State health officials and hospital leaders have agreed on a proposed $50 million transfer of provider fees to shore up basic Medicaid in Colorado, while federal officials on Thursday urged states to also consider cuts in optional benefits to balance their threatened Medicaid budgets.

Hospitals and advocates for the poor hail the first year of the provider fee — hospitals taxing themselves to get more Medicaid funding through a federal match — as a success in expanding insurance coverage in Colorado.

“We pitched it as a win-win-win for consumers, hospitals and the state, and I think it’s absolutely proven to be that,” said Cody Belzley, vice president of the Colorado Children’s Campaign and an architect of the fee in the administration of former Gov. Bill Ritter.

It allowed the state to expand insurance last year to 30,000 people who previously made too much to qualify.

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Apache helicopters loaded with Blue Spear rockets fly in support of training exercises with Fort Carson’s 3rd Brigade Combat Team downrange at Fort Carson Thursday, January 21, 2010 during training. Photo by THE GAZETTE FILE

MARK REIS