Colorado Prepares for Special Session to Address Federal Budget Impact on Medicaid and ACA

The Colorado General Assembly is preparing for a special session expected the week of August 18 to address the impacts of the recently enacted federal budget bill on state health programs and other issues. Lawmakers gathered in an informal Senate Health and Human Services Committee meeting to review the implications for Medicaid, the Affordable Care Act (ACA), and the Supplemental Nutrition Assistance Program (SNAP).

The session aims to analyze budget adjustments required due to federal funding changes and the effects on health coverage and social services. The federal budget bill imposes $900 billion in Medicaid spending cuts over ten years and restricts eligibility, shifts financing responsibilities to states, and limits ACA premium tax credit eligibility. These changes will affect Colorado's Medicaid program financing, including provider taxes, eligibility criteria, and reimbursement rates. Colorado's primary provider tax, the Colorado Healthcare Affordability and Sustainability Enterprise (CHASE), faces a reduction that could result in a $10.4 billion funding loss between 2026 and 2032, impacting healthcare coverage for over 400,000 residents. CMS has initiated a moratorium capping provider taxes at 3.5%, and states will face increased administrative costs including higher co-pays for Medicaid expansion enrollees. The federal budget also restricts ACA subsidy eligibility for immigrants and mandates narrower eligibility requirements. SNAP changes include stricter work requirements and removal of exemptions for certain vulnerable populations.

The session will include financial analysis discussions, with an estimated daily cost of $24,000 for the legislative session and expected agenda topics including a $700 million budget shortfall influenced by federal tax policy changes. A rural health care transformation fund totaling $50 billion over five years aims to mitigate losses but covers only a fraction of expected cuts to rural health providers. Overall, the special session will chart Colorado's response to substantial federal funding shifts, focusing on sustainability and adjustments needed within state health and social support programs.