Federal & State Medicaid Updates 2026

May 8, 2026

Gov. Jared Polis signs $46.8 billion state budget – Federal tax changes, rising Medicaid costs forced deep cuts to close $1 billion gap

April 21, 2026 

Limits to health insurance program for immigrants approved by Colorado lawmakers

April 16, 2026

Colorado Legislature gives final approval to $46.8B state budget

April 7, 2026

Questions and Answers About Colorado’s Budget Shortfall

April 2, 2026

Colorado Gov. names new health care leaders after abrupt departures – https://governorsoffice.colorado.gov/governor/news/governor-polis-makes-cabinet-announcement

April 1, 2026

Lawmakers Finish Drafting Colorado’s Budget to Address Roughly $1.5 billion shortfall – https://coloradosun.com/2026/04/01/colorado-budget-draft-billion-shortfall-2026/

March 30, 2026

Medicaid Director resigns – https://coloradosun.com/2026/03/30/medicaid-director-resigns-no-confidence-vote/

February 26, 2026

Colorado 2026 Legislative Session (Medicaid + Budget Cuts Impact Home Care)

A major statewide factor shaping the 2026 home care industry is the Colorado legislative session, which began with a significant projected budget shortfall.

Key issue: Colorado faces an $850 million budget gap, and legislators have indicated that this year’s budget solutions will likely require cuts, with Medicaid as a central target due to its size in the state budget.

The practical risk for agencies includes:

  • possible Medicaid provider rate constraints
  • potential limits on home caregiver hours
  • increased documentation and utilization controls
  • reduced flexibility for service delivery expansions

✅ Administrator takeaway – Agencies should prepare for 2026 as a year of cost containment + tighter oversight, especially for Medicaid-funded services.

In 2026, home care administrators will be asked to do more with less—maintaining quality care while adapting to wage changes, workforce recruitment evolution, and a budget-constrained regulatory landscape. CHC will continue providing training, compliance tools, and administrator resources to help agencies stay strong, stable, and audit-ready.

November 2025

Colorado Medicaid & LTSS Sustainability
Colorado’s fiscal constraints and why H.R.1 matters _ State spending has to be reduced immediately and in the long
term_ Why Colorado Medicaid spending in particular must be reined in _The state has made significant investments into the Long-Term Services and Supports (LTSS) system, but the growth is unsustainable_ Growth is outpacing available funding_ Key Pressure Points: https://hcpf.colorado.gov/medicaid-sustainability-and-ltss

Editorial 7/1/2025

You’re not imagining it—things feel uncertain right now.

If you’ve been feeling uneasy about headlines around work requirements or possible federal Medicaid cuts, you’re not alone. These are real concerns, and they’re weighing on a lot of providers right now.

In an effort to help you focus on what’s actionable—not just alarming—we’ve pulled together a clear breakdown of what’s happening, what’s proposed, and what you can do now to steady your agency.

I’ve been in your shoes (former agency owner/operator with HCBS and skilled services in Colorado), and I remember how exhausting it can feel when policies shift. It’s hard to know what’s noise and what actually requires action.

That’s what this month’s update is for: cutting through the confusion and helping you move forward with confidence.

Connie McWilliams

Here are the links to the original sources of recent developments and concerns—drawing on Colorado Medicaid materials, the KFF analysis on fraud, the work requirements fact sheet, and broader state context using these documents:

a) Understanding the Impact of Federal Funding Cuts to Medicaid:

https://hcpf.colorado.gov/impact-of-federal-funding-cuts-to-medicaid

b) Colorado Medicaid Executive Director, 2023-2024 Report to the Community:

https://hcpf.colorado.gov/2024-report-to-community,

c) Medicaid Fact Sheet on Work Requirement in Colorado

https://hcpf.colorado.gov/sites/hcpf/files/Work_Requirements_Fact_Sheet.pdf (attachment)

d) July 3, 2025 Understanding Federal Funding Cuts of Medicaid, Kaiser Family Foundation on Medicaid Fraud, Waste, Abuse and Improper Payments: https://www.kff.org/medicaid/issue-brief/5-key-facts-about-medicaid-program-integrity-fraud-waste-abuse-and-improper-payments/

e) July 2025 Colorado Medicaid At A Glance:  https://myemail.constantcontact.com/At-a-Glance-July-2025.html?soid=1120776134797&aid=wY6GN8AsyBg

f) CMS Finds 2.8 Million Americans Potentially Enrolled in Two or More Medicaid/ACA Exchange Plans: https://www.cms.gov/newsroom/press-releases/cms-finds-28-million-americans-potentially-enrolled-two-or-more-medicaid/aca-exchange-plans

Key Points

🧭 What’s Changing—and What’s Not

⏳ New Work Requirements Are Coming—But Slowly

Colorado’s April 2025 fact sheet confirms: new Medicaid work requirements won’t start until late 2026. When they do, adults ages 19–64 will need to work, volunteer, or train for 80 hours/month—roughly 20 hours a week.
📌 No changes are happening in 2025.

This gives the state time to:

  • Update systems
  • Train county staff
  • Improve automation to reduce confusion

There’s time to prepare—and we’ll help you stay ahead of it.

⚖️ Colorado Faces Real Risks from Federal Cuts

Due to TABOR and the state’s balanced-budget rules, Colorado can’t raise taxes or borrow to fill funding gaps. So if the federal government cuts Medicaid funding—even by $1 billion—it would leave a 20% shortfall in the state’s Medicaid general fund.

That’s not just a number—it impacts rates, services, and staffing decisions statewide. Being informed now helps you plan responsibly.

🕵️‍♂️ Fraud Efforts Are Aimed at Systems, Not Patients

Despite some public worry, Medicaid fraud efforts are not targeting beneficiaries. The KFF July 2025 analysis shows that most improper payments stem from provider billing errors or fraud, not patient misuse.

In fact:

  • FY 2023: $3.4 billion recovered across Medicaid & Medicare
  • FY 2024: 1,151 convictions & $1.4 billion in state-level recoveries

📌 Medicaid Fraud Units generate $3.46 back for every $1 spent on enforcement.

So while scrutiny is increasing, it’s focused on accountability—not cutting off care.

🛡️ Long-Term Care Programs Aren’t Being Dismantled

There’s been a lot of noise about long-term care being at risk. But the May 2025 “LTSS” Fact Sheet is clear:
This is a transition year, with no planned reductions to long-term supports or essential benefits. The focus is on preserving core services, not eliminating them.

💬 Why This Isn’t Armageddon

Let’s be clear: this isn’t business as usual—but it’s not a crisis either. Here’s why:

    • Timing is on our side. Work requirements and audits are gradual and don’t begin until December 2026.
    • Patients aren’t being targeted. Oversight is focused on providers and systemic billing—not individuals.
    • Colorado is preparing. HCPF is investing in improved systems, staff training, and support tools to help providers and members through the transition.
    • The safety net remains intact. There’s no plan to cut long-term care or essential HCBS benefits in 2025.