JBC flags costs, federal-match risk for 'Cover All Coloradans' and other Medicaid forecast changes

The Joint Budget Committee adjusted Medicaid appropriations after staff reported a higher-than-expected November forecast and a series of federal-policy shifts affecting matching funds. GBC analyst Mister Kurtz told the committee the largest supplemental change is a forecast increase in medical services premiums and that the department will present another updated forecast in mid‑February.

Kurtz said the department received retroactive federal payments after identifying an opportunity to claim an enhanced federal match on emergency services for certain noncitizen populations; the department expects to claim a 90% federal match for that population for up to two years but warned HR 1 will prohibit the enhanced match thereafter. "The department is now claiming an enhanced match for them of 90% federal funds," Kurtz said. He also noted the department is using the hospital provider fee as the state match for that population, which creates "a little bit less clear" legal footing and could invite litigation from hospitals.

The committee pressed staff on a related forecast increase: children lacking access due to immigration. Kurtz said the department projects $53.4 million in total expenditures for that population in FY 25–26 and that shifting children previously covered by CHIP into Medicaid had earlier produced a temporary 65% federal match that the federal government has now reinterpreted down to 50%. The net effect was an increase of roughly $21.3 million for that category and about a $16.7 million net increase for the Medicare Modernization Act line after other offsets.

Committee members repeatedly asked whether forecast estimates are reliable. Kurtz replied, "Forecasting these expenditures is an incredibly complicated process," and said February’s forecast will provide more data. Several members urged staff and the department to explore whether moving particular populations back to CHIP by legislation could restore enhanced matching, but Kurtz said that approach would require more lead time and statutory changes and is not suitable for the current supplemental.

The committee approved staff recommendations to adjust appropriations for the forecasted increases while reserving policy changes — including any proposals to change statutory eligibility or to reassign state matching sources — for figure setting or separate legislation. The panel also requested follow-up research on whether emergency services for children on the Cover All Coloradans benefit continue to draw federal matching funds as the department refines its accounting.