Bill would penalize states that cover undocumented people, bar legal immigrants from individual insurance subsidies. More than 21,000 undocumented people in Colorado could lose Medicaid coverage if the Republicans’ bill to extend 2017 tax cuts makes it through the final gauntlet in Congress.
H.R. 1, the legislation formerly known as the One Big Beautiful Bill Act, has a provision that would penalize states such as Colorado that use their own funds to cover undocumented people. Colorado covers any undocumented children who sign up for Medicaid, but restricts coverage for adults to pregnant and postpartum women.
The bill would reduce the federal government’s share of the costs for what’s known as the expansion population — adult citizens who earn up to 138% of the poverty line and don’t qualify for Medicaid because of pregnancy or a disability — from 90% to 80%, forcing states to either come up with millions to cover that population or to stop insuring undocumented people.
Colorado could lose about $300 million in federal funding annually if the federal government reduced its share, Gov. Jared Polis said.
The state faces a $700 million budget hole next year and recently announced it would lay off 11 people in the health department if it couldn’t regain a $1.9 million federal grant — meaning it would be fiscally almost impossible to accept a loss of hundreds of millions, even if lawmakers want to continue covering undocumented people.
The Congressional Budget Office estimated about 11.8 million people would lose coverage and the federal government would spend about $1.1 trillion less on health insurance programs if the bill passes in its current form, with the vast majority of cuts coming from Medicaid. At the same time, the bill would increase the deficit by about $3.3 trillion because of tax cuts and increased spending on other priorities.
