Medicaid funding increase sought by Colorado advocates as enrollment surges

Deep cuts to services loom as Congress weighs new COVID-19 relief measures

By: - July 31, 2020 5:07 pm

Two-month-old Karina receives drops of children’s Tylenol after getting a vaccination at Rocky Mountain Youth Clinics in 2009 in Aurora. Many of the clinic’s patients are on Medicaid. (John Moore/Getty Images)

Even before the coronavirus pandemic hit, it was hard enough for Joaquín Garcia, a student and father of two who lives in Alamosa, to find steady work to fit around his class schedule. With the economy suffering and his children home from school, it’s become harder than ever.

“I basically have to stay (home), and that means one of the incomes in the household is significantly less, and that’s why I’m trying to help out my wife with the housework,” Garcia said. “If it weren’t for Medicaid, I wouldn’t be able to send my kids to the eye doctor.”

Garcia and his family are a few of the roughly 1.2 million adults and children who currently receive care through Health First Colorado, the state’s Medicaid program. It’s a huge relief, he said, to not have to pay out-of-pocket for things like visits to the eye doctor, speech therapy for his daughter or physical therapy for his stepson’s broken leg.

“These things are just not in our budget, and being realistic, I really don’t know what I’d do without Medicaid,” he said. “It means everything, especially for me and my family right now.”

Garcia joined Colorado officials and health-care reform advocates for a virtual rally on July 30 to celebrate the 55th anniversary of Medicaid’s creation — and to send a message to congressional negotiators who currently hold the fate of many of the program’s patients in their hands.

Up to 1 in 3 Coloradans

On its 55th birthday, Medicaid — which provides health coverage to low-income Americans and people with disabilities, and was established as a key part of President Lyndon Johnson’s Great Society agenda in 1965 — has perhaps never played a more critical role in the U.S. health care system, nor faced greater potential pitfalls.

“With Americans losing their jobs and losing their coverage during this pandemic, Medicaid will become a lifeline for millions more,” said Colorado Lt. Gov. Dianne Primavera. “(But) many leaders will try to use budget deficits caused by COVID as an excuse to gut Medicaid.”

In Colorado, Medicaid enrollment is expected to surge by 42%, with half a million new patients receiving coverage through Health First Colorado, officials with the state’s Department of Health Care Policy and Financing project. By the end of this year, as many as 1 in 3 Coloradans will have relied on Medicaid at some point in 2020.

But the surge in the number of Medicaid enrollees, combined with budgetary shortfalls caused by the pandemic, also presents significant new challenges for states, providers and patients alike. And advocates say that without additional federal aid, many of the most vulnerable Coloradans who rely on the program will end up suffering.

In a July 10 letter to Colorado Sens. Michael Bennet and Cory Gardner, the Colorado Consumer Health Initiative and more than 50 other Colorado-based advocacy and community groups urged the passage of more federal funding for Medicaid through the duration of the pandemic and ensuing economic downturn.

“Without the opportunity to sustain our state Medicaid program and mitigate the cuts that have already been made to critical services, the most harm will be done to our front line workers, low-income communities, older adults, rural communities, and communities of color that are already disproportionately impacted by COVID-19,” the letter read. “We cannot afford more cuts to our Medicaid program at the same time that more people than ever before are in need of health care.”

State budget cuts

Already, Medicaid recipients in Colorado have felt the sting of coronavirus-induced austerity. In a series of little-noticed cuts amid the budgetary chaos caused by the virus, it was Medicaid providers and patients who were asked to shoulder much of the burden as state lawmakers sought to close a $3.3 billion shortfall in May.

Even as business groups and conservative Democrats fought to preserve tax breaks for wealthy business owners, budget writers cut reimbursement rates to Medicaid providers and hospitals, increased patient copays to the federal maximum and delayed implementation of a new benefit for substance-use-disorder treatment, among other adjustments.

State analysts forecast a surge of more than 500,000 new Medicaid enrollees by the end of 2020. (Colorado Joint Budget Committee)

Further cuts were avoided thanks to a temporary boost to federal Medicaid funding in the Families First Coronavirus Response Act, passed by Congress in March. The bill’s 6.2% increase to the Federal Medical Assistance Percentage (FMAP), a formula that determines matching funds for state Medicaid programs, will last until the federal government’s declaration of a public-health emergency ends.

But advocates say the 6.2% boost isn’t nearly enough. In the wake of the financial collapse a decade ago, Congress increased FMAP rates by an average of more than 10% across a three-year period, according to the Center on Budget and Policy Priorities. With the downturn caused by COVID-19 expected by many economists to greatly exceed the worst impacts of the Great Recession, Colorado Consumer Health Initiative and other groups are calling on Congress to authorize at least a 14% FMAP increase until June 2021, among other measures.

“At a time when more people than ever are needing this support, that money has to come from somewhere, so where’s it coming from?” said Olga Robak, Colorado state director for advocacy group Protect Our Care. “States are already strapped for cash. So it’s just a snowballing problem.”

Medicaid has long been in the crosshairs of conservative critics of federal spending levels. The expansion to the program authorized by the Affordable Care Act — adopted by 37 states and the District of Columbia over the last decade — would be eliminated entirely if a Republican-led lawsuit to overturn the ACA prevails in arguments before the Supreme Court later this year. Previous Republican repeal efforts, including those supported by Gardner in the Senate in 2017, sought to replace matching funds with fixed “block grants” that would cap spending and allow states to sharply limit eligibility and coverage.

In May, both Gardner and Bennet signed a letter supporting increased FMAP rates in response to the COVID-19 crisis, but did not specify an exact figure. The Health, Economic Assistance, Liability Protection and Schools (HEALS) Act, the legislation unveiled by Senate Republicans earlier this week to begin a new round of congressional negotiations over coronavirus relief, did not include an FMAP boost or any additional provisions for Medicaid. Gardner’s office did not respond to a request for comment on whether or not he believes increased Medicaid funding should be part of the next relief package.

“We’ve already faced a $3.3 billion shortfall in our budget this year, (and) we will face something similar next year if we don’t get help,” said Adam Fox, CCHI’s director of strategic engagement. “And the reality is that while we were able to minimize the cuts to Medicaid this year, I don’t know that we can be so fortunate next year. If we are facing a similar level of cuts, and we don’t get additional support for Medicaid, which is a huge component of that, we’re going to be in a really tight spot.”

The additional $183 million in Medicaid funds that Colorado received as a result of the 6.2% FMAP increase may have staved off deeper cuts for now. But with enrollment continuing to surge, and the trajectory of both the COVID-19 health crisis and the economic fallout still uncertain, advocates fear that the worst impacts are yet to come.

In a planning document published in May, state budget analysts outlined a grim list of additional cuts for lawmakers to consider in the event of additional revenue shortfalls. Among the nearly $400 million in potential cuts are further reimbursement-rate reductions for providers; the elimination of a youth behavioral-health program; the elimination of non-emergency dental coverage for adult Medicaid recipients; and even the elimination of the state’s Children’s Health Insurance Program (CHIP) plan, which covers children in low- and middle-income families who earn too much to qualify for Medicaid.

Even in the dry, legalistic language used by the state Joint Budget Committee’s nonpartisan staff, the consequences of the deeper cuts identified by the report are stark. Of a potential $24 million cut to a program that funds free health clinics, analysts wrote: “Reducing the Primary Care Fund may impact access to care and health, life, and safety for vulnerable populations, to the extent the providers decrease services offered to indigent clients.”

‘Life or death’

Robin Bolduc is among the many Medicaid beneficiaries for whom the stakes of the program’s future couldn’t be higher. She is the primary caregiver for her husband, Bruce, a quadriplegic who depends on a ventilator to breathe.

“Medicaid for people with disabilities is more than a safety net,” said Bolduc, an advocate with the Colorado Cross-Disability Coalition, during a July 23 virtual event in support of increased Medicaid funding. “It really is, certainly in our case, the difference between life and death.”

For Bolduc and her husband, Medicaid provides not only for medical equipment, like wheelchairs and ventilators, but also additional caregiving support and housing modifications that have allowed them to remain in their Boulder home.

“They pay for things that no other insurance is going to pay for,” Bolduc said. “Not even Medicare will pay for most of the services that Medicaid pays for.”

For many patients, of course, the benefits provided by Medicaid won’t include a life-saving breathing machine. But across all demographics, the life-or-death consequences of Medicaid coverage have long been identified by public-health researchers. A wide range of studies conducted since 2013 have concluded that states that opted to expand Medicaid under the ACA have seen significant improvements in overall mortality rates and other health outcomes.

An influential paper published in the Annals of Internal Medicine in 2014 estimated that one excess death is prevented for every 830 people who gain health insurance in a given year. Enrollment in Health First Colorado has grown by more than half a million people since its expansion in 2013, suggesting that thousands of preventable deaths have been avoided due to increased Medicaid coverage during that period.

With the long-term ramifications of the COVID-19 crisis only beginning to be felt, advocates say that the life-saving impacts of Medicaid services could be more vital than ever — but their full impact will only be felt only if programs in Colorado and other states are able to get the resources they need.

“It is really foundational to the way our health-care system is structured,” Fox said. “It’s a hugely important program at all times, but especially now as we are trying to respond to the health needs of Coloradans throughout the pandemic, and the long economic recovery that we’re likely facing.”

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Chase Woodruff
Chase Woodruff

Chase Woodruff is a senior reporter for Colorado Newsline. His beats include the environment, money in politics, and the economy.