From $8 Billion to $16 Billion: How Colorado’s Medicaid Budget Doubled in a Decade

By Shaina Cole | Contributing Writer, Rocky Mountain Voice

If you ask most Colorado families how they feel about health care right now, the answers aren’t complicated.

It’s expensive.
It’s confusing.
It keeps going up.

And for taxpayers helping fund Colorado’s Medicaid program — known as Health First Colorado — another question has started to surface:

If enrollment has come back down, why hasn’t spending followed?

Ten years ago, Colorado’s Medicaid agency operated on roughly $8 billion. Today it’s closer to $16 billion. The Common Sense Institute (CSI) calculates that as 101 percent growth over the decade.

CSI reports that the rest of the state operating budget grew 64 percent during that same period.

The story of enrollment is different.

HCPF’s budget rose from about $8 billion in 2015 to nearly $16 billion in 2025. Over that same period, the rest of Colorado’s operating budget grew 64 percent, according to the Common Sense Institute.

Under federal continuous coverage protections during the pandemic, Medicaid enrollment increased dramatically. After those protections expired and redetermination requirements resumed, enrollment declined — returning near 2015 levels by 2025, according to CSI.

The spending didn’t fall with it.

That’s where this story begins.

A System That Changed — And Where It Shows Up

If you want to understand where Medicaid spending growth is concentrated, you don’t start with the entire budget.

You start with the billing codes that carry the most weight.

In Colorado’s Home- and Community-Based Services system, a handful of codes consistently account for a large share of long-term care spending. Residential habilitation, billed under T2016. Personal care services, billed under T1019 in 15-minute increments. Peer support services, billed under H0038 in behavioral health programs.

These aren’t abstract technical details. They are the structural engines inside the system.

While the CSI report focuses broadly on cumulative policy layering rather than individual billing codes, those policy changes operate within reimbursement categories such as these.

And over the past decade, lawmakers changed the rules that govern how those engines run.

In 2019, SB19-238 required reimbursement increases and wage pass-throughs for certain home- and community-based services. T1019 — billed in 15-minute increments — sits directly inside that universe. When the reimbursement rate per unit rises, each increment of care carries more cost. Multiply that across thousands of providers and service hours statewide, and the cumulative impact grows.

Residential habilitation under T2016 operates on a per-diem model tied to tier classifications. SB15-228 created a formalized provider rate review process. SB22-236  later shortened the review cycle, requiring reassessment at least every three years beginning in 2023. When per-day residential rates are periodically recalibrated — and when tier placement determines reimbursement — even incremental adjustments can influence statewide totals.

Behavioral health went through its own recalibration with HB22-1268 directing a comprehensive review of Medicaid behavioral health reimbursement. Peer support services, often billed under H0038, operate inside that reimbursement structure. When adequacy and workforce sustainability are reassessed, the economics of those time-based services shift with it.

Then there are eligibility expansions — the kinds voters recognize more easily than billing codes.

Legislators enacted legislation in 2022 known as “Cover All Coloradans,” which extended Medicaid-like coverage to some people irrespective of their immigration status. Proponents characterized it as an investment in public health and a means of lowering uncompensated care. The long-term financial impact was questioned by critics. In any case, broadening eligibility broadens the program’s reach.

Moreover, Cover All was not the only expansion that occurred.

For new mothers, Medicaid coverage no longer ends two months after delivery. It now stretches to a full year. In some cases, the state also lowered or removed out-of-pocket costs tied to that care. The Community First Choice was implemented through SB23-289, which rearranged certain attendant services through the Medicaid State Plan. Along the way, additional community and behavioral health services were included. 

Each of these policies targeted a particular issue, such as workforce, access, benefit alignment, and maternal outcomes.

But taken together, they expanded both who qualifies for services and how those services are reimbursed.

CSI reports that between 2019 and 2025, lawmakers enacted 182 health care-related bills affecting Colorado’s Medicaid system, adding an estimated $858 million annually in state costs.

The Common Sense Institute reports that between 2019 and 2025 alone, lawmakers enacted 182 health care-related bills affecting the system, adding an estimated $858 million annually in state costs.

Cover All is one of the most visible examples.

It is not the only one.

CSI characterizes the result as cumulative policy layering — eligibility expansions, reimbursement adjustments, benefit redesigns and recurring rate recalibrations — that together have altered the program’s cost structure over time.

That’s where growth concentrates.

Not evenly across the budget.

But inside the structural core of the system.

The Staffing Surge

There is another part of this story that deserves attention — and far less discussion.

While enrollment rose modestly between fiscal year 2018 and 2024 — about 7.6 percent — CSI reports that HCPF’s full-time staffing increased by 72 percent during that same period, adding the equivalent of 339 positions.

Between fiscal years 2018 and 2024, Medicaid enrollment increased about 7.6 percent. During that same period, HCPF staffing grew 72 percent — an increase of 339 full-time positions — according to CSI.

That gap stands out.

Put differently, staffing grew nearly ten times faster than enrollment over that six-year window.

A growing caseload can justify additional administrative support. But when staffing growth dramatically outpaces enrollment growth, it raises an obvious question:

What changed inside the agency?

Some of the answer may lie in complexity. More tiers. More rate reviews. Expanded behavioral health oversight. New benefit categories. Recurring recalibration cycles.

Every new rule requires staff.

Every review requires analysts.

Every compliance measure requires oversight.

Layer by layer, the administrative structure expands.

But staffing growth carries long-term fiscal implications of its own. Salaries, benefits, and retirement obligations don’t disappear when enrollment dips.

CSI also notes that spending within the Executive Director’s Office doubled during this period.

None of that automatically signals mismanagement. Large programs require expertise and oversight.

But when spending doubles, enrollment returns near prior levels, and staffing surges far beyond caseload growth, it reinforces the broader question:

Has the system simply become more expensive to operate?

The Human Stakes

It’s easy to become absorbed in charts and budget tables, but Medicaid ultimately serves people, not line items. It supports a young adult with developmental disabilities who relies on residential services, a family caring for an aging parent who depends on in-home personal care, and someone working through a mental health recovery journey with the help of peer support.

For them, reimbursement structures aren’t abstract. They’re daily life.

At the same time, CSI reports that HCPF now accounts for approximately 37 percent of Colorado’s operating budget.

When one department consumes more than a third of the operating budget, trade-offs follow. Education funding debates intensify. Infrastructure projects compete for dollars. 

The bigger the program gets, the tougher the budget math becomes.

You can protect vulnerable Coloradans and still demand oversight.

But sustainability starts with transparency.

A System at a Crossroads

Colorado’s Medicaid program is entering another period of change. CSI notes that federal modifications under the One Big Beautiful Bill Act are scheduled to begin taking effect in 2027.

Revenue pressures remain real. Hospitals report strain following the post-pandemic disenrollment process.

And yet, spending remains elevated.

The hard truth may be that there was no one law, provider, or agency action that caused the doubling of Medicaid spending.

Instead, CSI concludes that a decade of cumulative legislative and administrative changes has reshaped the system’s cost trajectory.

That is not scandal.

But it is consequential.

Because when enrollment falls, staffing surges, and spending doubles, the responsible question isn’t outrage.

It’s sustainability.

What kind of Medicaid system does Colorado want — and what kind can it afford?