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Colorado’s Medicaid system is not collapsing by accident.
It’s collapsing because state leadership built a program they knew they could not afford — and now they are quietly trying to ration it while pretending nothing is wrong.
The facts tell a different story — of government expansion, denial, and failure.
A Crisis of the Governor’s Own Making
Governor Jared Polis is proposing a $48 billion state budget for FY 2026–27. But despite the size of that budget, Medicaid is intentionally underfunded by $333 million, according to an analysis by Axios reported earlier this week.
This isn’t an accounting accident — it’s a political decision. The legislature’s own nonpartisan analysts estimate Medicaid needs 11.9% growth, or $631.4 million, just to maintain current services. But Polis proposes only 5.6% growth, funded at $297.7 million, which still leaves a $333.7 million shortfall relative to the actual projected need, according to the Joint Budget Committee.
While the shift is positioned as “slowing growth,” it rather appears to be a deliberate shorting of a program that reportedly serves 1.2 million Coloradans. That’s over 20% of the state population.
Meanwhile, Medicaid already consumes about one-third of the state budget, and its rapid growth is smashing into TABOR’s spending limits, according to reporting from Colorado Newsline this week.
In other words: the state made promises it couldn’t keep. Again. We literally just did this with the school meals programs in last week’s elections.
The Governor’s Rhetoric Isn’t Matching Reality
Polis insists he’s not cutting eligibility — only “benefits” and “what the state pays providers,” but that is political spin.
Cutting provider payments is cutting access. Cutting benefits is cutting care. The state may avoid the headline “Governor removes people from Medicaid,” but reducing provider rates and capping services still has the same real-world effect: fewer doctors, fewer dentists, longer waits, reduced options, and worse outcomes.
And it’s not hypothetical. The governor has already cut $79 million this year from Medicaid providers — especially dental, behavioral health, and services for children with disabilities, according to Colorado Politics.
If that’s not cutting care, what is?
Just Pretend the Problem Doesn’t Exist
Instead of owning the consequences of years of overspending and program expansion, the governor is now trying to paper it over with gimmicks.
One proposal, reported Wednesday by Colorado Politics, is to privatize Pinnacol Assurance to raise $400 million. But selling a state asset to cover operating costs is not a solution — it’s a bailout. And a temporary one at best.
They’re also talking about commissioning a national expert study, with findings due in February — more political theater. If there is one thing Colorado loves to do it’s commission studies and write reports.
The truth is the state isn’t trying to fix Medicaid — it’s managing the optics of their long term fiscal mismanagement finally catching up with them.
Based on how budget fights usually end in Colorado, the legislature will probably restore some Medicaid funding while allowing the governor to keep some of the cuts. We can expect to see partial restorations in politically sensitive areas, continued provider rate reductions, growing wait times, shrinking provider networks, and a Medicaid system that quietly offers less and less each year.
Slow-motion rationing combined with guided behavioral change. It seems to always go this way. And the governor dodges the tough questions:
If eligibility isn’t being cut, why does the administration keep cutting the services that actually determine access?
If Medicaid already swallows one-third of the Colorado budget, how much more government growth does the governor believe taxpayers should subsidize?
Why did state leaders expand the program for years without a plan to pay for it?
Why is the administration pretending a $333 million “shortfall” in the governor's budget is anything other than a cut?
How long until the state admits it cannot centrally plan, centrally fund, or centrally manage a massive health-care system without eventually breaking it?
And how many more times are American communities going to let them try?
Colorado’s Medicaid crisis reveals a simple truth: government expansion always ends the same way — with more control, more spending, and ultimately less access and diminishing quality for the very people the politicians claim to be protecting.
The state built a system it cannot afford. The governor is now rationing the fallout.
And taxpayers, providers, and vulnerable Coloradans are left paying the price.
Again.
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