Some of Colorado’s spending woes in Medicaid can be traced to lawmakers who had approved new or expanded programs in the last few years, driving up state costs to the tune of tens of millions of dollars.

Just three measures passed in the past five years, for example, would cost the state more than $80 million, though at least one estimate turned out to be incorrect because the new program is actually four times more expensive.

Medicaid today is the state’s single-largest expense, far exceeding any other agency. It is the major driver of a $1.5 billion state deficit.

The state’s Medicaid agency — whose executive director resigned Tuesday under pressure from critics and legislators over allegations of mismanagement, waste and costly errors — had compiled a list of dozens of bills that legislators passed since 2020.

The estimated cost for each legislation ranged from a few hundred thousand dollars, such as reimbursement of equine therapy, to tens of millions, such as the program that provides health coverage to pregnant women and children who are in the country illegally.

The spreadsheet provided by the Department of Health Care Policy and Financing (HCPF) shows each legislation, the estimated cost and whether it added a new full time position.

At least one fiscal estimate turned out to be wrong, quadrupling the cost.

Analysts had estimated that Cover All Coloradans — the health care coverage for immigrants without authorization launched in 2024 — would cost a little over $26 million.

Spending blew past that. The program is expected to cost $112 million in the next fiscal year’s budget. Today, Cover All Coloradans enrolls nearly 30,000 women and children, instead of the 3,600 enrollees assumed by the legislature’s fiscal note.

“The previous forecast included an assumption that this population would be relatively healthier than the traditional Medicaid children population, based on early data from a similar program in Oregon and empirical evidence from academic research that immigrants are a generally healthier population than non-immigrants,” a spokesperson for HCPC had explained in an email. “However, this has not been true in the first calendar year of Colorado’s program.”

It’s not immediately clear if the other cost estimates on the HCPF spreadsheet — and which ones — are accurate or incorrect.

“Clearly, enrollment in Cover All Coloradans has been significantly higher than nonpartisan staff predicted,” said House Speaker Julie McCluskie, D-Dillon, who sponsored the legislation.

Still, McCluskie said she is reluctant to eliminate the program entirely.

“It’s important to note that this covered population is entirely pregnant women, new mothers and young children. I support the steps the JBC has taken to cut spending in this program, but eliminating it entirely would simply shift the cost of providing this care onto consumers, providers and private insurance plans,” she said.

Another new spending bill, passed in 2021, provides “reproductive health” care coverage for people who would not otherwise be eligible for Medicaid because of their citizenship or immigration status. The estimated cost was $3 million.

Another measure — 2023’s Senate Bill 289 — established the Community Choice Option, which allows the state to offer certain in-home and community-based services to Medicaid recipients. Sponsored by Democratic members of the state’s Joint Budget Committee, the bill passed almost unanimously in the Senate and on a 55-10 vote in the House.

The legislation was estimated to cost $39 million.

The price tag for a law passed in 2021 that extended eligibility for postpartum services to a year after giving birth stood at $19 million. The bill passed on a 21-14 vote in the Senate and a 39-23 vote in the House, with Democrats in favor and Republicans opposed.

Other spending included reimbursement of pharmacy services at $4 million; expansion of coverage for family planning services to individuals earning up to 260% of the federal poverty level at $4 million; additional prosthetic device coverage at $3 million; and eliminating requirement for copays for pharmacy and outpatient services at $7 million.

The Medicaid headache

Medicaid costs have exploded in the last several years in Colorado, overtaking K-12 education as the largest line item in the state budget.

Jointly funded by the state and federal government, Medicaid provides health coverage to low-income residents, including children, pregnant women, older individuals and people with disabilities. The program is overseen by the Department of Health Care Policy and Financing.

An analysis from a think tank recently said spending by the Department of Health Care Policy and Financing reached $16 billion in 2025 — a 101% increase from 2015 — while Medicaid enrollment has returned to nearly its 2015 level.

By law, the state must cover that overspending, which state officials have said is tied to higher utilization of health care services by older Coloradans with more expensive health care needs. 

Additionally, the Medicaid program has nabbed headlines in recent weeks with allegations of a fraudulent billing ring, improper payments for autism therapy, and exploding costs in the relatively new program meant to provide health care to pregnant women and children illegally staying in the U.S.

The Department of Health Care Policy and Financing has blamed “outrageous behaviors” among providers, while at the same time acknowledging that certain assumptions — such as the health of the immigrant population covered by the new program — have been wrong.

On Monday, Colorado’s top Medicaid official stepped down, just as a bipartisan bloc of state senators prepared to formally urge Gov. Jared Polis to remove her over what they called years of mismanagement, waste and costly errors inside the state’s largest agency.

Kim Bimestefer, executive direct or of the Department of Health Care Policy and Financing, had been under fire from critics, who questioned how health officials have remained in their roles amid what they described as mismanagement at the state Medicaid program.

In her resignation statement released by the governor’s office, Bimestefer said she had the privilege of “advancing systems that help Coloradans — often in the most difficult times in their lives — get the care and support they need to rise and thrive.”

Bimestefer acknowledged the difficult situation the state finds itself in.

“Working alongside HCPF leaders, staff and stakeholders, we have navigated one unprecedented challenge after another for over 8 years to protect the state’s most vulnerable, with this current chapter proving to be incredibly difficult,” she said, adding she is confident her successor will “successfully navigate the challenging terrain ahead.”

Cost creep

Alec Garnett, who is now the vice president of government and regulatory affairs at UCHealth after serving as House speaker in 2021 and 2022 and the governor’s chief of staff from 2023 to late 2024, said the legislature, by passing one bill at a time, “turned the Medicaid benefit program into everything for everyone.”

“So all of a sudden, Medicaid has become the one of the richest benefits in the entire marketplace. So, if we were all on Medicaid, you probably would have a better benefit than you would on commercial insurance,” he said at the CSI forum in February.

He noted that Medicaid today covers equine, music and physical therapy.

“These are areas that are nice to have, and if we had all the money in the world and you didn’t have to constitutionally balance the budget on an annual basis, may make sense. But that is not the world that we live in,” he said.

To Garnett, the HCPF leadership failed in intervening and telling legislators “we cannot afford that here in Colorado,” adding the state Medicaid program should have focused on the “most important things,” notably primary care, while covering as many people as possible.

He said it took him time “outside in the health care space to really dig deep on how Medicaid is flawed.”

The governor’s office — and lawmakers — rely on the leaders at the Department of Health Care Policy and Financing for advice, he said.

“You really do rely on the experts that you surround yourself with,” he said. “And I will say that if I had known what I do now, my leadership in that role would’ve been very different.”

Nico Brambila and Marianne Goodland contributed to this story.