By Rae Ellen Bichell | KFF Health News
Colorado stands out among the 10 states that have disenrolled the highest share of Medicaid beneficiaries since the U.S. government lifted a pandemic-era restriction on removing people from the health insurance program.
It’s the only blue state in a cluster of red states with high disenrollment rates — a group that includes Idaho, Montana, Texas, and Utah — in the Medicaid "unwinding" underway since spring 2023.
Colorado also is the only state that had all the policy ingredients in place to cushion the fallout from the unwinding, according to Medicaid policy analysts at KFF.
But it seems the cushion hasn’t been deployed.
“There’s really a divide in Colorado between our progressive policies and our underfunded and fragmented administration,” said Bethany Pray, chief legal and policy officer at the Colorado Center on Law and Policy, a Denver-based legal aid group.
According to KFF data, during the unwinding Colorado has seen a bigger net drop in enrollment in Medicaid and the Children’s Health Insurance Program than any state except Utah.
Advocates for health care access, researchers, and county administrators — the administrators handling the bulk of the Medicaid redeterminations in Colorado — say that the major issues involve outdated technology and low rates of automatic renewals. Both create obstacles to enrollment that undercut the state’s progressive policies.
State officials have a rosier view. They say the drop in enrollment is a sign that they did a good job enrolling people at the height of the covid-19 pandemic. Secondly, they say Colorado’s economy is doing well, so more people can get insurance through their jobs.
“When we have a really stellar unemployment rate, not as many people need safety-net programs, and we’re proud of that. Our people are rising and thriving,” said Kim Bimestefer, who leads the Department of Health Care Policy and Financing and is the state’s top Medicaid official. Her department has also said that some people choose not to fill out their eligibility paperwork because they know their incomes are too high to qualify.
Bureau of Labor Statistics data shows that while it’s true Colorado’s unemployment rate is lower than the nation’s as a whole, it’s higher than it was before the pandemic.
State officials say they believe Medicaid enrollments dropped because many of those people found jobs, as reflected by the lower unemployment rates. But that scenario happened in fewer than half of the state’s counties, a KFF Health News analysis found. Notably, in 11 counties where unemployment stagnated or increased from January 2020 to April 2024, the share of the population covered by Medicaid shrank. A low unemployment rate does not necessarily mean there is less of a need for Medicaid coverage, because many employed people earn wages low enough to still qualify for the program.
Colorado increased enrollment in Medicaid and the related Children’s Health Insurance Program by 35% during the covid public health emergency, compared with about 30% nationally and among Medicaid expansion states.
“We grew more, which means, logically, we’re going to disenroll more,” said Bimestefer.“We went up higher, we’re going to come down lower, because our economy is stellar.”
Her department’s website initially claimed Colorado’s Medicaid enrollment grew more than any other Medicaid expansion state except Hawaii. But data from the Centers for Medicare & Medicaid Services shows pandemic enrollment growth in other states, including Indiana, North Dakota, Virginia, and Nevada, also exceeded that of Colorado.
Even if it had grown the most, the argument that what comes up must come down doesn’t hold water, Medicaid policy analysts said.
“A counterargument to that is we know that there was never a full participation in Medicaid prior to the pandemic,” said Jennifer Tolbert, deputy director of the KFF Program on Medicaid and the Uninsured.
Tolbert said she was surprised by the extent of Colorado’s Medicaid enrollment losses, given it was the one state in the nation that met all the criteria that KFF expected would cushion the effects of the unwinding. Those policies include adopting the Affordable Care Act’s Medicaid expansion and the automatic processing of renewals.
Tolbert was among several policy researchers who said that even if unemployment returned to pre-pandemic levels, they would expect a higher, not lower, share of Coloradans to be enrolled in safety-net coverage.
Ally Sullivan, a spokesperson for Gov. Jared Polis, a Democrat, said one complicating factor in Colorado’s system is that it’s among the handful of states where most of the eligibility verification work falls on counties, “which added complexity to the state’s unwind process.”
“Colorado is committed to ensuring that Coloradans who no longer qualify for Medicaid coverage are connected to other affordable sources of coverage as soon as possible, and the state is going to great lengths to do so,” the statement said.
Minnesota is another state where verifying eligibility is largely left to the counties. Yet it disenrolled just 26% of its Medicaid population in the unwinding, compared with Colorado’s 48%. Like Colorado, Minnesota is led by a Democratic governor. Minnesota also mirrors Colorado in its population, pandemic-era increase in enrollment, the percent of its residents living in prosperous areas, and its better-than-national unemployment rate. But Bimestefer dismissed any comparison.
“I don’t care about Minnesota,” Bimestefer said. “This is Colorado. I don’t care what Minnesota did.”
Advocates for health care access and researchers said a cluster of technological and administrative issues have contributed to Colorado’s high disenrollment rate.
First, Colorado’s eligibility database, the Colorado Benefits Management System, is outdated and clunky, according to people who use it or are familiar with systems in other states.
“It’s like still using the old flip phone where you’re trying to play Snake,” said Sarah Grusin, an attorney at the National Health Law Program. “We have better stuff.”
Grusin and Pray’s organizations filed a civil rights complaint with several federal agencies saying that the system issues that terminated disabled Coloradans’ coverage amounted to discrimination.
“It took many months to fix something that doesn’t sound that complicated,” Pray said.
Bimestefer said her department is working on a plan to improve the system, which is managed by Deloitte under a $354.4 million contract that lasts until 2027. A recent KFF Health News investigation of eligibility systems managed by Deloitte found widespread problems. In Colorado, a state-commissioned audit in 2020 found that many Medicaid beneficiaries were sent incorrect notices and deadlines.
Kenneth Smith, a Deloitte executive who leads its national human services division, said that Deloitte is one player among many who together administer Medicaid benefits, and that the states own the technology and make the decisions about their implementation.
Colorado’s technology woes have also weakened its ability to use a powerful tool in enrollment: automatic renewal.
Last fall, Bimestefer said, her agency had to choose between fixing the system so that it would stop disenrolling children who shouldn’t lose coverage, or start automatically renewing people with no income or with income below the federal poverty level. It couldn’t do both, she said.
Experts such as Tricia Brooks, a research professor with the Center for Children and Families at Georgetown University, said it’s especially important to increase automatic renewals in states like Colorado where most of the renewal work falls on county government staff.
“What happens when you’re not getting a high rate of automated renewals? You’re sending out those renewal forms,” Brooks said — meaning more disenrollments. “They didn’t get the mail. The notice was confusing. They tried to get help through the call center. The list goes on as to why people don’t renew.”
Indeed, two-thirds of disenrolled Coloradans lost coverage for procedural reasons. That’s in line with the national average, according to KFF. But paired with Colorado having disenrolled so many people overall, that means more than 500,000 Coloradans, or about 9% of the state’s people, were disenrolled for procedural reasons — more than the population of its second-largest city, Colorado Springs.
At least a third of those disenrolled were later determined to be eligible for Medicaid.
Officials at Colorado community health centers and mental health centers say they’re seeing a rise in uninsured patients coming through their doors — a sign, they say, that Coloradans dropped from Medicaid aren’t necessarily moving on to greener health insurance pastures.
Fifty-eight percent of those who were disenrolled have returned to Medicaid, or now have another form of insurance. But the state doesn’t yet know what happened to the remaining 42% of people who were dropped and said it would conduct a survey to find out.
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF — the independent source for health policy research, polling, and journalism.
