In their article “How Medicaid became such a drag on Colorado’s state budget,” Colorado Sun reporters Jesse Paul and John Ingold walk through some dire numbers regarding the increasing costs of Medicaid and the shortfalls of Colorado’s state general fund. They’re not wrong — health care costs have outpaced inflation for years, and utilization of care is growing.
But in pinning the blame for our budget woes on Medicaid, we risk losing sight of the larger context of our budget crisis, inadvertently giving a pass to those who have systematically attacked Colorado’s safety net for over 30 years.
Calling Medicaid a burden on the state is like calling education a burden, or road construction a burden. Road construction costs have been increasing even faster than health care, averaging a 20% year over year increase since 2021. But we do not call the roads we all depend upon a “drag.”
Medicaid is a commitment we have made as a state, to one another, and to ourselves, ensuring that Coloradans can always access the care they need. It is a right that belongs to all of us, even if today we do not meet Medicaid’s strict eligibility requirements. It is there for us in the hardest times.
Gov. Jared Polis tells us that the rising costs of Medicaid are “unacceptable and unsustainable,” but this framing avoids discussing the real culprit of our budget crisis: TABOR.
Today TABOR might seem as Colorado as the Rockies themselves, but this amendment was introduced to our state by Douglas Bruce, a California transplant and slumlord who later went to prison for tax evasion, money laundering and attempted bribery of an elected official. In Bruce’s proposal, revenue collection would be capped according to a strict, static formula. According to proponents of the amendment, this formula would account for inflation and growth in the state population. In practice, the formula has never fully accounted for the actual costs of the services Coloradans expect and deserve.
With a few very rare exceptions, the state has come up short in paying for the programs voters say they want, and every year, the situation becomes worse. Colorado is ranked 44th in per capita state spending, investing only half of what other states invest per person.
That’s by design. The TABOR cap prevents the state from building up better reserves during good times, ratchets the budget down during the bad times, and, at all times, ensures tax breaks for the very wealthiest Coloradans.
And now the state has no way to account for the perfect storm we face today: runaway health care inflation, an aging population and a disastrous federal law (HR1, formerly known as the One Big Beautiful Bill Act), which pulled the funding states like Colorado had previously counted on to support Medicaid costs.
The Sun reporters go into many details of why those Medicaid costs are rising. But health care costs industry-wide are rising even faster. In fact, Medicaid is one of the most cost-effective, life-sustaining programs we have.
As previous Colorado Sun reporting illustrates, more than 60% of nursing home residents in Colorado rely on Medicaid, along with almost 40% of all children, thousands of Coloradans with disabilities, and thousands of caregivers too. In total, one-fifth of all Coloradans depend on Medicaid.
Arbitrarily capping Medicaid costs to align with the budget cap defined by TABOR, as the governor has proposed, can only be done by cutting services and lowering provider rates. Unfortunately, when rates fall below the cost of care, providers leave the program. That means fewer home health workers and fewer available specialists. Quality suffers. Maternity wards and nursing homes close.
The proposed cap is a formula for denying Coloradans the care they need to thrive, or even to survive. And for what? To continue to give tax breaks to those who need them the least.
For too many years, dark money groups have told us TABOR is as inescapable as gravity. These groups are paid to lobby for the lowest possible taxation on their hidden wealthy donors. But the true drag on our state budget is the idea that those who have benefited the most need not give back to the vibrant state that supported their success.
Our budget is indeed in dire shape, and we are headed for years of shortfalls and suffering. But if we’re going to fix it, we must first reject the governor’s narrative that Medicaid spending is a burden on other priorities and lay the blame where it actually belongs: on a tax system that was intentionally broken decades ago, and that needs significant reform today.
Lydia McCoy, of Denver, is the CEO of Colorado Center on Law and Policy.
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