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Legislators

Colorado Lawmakers Face Pressure to Rewrite Budget Amid Medicaid Cuts

Strategic Insights

— 2 min read

Colorado lawmakers spent seven months deliberating and trimming $44 billion in spending to balance the state budget. However, the recent passage of the One Big Beautiful Bill Act by President Trump has introduced new challenges, necessitating another round of budget cuts. The deep Medicaid and tax cuts in the federal reconciliation legislation have left state lawmakers scrambling to find solutions, with estimates suggesting that Colorado could lose up to $500 million in revenue and absorb an additional $500 million in costs.

Key Takeaways:

  • The One Big Beautiful Bill Act's Medicaid provisions, which will take effect in 2026, will force Colorado lawmakers to make deep cuts to the state's already tight budget.
  • The governor's budget office estimates that the Republican-led bill will lead to $500 million in lost revenue for Colorado and $500 million more in implementation costs.
  • The state's Medicaid program, which serves 1.1 million adults and children, will face eligibility and financial limits due to the federal bill.
  • The choices on the table for lawmakers include deciding who gets coverage and who gets kicked off the rolls or re-examining all health care programs.
  • Adam Fox, deputy director of the Colorado Consumer Health Initiative, emphasized that lawmakers must "rethink how we do health care."

Statistics:

  • Estimated lost revenue for Colorado: $500 million
  • Estimated implementation costs: $500 million
  • Number of Coloradans served by Medicaid: 1.1 million
  • Number of months for Medicaid provisions to take effect: 12

Sources:

  • Axios: "Local: Denver" (https://www.axios.com/local/denver/2025/04/01/colorado-budget-cuts-medicaid-education)
  • Axios: "Trump Signs Big Beautiful Bill Tax Spending Budget" (https://www.axios.com/2025/07/04/trump-signs-big-beautiful-bill-tax-spending-budget)
  • Colorado General Assembly: "Fiscal Year 2025-26 Budget Package and Long Bill Narrative" (https://leg.colorado.gov/publications/fy-2025-26-budget-package-and-long-bill-narrative)
  • Axios: "Medicaid Provisions in Tax Bill Delayed" (https://www.axios.com/2025/07/07/medicaid-impacts-tax-bill-delayed)
  • Health First Colorado: Statement from Executive Director Kim Bimestefer in Response to the Passage of H.R. 1, the One Big Beautiful Bill Act (OBBA) (https://www.healthfirstcolorado.com/2025/07/statement-from-hcpf-executive-director-kim-bimestefer-in-response-to-the-passage-of-h-r-1-the-one-big-beautiful-bill-act-obbba/)
  • Axios: "Medicaid Work Requirements in Colorado" (https://www.axios.com/2025/05/13/medicaid-work-requirements)
  • Axios: "Big Beautiful Bill Health Solar Provisions" (https://www.axios.com/2025/07/03/big-beautiful-bill-health-solar)
  • Kaiser Family Foundation: "Medicaid in Colorado" (https://files.kff.org/attachment/fact-sheet-medicaid-state-CO)

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