Colorado hospitals could see billions less in revenue while having to absorb more uncompensated care if fewer people have health insurance as a result of President Donald Trump’s domestic policy bill, according to a new study.

Republicans in Congress are advancing the sprawling legislation, dubbed the One Big Beautiful Bill Act, to deliver Trump’s agenda on taxes, health care, energy, immigration, and more.

On health care, the bill restricts eligibility for Medicaid and cuts funding for states that cover abortions and undocumented immigrants. For commercial insurance plans purchased on Affordable Care Act marketplaces, the bill shortens enrollment periods, requires more paperwork, and allows for the expiration of heightened benefits passed under former President Joe Biden.

Taken together, the provisions could lead to roughly 16 million Americans losing their health insurance over the next decade, according to an analysis by the nonpartisan Congressional Budget Office.

That could have major ramifications for health care providers.

A state-by-state analysis by the Urban Institute, a Washington-based think tank, and the Robert Wood Johnson Foundation, a national philanthropy organization, found that in Colorado, it would mean $4.6 billion less in revenue for hospitals. At the same time, hospitals would shoulder $1.6 billion more in uncompensated care.

“It really scares me, when you’re looking at the scope of some of the changes,” said Megan Axelrod, vice president of regulatory and federal affairs for the Colorado Hospital Association.

Hospitals face a challenging financial landscape

More than 70% of Colorado hospitals already run on unsustainable margins, while the cost of providing uncompensated care has risen by 130% since 2019, according to a 2024 report by the hospital association.

Much of that is due to an increase in uninsured patients during the “Medicaid unwind” period in 2023, when Congress ended automatic Medicaid reenrollment as part of its COVID-19 response, which resulted in an estimated 575,000 Coloradans losing insurance.

Further cuts to Medicaid, along with changes to the Affordable Care Act, would be “really devastating when it comes to the financial viability (of hospitals) as well as access to care,” Axelrod said.

Republicans in Congress have largely defended the cuts in their megabill as a way to weed out waste, fraud, and abuse in the nation’s health care system, while making social programs like Medicaid more sustainable.

The House-passed version of the One Big Beautiful Bill Act would reduce Medicaid funding by nearly $800 billion. Senate Republicans are pursuing even deeper cuts as they look for ways to offset an extension of tax breaks primarily for wealthier individuals and businesses.

Axelrod said hospitals “support systems that are effective and efficient, and we also completely understand the desire to implement policies to achieve those goals.” But she worries Republicans’ proposals will kick patients who are eligible for Medicaid off the program due to administrative burdens, much as it did with the Medicaid unwind.

She is also highly concerned about a new proposal in the Senate version of the bill that would drastically lower provider fee rates for hospitals.

Several states, including Colorado, have some form of fee or tax they levy on hospitals, which generate revenue used to draw larger matching funds from the federal government and increase the reimbursement rate for Medicaid.

With Colorado forced to cut $1.2 billion from its budget this year, and projecting structural deficits in the future, Axelrod said the state will be hard pressed to fill the void left from federal cuts.

‘A precursor to rural hospitals closing’

There are more than 40 rural hospitals in Colorado, half of which were operating with negative margins as of 2024, according to the Colorado Rural Health Center.

The center’s chief executive officer, Michelle Mills, said if the provisions in Republicans’ bill are passed, “This will be a precursor to rural hospitals closing.”

Rural hospitals typically face greater budgetary pressures because they serve a larger population of people on Medicaid and Medicare, which have lower reimbursement rates for hospitals compared to commercial insurance.

The Colorado Health Association said that last year, Medicaid and Medicare under reimbursed hospitals by more than $4.1 billion. Rising costs of providing care due to inflation, coupled with a workforce shortage, only add to the challenges.

Additionally, rural resort communities that straddle the Interstate 70 corridor have the highest rate of uninsured people in the state, according to 2023 data from the Colorado Health Institute.

Fewer people with insurance as a result of Trump’s bill means they’ll be less likely to receive primary care, which Mills said is the most cost-effective form of health care. That could lead to more people developing severe conditions that go undiagnosed and untreated, eventually landing them in the emergency room, where the cost of providing care is highest.

When a patient is unable to pay out of pocket, a hospital will put them on a payment plan. Colorado law, however, caps the duration of that plan to 36 months, after which point the hospital must eat the rest of the remaining cost.

Rural hospitals are already subsidizing many community services at their own expense, Mills said.

“Many of our rural hospitals, they help subsidize emergency transport services, and sometimes, that’s to the tune of $700,000 a year,” she said. “Many of them have nursing homes and assisted living that exist, as well, that are money losers, up to maybe $1 million a year. But our rural facilities tend to try to keep those services as much as possible because that’s a need in their community.”

Mills expects that if Republicans’ bill passes, hospitals could begin to cut services to stave off having to close their doors. Typically, OB services for women who are pregnant and postpartum will be the first to go, she said.

Specialists and other non-essential providers and services would likely also be cut as hospitals look to preserve their core functions amid financial headwinds. Outside of care access, hospitals tend to be one of the top three employers in Colorado, including in rural parts of the state.

“So they’re an economic driver for that community’s survival,” Mills said.

Hospitals could also hike their rates in order to cover more of their expenses, which would drive up insurance premiums across the board, health care advocates say.

“That affects everyone in the community,” said Adam Fox, deputy director for the Colorado Consumer Health Initiative, in a recent interview. “It doesn’t matter if they have Medicaid or commercial insurance.”

Republicans are aiming to pass the One Big Beautiful Bill Act by July 4, but policy disagreements in the Senate could delay the timeline. Any changes made in the Senate will send the policy back to the House, where it will face another vote before it can move to Trump’s desk for his signature.

Republicans control the Senate by a 53-47 majority and the House by a 220-212 majority.

Published on SummitDaily.com.