Six rural Colorado hospitals could close in the coming years if Congress adopts the more than $600 million in Medicaid cuts currently included in the Republican tax bill, according to projections commissioned by Senate Democrats.
The listed hospitals are spread across the state, including three on the Western Slope, one in the San Luis Valley and two on the Eastern Plains. The report is based on one version of an evolving bill, so the final result could cause financial distress for fewer, or more, Colorado hospitals than anticipated.
Other types of providers, including community mental health centers and safety net clinics in Colorado, also expect to cut services or close locations, though groups representing the clinics don’t foresee providers going under entirely. The Senate report didn’t examine effects on provider types other than hospitals.
The One Big Beautiful Bill Act backed by President Donald Trump, as passed by the House of Representatives, would add work requirements to Medicaid, increase the cost of health insurance on the individual marketplace and penalize states that cover undocumented immigrants, among other provisions.
A proposed amendment would also reduce states’ ability to draw down more federal funds by taxing health care providers, but its chances in the full Senate aren’t clear.
The Congressional Budget Office projected that about 10.9 million people will lose their insurance nationwide because of provisions in the House version of the bill, and an additional 5.1 million would become uninsured if larger subsidies to buy insurance on the individual marketplace expire this year.
The CBO didn’t produce state-by-state estimates, but other groups have projected that as many as 150,000 Coloradans could lose Medicaid, and an additional 110,000 could drop out of the individual health insurance market.
Congressional Republicans said the bill would protect Medicaid for vulnerable populations by removing undocumented immigrants and adults without disabilities who aren’t working.
Colorado hospitals make list
Researchers at the University of North Carolina at Chapel Hill, in a report requested by Senate Democrats, estimated that 338 rural hospitals nationwide could close if Medicaid cuts go through, including six facilities in Colorado.
The report included hospitals that have an outsized share of patients covered by Medicaid and those that have lost money three years in a row.
The Colorado facilities on the list were:
- Delta Health Hospital in Delta
- San Luis Valley Health Conejos County Hospital in La Jara
- Grand River Health in Rifle
- Prowers Medical Center in Lamar
- Southwest Memorial Hospital in Cortez
- Arkansas Valley Regional Medical Center in La Junta
The list doesn’t include all hospitals that could struggle; Lincoln Health CEO Kevin Stansbury told NBC News that the hospital in Hugo would have to reduce services or close if significant cuts to Medicaid go through.
Delta Health won’t shut its doors, but it would face major challenges from Medicaid cuts, spokeswoman Darnell Place-Wise said.
If fewer patients have Medicaid coverage, the hospital would lose not only the reimbursement for their care, but also payments from a prescription drug program for hospitals serving low-income patients. When the hospital lost the prescription drug payments in 2024, its budget took a $3.2 million hit, she said.
That followed a difficult year in 2023, when the hospital came close to running out of cash while trying to repay pandemic loans from Medicare.
In addition, Delta Health would likely have to spend more on staff to help patients navigate Medicaid’s paperwork, particularly if they have to prove their eligibility twice a year, Place-Wise said. Seeing Congress consider bills that would hit rural hospitals and their patients in so many ways is “frustrating,” she said.
“We’re not closing, but decisions will have to be made about what are the most important services” if the bill passes, she said.
Konnie Martin, CEO of San Luis Valley Health, said she doesn’t think anyone can truly project which hospitals will take the biggest hits. That will depend on the mix of services they offer and how quickly people in their areas lose coverage, among other factors, she said.
“I think there’s no question that this bill is going to be devastating to rural hospitals if it passes,” she said.
For now, all hospitals can do is make their operations as lean as possible — not that rural health care has much fat to cut, she said — and examine which services are least profitable and most dependent on Medicaid. Typically, behavioral health care and obstetrics lose out in that calculation, though hospitals that already cut them would have to look elsewhere.
“There’s only so much that any health care organization can do if they’re not being paid,” she said.
The other hospitals on the list didn’t respond to The Denver Post’s questions about the bill’s possible effects by press time.
‘Costs don’t go away’
The left-leaning Urban Institute and the Robert Wood Johnson Foundation estimated that Medicaid, private insurance plans and individuals in Colorado would spend about $12.9 billion less on health care over the next 10 years than they would have if nothing changed. At the same time, the value of uncompensated care provided in the state would increase by $6.1 billion.
Hospitals would receive about $4.6 billion less, and provide about $1.6 billion more in uncompensated care, according to the projections.
Rural hospitals are particularly vulnerable if significant numbers of people covered by Medicaid become uninsured, because they have fewer patients with relatively high-paying commercial insurance to offset any increase in uncompensated care.
About half of rural facilities in the state consistently lose money on operations, which they offset with a hodgepodge of local taxes and other revenue, said Megan Axelrod, senior director of regulatory policy and federal affairs at the Colorado Hospital Association.
The arrangements work, but they’re “fragile,” and couldn’t withstand a major hit to Medicaid payments, she said.
Colorado hasn’t lost a rural hospital in about 40 years, but large-scale Medicaid reductions could be the factor that pushes some beyond their ability to find workarounds, Axelrod said.
“Those (care) costs don’t go away” when patients lose their insurance, she said.
Fewer locations, services
Safety net outpatient clinics also project retrenchment if significant numbers of Coloradans lose Medicaid coverage.
The Colorado Community Health Network estimated that about 133,000 patients of federally qualified health centers, or about one-fifth of those who use the centers, would lose Medicaid coverage if the GOP bill passes.
Most of those patients would become uninsured, and the centers would only collect a small amount from sliding fee scales when they came in for treatment, said Ross Brooks, the group’s president and CEO. The centers could lose as much as $637 million over the next four years, forcing them to lay off staff, close locations or stop offering services that generate the most red ink, he said.
Some centers already had to pull back on their services because patients who lost Medicaid at the end of the COVID-19 public health emergency haven’t managed to reenroll or find other coverage, Brooks said. About 519,000 people lost coverage during the first year after the state no longer continued insuring everyone who had enrolled in Medicaid, though some may have returned to the program since.
“Walking into the summer, we’re already in a pretty negative position,” he said.
Federally qualified health centers have a mission to help anyone who comes through their doors, but to do that, they may have to sacrifice services such as mental health or dental care, Brooks said.
“We can’t take on hundreds of thousands of uninsured patients and survive financially” without major changes, he said.
Behavioral health safety net providers haven’t estimated how many patients might lose coverage, but since about 60% of their revenue comes from Medicaid, any losses would be significant, said Kara Johnson-Hufford, CEO of the Colorado Behavioral Health Council.
They were already struggling in the aftermath of Medicaid unwinding, with some closing clinics or laying off staff, she said.
“There’s no cushion to fall back on,” she said.
Work requirements would be difficult for people with severe mental illnesses to navigate, especially if they have to frequently prove they’re still sick enough to qualify for an exemption, Johnson-Hufford said. Even people who manage to keep their coverage may not be able to get care, because the bill would allow copays of up to $35, she said.
Safety net providers want uninsured people to come in and pay what they can rather than going without health care entirely, Brooks said. People who don’t have insurance die younger than those who do, at least partially because they avoid care until a condition becomes an emergency, he said.
“We’ve made such good progress over the last couple of decades” getting patients into primary care, he said. “This seems like such a backward step.”
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