Providing health care to children and pregnant people who would qualify for Medicaid if not for their immigration status will cost Colorado more than six times what was projected this year.
Because of higher-than-forecast enrollment, the state is expecting that the Cover All Coloradans program will cost the state $104.5 million in the fiscal year that began July 1. When Democratic state lawmakers passed a bill in 2022 launching the health insurance safety net initiative, nonpartisan fiscal analysts estimated the price tag would be $14.7 million for 2025-26.
That 611% cost-over-projections is now causing a major headache for the legislature as it tries to address a $1 billion gap between what it costs to continue offering the level of state programs and services and how much is available to spend. A major cause of the shortfall is programs, like Cover All Coloradans, that the Democratic majority at the Capitol created in recent years.
“At the time we made budget decisions — whether it was during the pandemic, following the pandemic — we made those decisions based on the forecasts in front of us,” said House Speaker Julie McCluskie, a Dillon Democrat who approved much of the spending when she was a state budget writer. “There have been unanticipated impacts.”
McCluskie was also a lead sponsor of the 2022 bill that created Cover All Coloradans.
The program is a Medicaid look-alike for kids and pregnant women whose immigration status prevents them from receiving traditional Medicaid, the health insurance program for low-income families. Those who are eligible may be living in the U.S. without authorization or may be in the country legally but still do not qualify for Medicaid.
Colorado pays for kids on the program entirely out of state dollars, but it does, at least for now, receive some federal funding for pregnant women.
Nonpartisan fiscal analysts at the Capitol estimated in 2022 that about 3,700 immigrants who are children or are pregnant would enroll in Cover All Coloradans this fiscal year. The actual number is nearly 28,000, leading to ballooning costs.
“The fiscal note missed pretty badly,” Eric Kurtz, a chief legislative budget and policy analyst, told the Joint Budget Committee last week.
In a statement to The Colorado Sun, the state Department of Health Care Policy and Financing, which oversees Medicaid and Cover All Coloradans, partly blamed immigration rates that were higher than expected.
The original cost estimate was based on the number of eligible people living in Colorado at the time as well as a projection of the number of new immigrants likely to move to the state.
“One of the primary drivers in total expenditure in this program has been higher than anticipated, and growing, enrollment,” the department’s statement read.
The Joint Budget Committee meets at the Colorado Capitol complex in Denver on Jan. 6, 2025. (Jesse Paul, The Colorado Sun)Another, though smaller, factor is that the state underestimated how much each child on the program would cost, the department said. Because Colorado had never covered immigrant children before, it did not have a reliable understanding of how expensive their medical care would be. So the state looked at early data from a similar program in Oregon, as well as academic research, and estimated that children on Cover All Coloradans would cost less per capita than the typical child on Medicaid.
That proved not to be true, and Colorado is now using data from its own experience to project future costs for the program.
“Forecast assumptions, therefore, have been updated based on the 2025 calendar year observed cost, which now reflect per capita costs similar to children enrolled in traditional Medicaid,” the department said in its statement.
Cover All Coloradans launched Jan. 1, 2025. In its first six months, the program’s costs exceeded projections by about $18 million, or 260%.
The imbalance is expected to worsen in the 2026-27 fiscal year, which begins July 1. The cost was projected to be about $14.7 million. It’s now expected to be about $127.4 million.
This isn’t the first time the legislature’s fiscal analysts have erred on cost estimates for a program created for immigrants. A 2013 law allowing people living in the U.S. illegally to get a Colorado driver’s license was passed with the expectation that far fewer people would apply, leading to a big backlog that the legislature later had to rectify.
Given the state’s budget concerns, the legislature is looking to pare back Cover All Coloradans.
The program insures about 20,000 children and another 7,000 pregnant women. Most of those children have pretty routine care needs and cost a relatively small amount to cover. But a small subset of those kids — 49, as of right now — receive more expensive specialty long-term care for disabilities.
In a briefing document, the Joint Budget Committee’s nonpartisan staff warned, “Even a trickle of utilizers of long-term services and supports could grow the budget exponentially.”
A news conference at the Colorado Capitol in Denver on April 8, 2025, where Democrats discussed their bill to shield people living in the U.S. illegally from deportation. (Jesse Paul, The Colorado Sun)Worried about that risk, the JBC voted last week to end long-term care benefits for kids with disabilities under the program beginning July 1. Those who are already covered by the benefit, at an average cost of about $11,000 each per year, will be grandfathered in with a cap on their benefits.
(Because pregnant women cycle off Cover All Coloradans shortly after giving birth, they do not receive long-term care.)
Lawmakers also voted to place a cap of $750 per year on dental benefits and to make some other changes on coverage structure.
It’s unclear exactly how much those changes would save, but it’s a fraction of Cover All Coloradans’ cost. The reductions are less severe than what JBC staff recommended, which would have saved $17 million next fiscal year.
The cuts still need to be approved by the full legislature.
Republicans have complained about the program since its creation. Now that the cost overruns are coming into focus, conservatives are becoming more vocal about the price tag.
State Sen. Barbara Kirkmeyer, a Brighton Republican who sits on the JBC, thinks Cover All Coloradans should be eliminated entirely. She understands that would leave people uninsured, but she argues the money would be better spent on Medicaid programs for citizens for whom there is a federal funding match.
“Just from a fiscal point of view, we’re better off utilizing our funds in such a way where we pull down that federal dollar,” she said.
Democrats, who are in charge at the Capitol, have shown no willingness to get rid of Cover All Coloradans altogether.
“Just the long-term cost of this program, we have to rein it in,” Sen. Jeff Bridges, a Greenwood Village Democrat who is a member of the JBC, said during a meeting last week.
The program’s future will be debated by the full legislature after the JBC finishes drafting the budget in the coming weeks.
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