Federal Reimbursement Model of ‘Perverse Incentives’ Fuels Colorado Medicaid Expansion

By Nash Herman | Commentary, Complete Colorado

Colorado’s ongoing budget-gap struggles are the predictable result of structural problems with Medicaid. 

Paragon Health Institute, a non-partisan research institute, recently published a new report, Preserve and Improve Medicaid, which explains the program’s inherent challenges and how states such as Colorado can take advantage of One Big Beautiful Bill (OBBB) reforms to improve outcomes. 

However, it remains ultimately up to Colorado legislators to address the program’s systemic issues. 

Medicaid’s ‘perverse incentives’

As economist Linda Gorman recently explained, the rapid 2010 expansion of Medicaid did not produce large gains in physical health, suggesting that the new expansion enrollees were mostly healthy people not in need of taxpayer-subsidized healthcare. 

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