’s coverage an outlier. In his briefing document to the committee, Kurtz wrote that the idea of ending coverage for the therapy illustrates “the absurdity of the choices available.”

Cutting it would save a mere $198,014 of state general fund dollars — 0.0165% of the state’s total budget shortfall.

After Kurtz finished presenting the idea, 10 seconds of silence ticked by.

“I’ve seen this in action,” Bridges finally said. “I have, um, seen the impact this has on, um, these folks, especially the kids.”

His voice grew angrier.

“I hate this. And it’s only $200,000. But I — it feels like it should be a lever that we can pull if we need to.”

Moments later, the committee voted unanimously to begin drafting a bill to cut the coverage. Bridges banged the gavel, then dropped it, letting it rattle on the dais. His microphone remained open.

“I hate the HCPF budget,” he said. “I HATE the HCPF budget.”

The pharmacy of Denver Indian Health and Family Services is seen on April 13, 2023. (Olivia Sun, The Colorado Sun via Report for America)

$700 million

How much the 340B program generates for Colorado hospitals per year

If everything sticks to schedule, two heavyweight health care bills will step into the ring at the state Capitol on Thursday for their first committee hearings.

Both deal with a federal program known as 340B, which requires pharmaceutical manufacturers to give hefty discounts on certain drugs to hospitals that treat a large number of Medicaid patients. The hospitals can then charge patients or insurers their normal retail price for those drugs, generating an extra chunk of cash for the hospitals to use for their charity care programs or just to shore up their bottom line.

The program amounts to about $700 million for hospitals statewide, said Julie Lonborg, the Colorado Hospital Association’s senior vice president and chief of staff. Nationally, hospitals saved about $57 billion in 2023 by buying drugs at the 340B price as opposed to the list price, said Katelin Lucariello, the deputy vice president of state advocacy at the pharmaceutical trade group PhRMA.

Citing the program’s rapid growth and saying that it is being used by hospitals as a way to boost profits without benefiting patients, the pharma industry has begun trying to impose limitations on it across the country.

“I would say there are good and bad actors in the program, and the bad actors that are increasing their profitability by abusing the program are ultimately at the forefront of this conversation,” Lucariello said during a January interview.

We’ve already written about one of the bills up for committee this week: Senate Bill 71, which would prohibit these pharma restrictions. That bill is supported by hospitals, which say 340B is a vital life preserver for some of the state’s hospitals most at risk of drowning.

The second bill, Senate Bill 124, is a measure that would require hospitals to use the savings from the 340B program to reduce prescription drug costs and other out-of-pocket costs for lower-income patients. The bill is supported by at least a handful of pharmaceutical companies, according to the secretary of state’s lobbying database.

Lonborg, with the hospital association, said Senate Bill 124 would place such a burden on hospitals — both in terms of accounting and in terms of not being able to use the money in other ways — that many would opt out of the program.

“Ultimately, we think it’s pharma’s attempt to cut the program,” she said.

What makes this fight so interesting (apart from its participants — hospitals vs. pharma!) is that both bills have bipartisan sponsorship in both chambers, so it’s not easy to see how they will split the legislature.

The bills are scheduled to be heard at 1:30 p.m. Thursday in the Senate Health and Human Services Committee.

In this Friday, July 8, 2016, photo, a pharmacy technician fills a prescription at a pharmacy, in Sacramento, Calif. (AP Photo/Rich Pedroncelli, File)

Speaking of those prescription drug bills, a new poll claims that 84% of Coloradans would support a law like Senate Bill 124 that requires hospitals to use 340B proceeds to lower prescription costs for patients.

The poll, conducted by local firm Keating Research, which typically works with Democrats, surveyed 800 active, registered voters over the phone and online and has a margin of error of plus or minus 3.5 percentage points. All of that is pretty normal looking. It’s the organization behind it that is more mysterious.

The poll was commissioned by Our Health Equity, a roughly year-old national group that says it works on ensuring access to affordable medication, clean water, quality food and charity care. The group has, at least in the past couple of months, become especially active in lobbying on 340B, including against bills in Oregon and Michigan that would have clamped down on pharma efforts to restrict the program.

Laura Brod Hameed, the director of Our Health Equity, said in an interview that the organization isn’t opposed to 340B but wants to see more money going to reduce patient costs. Hameed is based in Minnesota and previously served in that state’s legislature as a Republican representative. She said she had just recently joined Our Health Equity.

The organization itself is a project of a nonprofit called the Domestic Policy Caucus, which lists a truly peculiar array of interests on its website: opposing government-owned broadband networks, supporting a national popular vote, opposing interest rate caps on loans, backing infrastructure investment in Massachusetts, and fighting against a clean transportation standard in Minnesota.

The Domestic Policy Caucus previously popped up in Colorado in a national popular vote ballot measure, where it was linked to a dark money group with a similar name.

Hameed declined to say who funds Our Health Equity.

“We don’t disclose any of our funders,” she said when asked whether pharma companies have donated to the organization. “What I can say is we’re not representing any of those big behemoth organizations. Our organization is focused on representing the people most in need.”

People move through the Colorado Capitol in Denver on Thursday, March, 6, 2025. (Jesse Paul, The Colorado Sun)

Advocates for people with disabilities cheered Tuesday, as a bill to add enhanced accessibility standards to building codes was signed into law.

Lt. Gov. Dianne Primavera, acting as governor while Gov. Jared Polis is out of the state, signed House Bill 1030 at a ceremony in the governor’s office. The bill, which will take effect at the start of 2026, requires local governments when adopting new building codes or updating existing ones to ensure that the codes meet or exceed the accessibility standards in international building codes.

“Every Coloradan deserves the freedom to live in spaces they can navigate and enjoy,” Primavera said in a statement. “By aligning our building codes with the current international accessibility standards, we’re not just meeting legal requirements — we’re reinforcing Colorado’s commitment to inclusivity and equal opportunity.”

There were already accessibility standards in the law. But advocates say the new law is important because those current standards aren’t enough.

“For too long, the outdated and bare minimum requirements of the Fair Housing Act have set the bar too low for accessibility,” Kelly McCullough, a co-legal director for Disability Law Colorado, said in a statement. “This legislation strengthens accessibility standards in building codes to better meet the needs of people with disabilities and ensure that buildings, including multi-family housing, are designed for everyone.”

Click the image to go to the full report. (KFF)

Republicans in Congress, as part of a package spending reductions and tax cuts, are looking to potentially make deep cuts to Medicaid. According to a new poll, voters don’t want them to.

A poll from the nonpartisan health policy think tank KFF found that 82% of U.S. adults want to see Medicaid funding either kept the same or increased. Support was strong even among Republicans and people who voted for President Donald Trump, with 69% and 65%, respectively, wanting to see Medicaid funding unchanged or boosted.

Only 9% of U.S. adults — and 19% of Trump voters — want to see Medicaid spending decreased by a lot.

In other questions, the poll found that 96% of U.S. adults believe that Medicaid is somewhat or very important to their communities, while more than half of adults say either they or a family member has at one point been covered by Medicaid. Support for work requirements in Medicaid is strong, though a majority of people incorrectly believe that most working-age adults on Medicaid are unemployed.

You can learn more about the poll on KFF’s website.

Hey, we made it to the bottom! Who’s ready for a nap?

Thanks for hanging with us this week. Let’s do this in person soon, huh? Tickets are on sale now for Colorado SunFest 2025 on May 16 at the University of Denver. Great panels, great people, great conversations. It should be a lot of fun.

More information and tickets are available at ColoradoSun.com/Colorado-SunFest.

See ya next week.

— John & Parker

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