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Providers warn Colorado safety net could unravel as HR1 and state cuts loom
Summary
Safety‑net providers and advocates told the House Human Services Committee that federal changes (HR1), state budget pressure and proposed Medicaid cuts threaten hospitals, behavioral health providers and long‑term services — urging careful targeting of reductions, shared data and maximizing federal match programs.
A panel of health‑care providers and statewide advocates told the Colorado House Human Services Committee on Feb. 4 that federal policy changes and state budget pressures risk destabilizing the state’s health‑care safety net and that policymakers should prioritize preservation, shared data and targeted solutions.
"Medicaid is the most efficient program nationally with the lowest per capita costs," Bethany Pray, chief legal and policy officer at the Colorado Center on Law and Policy, said in her presentation. She warned that although Colorado’s overall Medicaid spending is low compared with national averages, spending for enrollees with disabilities is higher and rising — a trend that requires careful management, not broad cuts.
Panelists highlighted a mix of short‑term and longer‑term responses. Cara Johnson Hufford of the Colorado Behavioral Health Care Council and the Save Our Safety Net coalition credited Senate Bill 25‑290 and the Provider Stabilization Fund with helping stabilize providers after the Medicaid unwinding. She told the committee that roughly $24,800,000 in grants were awarded to 56 eligible safety‑net providers in December and that private fundraising raised an additional about $14,000,000 to be distributed in early 2026.
But witnesses warned those one‑time supports do not solve structural funding gaps. Donna Lynn, CEO of Denver Health, told the committee federal changes known as HR1 and related budget cuts could drive large coverage losses and higher uncompensated care. "We've seen estimates that anywhere from 200,000 to close to 400,000 Coloradans will lose Medicaid," she said, and Denver Health estimated roughly 20,000 of its patients could lose coverage, increasing uncompensated care and placing pressure on service lines.
Rural providers described acute consequences. Michael Hassell, CEO of Memorial Hospital and Family Practice of Holyoke, said when local clinics or service lines close, "that patient has to go to the ER to be seen," straining emergency departments and forcing patients to travel farther for basic care. Valleywide Health Systems’ Jana Arnoldy said nearly two‑thirds of community health centers operated at a loss last year, and noted community health centers provide care to about one‑third of Colorado’s Medicaid population while accounting for a small fraction of total Medicaid spending.
Panelists urged policy actions including: - Preserving core safety‑net infrastructure rather than across‑the‑board cuts, because restoration of lost services (for example, reopening labor‑and‑delivery units or residency programs) requires years and large investments; - Creating shared, real‑time data dashboards to track coverage loss, where people go after losing coverage, and health outcomes; - Maximizing federal match opportunities such as the certified community behavioral health clinic (CCBHC) demonstration to draw higher federal matching funds and reduce pressure on the state general fund.
Committee members pressed for concrete metrics of success for SB 25‑290. Witnesses said early measures would include whether clinics remained open and retained staff after stabilization funding, and requested follow‑up reporting on rural distribution of awards and program outcomes. No formal legislative action or votes were taken at the hearing; committee members asked presenters for additional data and analyses to inform upcoming budget decisions.
