Source: Aspen Times
Colorado health officials are seeking at least $500 million in health care funding over five years for rural communities, as cuts to Medicaid and other safety-net services are set to take hold.
The funding would come from Republicans’ One Big Beautiful Bill Act, the same legislation that is slated to cut health care funding by $1 trillion over the next decade, which lawmakers passed this summer.
To help offset some of the pressure on rural care providers, who are particularly concerned about the Medicaid cuts, the legislation contains up to $50 billion for states over the next five years to help bolster and expand rural health services.
States have had to move at a breakneck pace to try and secure that funding, with applications due last month and money poised to go out as soon as January.
During a virtual briefing on Tuesday, Colorado health officials said they’ve submitted an application to the Centers for Medicare and Medicaid Services, which is administering the program, and hope they can secure between $100 million and $150 million each year for rural communities.
States have the opportunity to receive as much as $200 million a year, or $1 billion over five years, through the program. Still, Colorado health officials aren’t banking on seeing the full amount.
“The application is complicated; it also had very specific guidelines that you needed to follow,” said Kim Bimestefer, executive director for the Colorado Department of Health Care Policy and Financing, which oversees the state’s Medicaid program. “We shouldn’t rely on or assume that we’ll get $1 billion, but we can cross our fingers and do, just as we’ve done up to this point, the best we can to bring as much money back to Colorado.”
How Colorado could use the money
The $50 billion in federal funding comes with a slew of restrictions on how it can be spent.
States cannot, for example, use the money to duplicate existing programs already covered by federal funds. No more than 15% of the total funding states received can go to provider payments. None of the money can be used to cover construction costs for health centers.
Funding is also restricted to certain entities and communities, including rural hospitals, federally qualified health centers (also known as community clinics), behavioral health providers, emergency medical services, and Tribal nations. Money can also be clawed back by the federal government if states don’t adhere to certain rules and metrics, and funding must be spent within each fiscal year and cannot be rolled over.
Colorado officials outlined ways they plan to use the funding in accordance with federal guidelines. Strategies include: improving health centers’ technology and IT support; providing training and continuing education opportunities for rural providers, increasing regional collaboration through shared electronic medical record systems; paying for credentialing, certifications and application fees for rural residents seeking to become health care workers; and expanding telehealth services.
All 50 states have applied for the $50 billion in funding, according to Colorado officials, and funding will be decided based on numerous factors. That includes state-level demographics such as the rural population size, the number of rural health centers and the level of uncompensated care. Another factor is the kinds of strategies states are pursuing, such as improved partnerships and talent recruitment.
“What we do hope this will do for us is really help us prepare for the future,” said Michelle Mills, CEO for the Colorado Rural Health Center, which represents the state’s 43 rural hospitals. “It’s really vitally important that we get this right. Rural hospitals, in particular, are at risk.”
Funds won’t fully offset Medicaid cuts
Mills said that while the funding will be critical for rural communities, “This in no way is going to cover the Medicaid cuts” included in the One Big Beautiful Bill.
Colorado could lose billions of dollars in federal funding over the next 10 years as a result of the bill’s health care cuts, according to an analysis by the Kaiser Family Foundation. The bill’s reduction to provider tax rates, which states use to bring in more matching federal Medicaid funds, could cost Colorado hospitals $10.4 billion by 2032, according to the Colorado Hospital Association.
At the same time, new work and vetting requirements for Medicaid enrollees could put coverage at risk for over 377,000 low-income Coloradans, according to a state fact sheet. Health
insurance premiums on Affordable Care Act marketplaces are also set to surge next year if Congress allows federal subsidies to expire, and state officials estimate that could lead to approximately 75,000 Coloradans losing coverage.
Taken together, rural providers are bracing for increased demand and less funding.
Colorado’s Medicaid office has also begun mapping out a plan to minimize cuts to services resulting from the One Big Beautiful Bill Act, with the goal of keeping as many people covered as possible. Officials recognize, however, that they’ll likely have to pare back spending, which could mean limits on services and cuts to provider reimbursements.
Gov. Jared Polis also proposed a budget next year that would slash the state’s projected Medicaid budget roughly in half. The governor said the move is aimed at reining in Medicaid spending that has ballooned in recent years, and now risks boxing out other essential state programs.
“We know that there’s really tough times ahead,” Mills said. “We are really hopeful that this (federal) funding is going to come through and really help us transform and sustain access to care in our rural communities.”
