Healthcare Freefall: Finger-pointing intensifies as Colorado’s healthcare system strains under rising costs, shrinking coverage

Colorado's - and the nation's - healthcare woes have devolved into a cycle of finger-pointing, with every sector blaming someone else for the system's failures, while many lament that no workable solution exists and no serious plan is likely to emerge anytime soon.

Meanwhile, families are absorbing sharply higher insurance premiums and patients are being billed steep prices for even basic items, such as Tylenol, in the ER. At the same time, hospitals are carrying the weight of charity care, uninsured patients and treatment for immigrants in the country illegally, intensifying the finger-pointing across the system.

The state blames the federal government. Federal officials cite state mismanagement. Healthcare providers say they're being squeezed out, with reimbursement rates well below what they need to thrive, while some government officials counter that hospital profits are high. Meanwhile, providers are cutting services to stay afloat.

After years of operating in hurricane-level conditions, some warn the healthcare freefall is accelerating. A tsunami, they say, is coming.

H.R. 1 takes center stage

From healthcare administrators to Democratic officials at both the state and federal levels, many argue that the timing of H.R. 1 - the federal budget passed by the Republican-led Congress in 2025 - could not have been more consequential.

Healthcare leaders warned that H.R.1 will intensify the financial pressure already building across the healthcare system. They described the Medicaid and broader healthcare cuts as devastating, noting that while some effects are beginning to surface now, the full impact is yet to land in 2027.

Critics also said the $900 billion in Medicaid cuts over the next decade could threaten the viability of more than 400 hospitals nationwide, including at least nine in Colorado.

On the other hand, supporters said the changes are long overdue - that the federal savings is needed to curb the national debt; that states would no longer be able to game the system by artificially inflating federal matching funds; that the reductions, rather than harm people, preserve the program for those who actually need them; and that restoring personal responsibility on the part of able-bodied enrollees would reduce government dependency and lead to upward mobility.

The bulk of the Medicaid cuts comes in the form of work requirements. The federal law requires states to ensure recipients are working by 2027, but gives them the option to do so sooner. The law mandates that people ages 19 to 64 who have Medicaid coverage work or perform community service at least 80 hours a month or be enrolled in school at least half-time to receive and keep coverage.

It applies only to people who receive Medicaid coverage through an expansion that covers a population with a higher income limit.

Some people would be exempted from the requirements, including disabled veterans, pregnant women, parents and guardians of dependent children under 14 or disabled individuals, people who were recently released from incarceration and people getting addiction treatment.

The nonpartisan Congressional Budget Office has estimated that the requirement will reduce Medicaid costs by $326 billion over a decade - and that it will result in 7.5 million people losing coverage through 2034. Currently, about 77 million Americans are covered by Medicaid.

Colorado's potentially affected hospitals span the Front Range and rural communities, from Denver Health - the region's primary safety-net provider - to smaller hospitals in places like Leadville, Lamar and Fort Morgan, reflecting the mounting pressure across both urban and rural health systems.

'Mismanaging and overregulating'

Republican U.S. Rep. Gabe Evans of Colorado's 8th Congressional District said the reaction to H.R.1 has become more of an easy political escape hatch, especially for Democrats: blame President Donald Trump and Republicans for the healthcare crisis and ignore that the system's problems long predate a single federal budget.

"Democrats have run the state of Colorado since the 2018 elections, with the trifecta majority in the House, Senate and the governorship," Evans said. "They have constitutional authority to fight back, but they continue to insist on mismanaging and overregulating these programs here."

By voting for H.R.1, Evans said he supported a budget focused on eliminating waste, fraud and mismanagement, not on cutting those who qualify for assistance from a program already in distress.

Evans pointed to data showing Colorado's Medicaid spending has doubled over the past decade, from $8 billion in 2015 to $16 billion in 2025, a 101% increase. However, the kicker is that the state's enrollees in the program saw a minimal increase of around 7%, back to 2015 levels, meaning, Evans stressed, most of the money is spent on administrative costs and additional staffing.

State-approved regulations and expansion of services have also surged in recent years, driving many of the cost pressures now surfacing in the system. Evans pointed to a report from the Common Sense Institute noting that the state legislature has enacted 182 healthcare bills since 2019, adding an estimated $858 million in annual costs.

The report's authors argued that the growth is largely the result of increasingly expansive regulatory and policy mandates, rather than enrollment trends or medical inflation alone.

Conversely, while not commenting on the impact of increased costs to implement state-level regulations, Denver Health CEO Donna Lynne said during a June roundtable discussion that H.R.1 would saddle hospitals with new regulatory and administrative demands. Nearly half of Denver Health's patients are on Medicaid, and the hospital has already hired 15 additional staff just to manage the paperwork required to come into compliance with the first phase of H.R. 1, she said.

Lynne called the administrative requirements "wasted" money and time.