Colorado, like the red states, has reduced the number of Medicaid insured, which alarms the advocacy group for the poor
Colorado, like the red states, has reduced the number of Medicaid insured, which alarms the advocacy group for the poor

Colorado has become one of the 10 states with the highest share of Medicaid recipients since the U.S. government lifted a pandemic-related restriction on excluding people from the health insurance program.

It is the only blue state in a group of red states with high disenrollment rates – which also includes Idaho, Montana, Texas and Utah – where an ongoing dismantling of the Medicaid program has been underway since spring 2023.

Colorado is also the only state that has all the political conditions to cushion the consequences of winding down the Medicaid program, say Medicaid policy analysts at KFF.

But it seems that the pillow was not inserted.

“In Colorado, there is actually a gap between our progressive policies and our underfunded and fragmented administration,” said Bethany Pray, legal and policy officer at the Colorado Center on Law and Policy, a Denver-based legal aid organization.

According to KFF data, Colorado experienced a larger net decline in enrollment in Medicaid and the Children’s Health Insurance Program during the phaseout than any other state except Utah.

Health care access advocates, researchers and county governments — which handle the bulk of Medicaid redeterminations in Colorado — say the main problems are outdated technology and low automatic renewal rates, both of which create barriers to enrollment that undermine the state’s progressive policies.

State officials take a more rosy view. They say the drop in enrollment is a sign that they did a good job of enrolling people during the height of the Covid-19 pandemic. Second, they say Colorado’s economy is doing well, so more people are able to get insurance through their jobs.

“When we have a really outstanding unemployment rate, not as many people need social safety net programs, and we’re proud of that. Our people thrive and prosper,” said Kim Bimestefer, who heads the Department of Health Policy and Financing and is the state’s top Medicaid official. Her department has also said that some people choose not to fill out their eligibility paperwork because they know their income is too high to qualify.

Data from the Bureau of Labor Statistics shows that while Colorado’s unemployment rate is lower than the rest of the country, it is still higher than before the pandemic.

State officials believe Medicaid enrollment has declined because many of those people have found jobs, reflected in lower unemployment rates. But that scenario has played out in less than half of the state’s counties, a KFF Health News analysis found. Specifically, in 11 counties where unemployment was flat or increased from January 2020 to April 2024, the share of the population covered by Medicaid shrank. A low unemployment rate doesn’t necessarily mean there’s less need for Medicaid coverage, because many employed people earn so little that they still qualify for the program.

Colorado was able to increase enrollment in Medicaid and its related Children’s Health Insurance Program by 35% during the public health emergency caused by Covid, compared to about 30% nationally and among states with Medicaid expansion.

“We have grown more, which logically means we will see more cancellations,” said Bimestefer. “We have risen higher and will fall lower because our economy is doing great.”

Her The department’s website initially said that Medicaid enrollment in Colorado had increased more than any other state with Medicaid expansion except Hawaii. But data from the Centers for Medicare & Medicaid Services shows that pandemic-related enrollment growth in other states, including Indiana, North Dakota, Virginia and Nevada, also exceeded Colorado’s.

Even if it had shown the strongest growth, the argument that everything that goes up must go down doesn’t hold water, Medicaid policy analysts say.

“A counterargument to that is that we know that there was never full participation in Medicaid before the pandemic,” said Jennifer Tolbert, deputy director of KFF’s Medicaid and Uninsured Program.

Tolbert said she was surprised by the magnitude of the loss to Colorado’s Medicaid enrollees, since Colorado is the only state in the country that meets all of the criteria KFF expected would mitigate the impact of the wind-down. Those measures include adopting the Affordable Care Act’s Medicaid expansion and making renewals automatic.

Tolbert was among several policy researchers who said that even if unemployment returns to pre-pandemic levels, they would expect a higher, not lower, share of Coloradans enrolled in the social safety net.

Ally Sullivan, a spokesman for Democratic Gov. Jared Polis, said a complicating factor in Colorado’s system is that Colorado is one of the few states where eligibility verification is largely left to counties, “which has added even more complexity to the state’s processing process.”

“Colorado is committed to ensuring that Coloradans who are no longer eligible for Medicaid coverage have access to other affordable sources of insurance as quickly as possible, and the state is making a strong effort to do so,” the statement said.

Minnesota is another state that largely leaves eligibility verification to counties. Yet only 26% of the Medicaid population was disenrolled in the process, compared to 48% in Colorado. Like Colorado, Minnesota is led by a Democratic governor. Minnesota is also similar to Colorado in terms of population, the increase in enrollment during the pandemic, the percentage of its residents living in affluent areas and its lower unemployment rate compared to the national average. But Bimestefer rejects any comparison.

“I don’t care about Minnesota,” Bimestefer said. “This is Colorado. I don’t care what Minnesota did.”

Access to health care advocates and researchers said a number of technological and administrative problems contributed to Colorado’s high opt-out rate.

First, Colorado’s eligibility database, the Colorado Benefits Management System, is outdated and clunky, according to people who use it or are familiar with systems in other states.

“It’s like still using the old flip phone that you want to play Snake on,” said Sarah Grusin, an attorney with the National Health Law Program. “We have better stuff.”

Grusin and Pray’s organizations filed a civil rights violation complaint with several federal agencies, alleging that the systemic problems that led to the termination of health insurance for disabled Colorado residents amounted to discrimination.

“It took many months to fix something that doesn’t sound that complicated,” Pray said.

Bimestefer said her department is working on a plan to improve the system, which is managed by Deloitte under a $354.4 million contract that runs through 2027. A recent KFF Health News investigation into eligibility systems managed by Deloitte found widespread problems. In Colorado, a state-commissioned audit in 2020 found that many Medicaid recipients were sent incorrect notices and deadlines.

Kenneth Smith, a senior executive at Deloitte and head of the national human services practice, said Deloitte is one of many players collectively administering Medicaid benefits and that states have the technology and make decisions about how to implement it.

Colorado’s technology problems have also limited the ability to use a powerful enrollment tool: automatic renewal.

Last fall, Bimestefer said, her agency had to decide whether to either fix the system so that it would stop deregistering children who should not lose their coverage, or to automatically renew the insurance of people who have no income or whose income is below the federal poverty line. Both are not possible, she said.

Experts like Tricia Brooks, a research professor at Georgetown University’s Center for Children and Families, said it’s especially important to increase automatic extensions in states like Colorado, where most of the extension work falls to county government employees.

“What happens when you don’t get a high rate of automatic renewals? You mail out these renewal forms,” ​​Brooks said – which means more cancellations. “They didn’t get the mail. The notice was confusing. They tried to get help through the call center. The list of reasons people don’t renew is endless.”

In fact, two-thirds of Colorado residents who were disenrolled lost their coverage for procedural reasons. According to KFF, that’s in line with the national average. But when you consider that Colorado disenrolled that many people overall, that means more than 500,000 Colorado residents, or about 9% of the state’s population, were disenrolled for procedural reasons — more than the population of the second-largest city, Colorado Springs.

At least a third of those who were deregistered later became eligible for Medicaid, it turned out.

Representatives of health centers and mental health clinics in Colorado report that the number of uninsured patients is increasing, a sign that Coloradans who have dropped out of Medicaid coverage are not necessarily moving to better health insurance arrangements.

Fifty-eight percent of those who were disenrolled are re-enrolled in Medicaid or now have another form of insurance. However, the state does not yet know what happened to the remaining 42 percent of those who were disenrolled and said it will conduct a survey to find out.

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