A year ago, July, the One Big Beautiful Bill Act passed – a law that will cut nearly $1 trillion in Medicaid funding over the next decade, according to the Urban Institute. For rural communities like ours, this isn’t a political headline, it’s a potential disaster. I am worried about the effects on our local healthcare system, hospitals and clinics.
We already operate on thin margins. Our hospitals are stretched, specialists are scarce, and families often have to drive or fly outside the area for care. According to the Colorado Department of Health Care Policy and Financing, over the next decade Colorado stands to lose about $2.5 billion a year of its federal Medicaid funding. Starting in January, new biannual work requirements could threaten coverage for nearly 380,000 Coloradans and add millions in state administrative costs. The costs of additional technology requirements and more staff members are likely to exceed $1 billion nationally, according to an AP analysis. Nationwide, more than 300 rural hospitals are at risk of closing, says The Center for Healthcare Quality and Payment Reform.
The good news: Colorado doesn’t have to wait for Washington. We have options right now.
Evaluate whether it makes sense for Colorado to manage Medicaid. Colorado pays private insurers to manage our Medicaid program. A study by Physicians for a National Health Program found states could save roughly $34 billion per year nationally by managing Medicaid directly themselves. Connecticut de-privatized its Medicaid program in 2012, has saved $4 billion to date, and has seen earlier cancer detection and better survival rates than neighboring New Jersey, which kept its privatized model.
Fund rural hospitals with steady budgets. Global budgeting gives hospitals a fixed annual amount tied to community need, instead of fee-for-service chaos. Pennsylvania’s Rural Health Model has shown this approach can ease rural hospitals’ financial losses. Colorado just received about $200 million this year from the new federal Rural Health Transformation Program – money meant to help rural hospitals exactly like ours. The state is deciding right now how to spend it. Ask candidates running for office if they’ll fight to turn Colorado’s RHTP funding into steady, predictable budgets for rural hospitals.
Rein in prescription drug middlemen. Pharmacy benefit manager companies drive up drug costs and squeeze independent pharmacies that rural Coloradans depend on. Ohio cut out the big insurer-owned PBMs in 2022, built its own system and saved $140 million in two years while boosting payments to local pharmacies more than tenfold. Colorado should do the same.
Colorado has already made some smart moves. Colorado’s Prescription Drug Affordability Board, launched in 2022, has pushed back on price gouging for lifesaving drugs like Enbrel. And, according to STAT News, as of June, the FDA is allowing Colorado to import certain prescription drugs from Canada, which could bring costs down.
Last year, Colorado lawmakers ordered a study to find out whether the state could efficiently run its own universal, single-payer healthcare system, instead of today’s patchwork of private and public insurers. Researchers at the Colorado School of Public Health are currently conducting the study and examining how much doctors and hospitals would get paid, what services would be covered and how the whole system would be funded. Lawmakers will get their answer by December. If it turns out Colorado could cover everyone for less money, that’s the kind of fix that could matter most for places like La Plata County, where access to care is already stretched thin.
Washington may treat Medicaid cuts as just a budget line. But, in La Plata County, it could mean a hospital closing or a neighbor going without care. We don’t have to accept that.
Call your state lawmakers. Tell them to fight for fair use of the new rural health funding, examine costly Medicaid middlemen, hold drug companies accountable and pay attention when the single-payer study lands this December. Our hospitals, our families and our neighbors are counting on it.
Jan Phillips is healthcare chair of the League of Women Voters of La Plata County.