Mental health care in rural Colorado is already under strain. Clinics often serve clients facing complex challenges like depression, addiction, and trauma, all while operating with limited staff and tight budgets. For many, Medicaid is the only way to access care.

In some counties, Medicaid supports up to 60 percent of patients and is critical to keeping clinics open, according to a 2017 report from the Colorado Center on Law and Policy. Chris Lindley, Chief Population Health Officer at Vail Health, called Medicaid “by far the best service offering for behavioral health.” He added, “We would love if commercial insurance covered the same services that Medicaid covers, because it’s better care, it’s more comprehensive care, and it’s fairer payment.”

But that safety net may be unraveling.

A Republican-backed federal budget plan called the “One Big Beautiful Bill” would cut Medicaid funding by over $600 million in Colorado. A study by the University of North Carolina, commissioned by Senate Democrats, warns these cuts could lead to the closure of 338 rural hospitals nationwide, including six in Colorado.

Lindley said the threat is very real. “Rural healthcare is extremely challenging. Costs are going up, but reimbursements are going down,” he said. “Those rural hospitals had such small margins to begin with that any degradation puts them in a very dangerous situation.”

He pointed to broader economic pressures as well: workforce shortages, rising housing costs, and insurance companies “finding ways to deny claims better and better.” For behavioral health providers in particular, the impact could be devastating. “When there’s a cut to Medicaid, it’s really, really going to hurt them,” Lindley said. Some providers rely on Medicaid for more than 70 percent of their revenue.

While Medicaid has served as a crucial safety net for low-income individuals, its growing costs have become a concern for both state and federal policymakers. The Congressional Budget Office projects that federal Medicaid spending will rise from $557 billion in 2024 to more than $850 billion by 2034, driven largely by increased enrollment and rising healthcare costs.

Much of this growth stems from Medicaid expansion under the Affordable Care Act (ACA), which allowed more low-income adults to qualify for coverage. The federal government initially covered 100 percent of expansion costs, but that share has gradually decreased to 90 percent, prompting some states and lawmakers to reconsider how expansion affects state budgets and long-term sustainability.

Some critics argue that the higher federal match rate for Medicaid expansion populations, primarily low-income adults, could lead states to prioritize these enrollees over traditional groups such as children, seniors, and people with disabilities. Meanwhile, the Government Accountability Office has raised ongoing concerns about oversight, noting Medicaid made an estimated $31 billion in improper payments in 2024, including to ineligible recipients or those lacking proper documentation.

Despite the debate over federal Medicaid spending amid concerns about the national debt and deficit, research shows Medicaid expansion has brought economic and public health benefits. A Health Affairs study found expansion states saw significant drops in hospital uncompensated care, and rural providers reported greater financial stability. The Bipartisan Policy Center notes that while reforms may improve efficiency, framing Medicaid cuts solely as a way to save money risks worsening access in rural and underserved areas already facing healthcare shortages.

The University of North Carolina study identified six rural Colorado hospitals at risk of closure due to Medicaid cuts: 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; and Arkansas Valley Regional Medical Center in La Junta. The study based this at-risk designation on hospitals serving a high share of Medicaid patients and experiencing operating losses.

Vincent Atchity, president of Mental Health Colorado, warned these cuts could send shockwaves through local economies. “Pulling six rural hospitals out of the state is a disaster, not just for healthcare providers but also for local economies and workforces,” he said.

Even in more urban areas, providers are bracing for impact. At Naropa Community Counseling in Boulder, Medicaid accounts for up to 75 percent of revenue. “Sometimes we have to reduce sessions from four to two to avoid losing revenue,” said director Bill Monroe. “There will be limits on how many clients we can serve.”

Monroe added that partnerships with local organizations might help fill some gaps, but the scale of the projected cuts would overwhelm even the most resourceful networks. “If the cuts are as severe as projected, these partnerships likely won’t be enough to address all the challenges clinics and patients face,” he said.

Advocates say the impact could cascade into broader public health crises. “If [people] go without care… we’ll see the worst outcomes: increased suicidal ideation, increased homelessness, increased incarceration, increased hospitalization,” Lindley said.

The nonprofit Inseparable estimates that more than 123,000 Coloradans could lose Medicaid coverage. Nearly one in four of the state’s Medicaid enrollees is managing a mental illness or substance use disorder, according to the same Inseparable report. It also links a recent decline in overdose deaths to improved access to treatment through Medicaid, progress advocates warn could be undone if funding is cut. Meanwhile, the Kaiser Family Foundation estimates the number of Coloradans who could lose Medicaid coverage could be as high as 155,000.

“You want to see more homelessness, more substance use, more overdose death? Cut Medicaid,” Atchity said. “This is a strike at the heart of healthcare for rural communities.”

That assessment has drawn pushback from Rep. Gabe Evans (R-Fort Lupton), who told Colorado Public Radio that targeted reforms, not increased funding, are needed to preserve Medicaid’s long-term viability. “There’s a ton of fraud, waste, and abuse in the system right now,” he said, citing the $31 billion annual estimate from the Government Accountability Office. “Making sure that we’re protecting this program for our most vulnerable by cutting out a lot of that fraud, waste and abuse… that’s the main goal.”

In the same interview, Evans, a member of the House Energy and Commerce Committee, said providers in his district support oversight efforts. “Well, I just actually finished up a meeting with a bunch of providers… they actually left that meeting feeling more reassured rather than worried,” he said. Regulatory streamlining, he added, will be key to keeping rural hospitals open.

Despite differing views, advocates like Lindley stress the need for collective action. “This is a community crisis, and the community has to work together to solve it,” he said. “We need to advocate together as a behavioral health system across the state.”

Mental Health Colorado is working with rural county commissioners from both parties to raise awareness. “This is affecting communities that supported the administration pushing these cuts,” Atchity said. “They may not realize the damage until it’s too late.”

Still, he vows to keep sounding the alarm. “The state has long faced a mental health crisis, with high suicide rates, overdose deaths, and an overreliance on crisis response and incarceration. All that will get worse with these cuts.”

Medicaid, he added, “is not just part of the system. It is the system, especially in rural communities. And when you gut it, you gut everything.”

Mental health care in rural Colorado is already under strain. Clinics often serve clients facing complex challenges like depression, addiction, and trauma, all while operating with limited staff and tight budgets. For many, Medicaid is the only way to access care.

In some counties, Medicaid supports up to 60 percent of patients and is critical to keeping clinics open, according to a 2017 report from the Colorado Center on Law and Policy. Chris Lindley, Chief Population Health Officer at Vail Health, called Medicaid “by far the best service offering for behavioral health.” He added, “We would love if commercial insurance covered the same services that Medicaid covers, because it’s better care, it’s more comprehensive care, and it’s fairer payment.”

But that safety net may be unraveling.

A Republican-backed federal budget plan called the “One Big Beautiful Bill” would cut Medicaid funding by over $600 million in Colorado. A study by the University of North Carolina, commissioned by Senate Democrats, warns these cuts could lead to the closure of 338 rural hospitals nationwide, including six in Colorado.

Lindley said the threat is very real. “Rural healthcare is extremely challenging. Costs are going up, but reimbursements are going down,” he said. “Those rural hospitals had such small margins to begin with that any degradation puts them in a very dangerous situation.”

He pointed to broader economic pressures as well: workforce shortages, rising housing costs, and insurance companies “finding ways to deny claims better and better.” For behavioral health providers in particular, the impact could be devastating. “When there’s a cut to Medicaid, it’s really, really going to hurt them,” Lindley said. Some providers rely on Medicaid for more than 70 percent of their revenue.

While Medicaid has served as a crucial safety net for low-income individuals, its growing costs have become a concern for both state and federal policymakers. The Congressional Budget Office projects that federal Medicaid spending will rise from $557 billion in 2024 to more than $850 billion by 2034, driven largely by increased enrollment and rising healthcare costs.

Much of this growth stems from Medicaid expansion under the Affordable Care Act (ACA), which allowed more low-income adults to qualify for coverage. The federal government initially covered 100 percent of expansion costs, but that share has gradually decreased to 90 percent, prompting some states and lawmakers to reconsider how expansion affects state budgets and long-term sustainability.

Some critics argue that the higher federal match rate for Medicaid expansion populations, primarily low-income adults, could lead states to prioritize these enrollees over traditional groups such as children, seniors, and people with disabilities. Meanwhile, the Government Accountability Office has raised ongoing concerns about oversight, noting Medicaid made an estimated $31 billion in improper payments in 2024, including to ineligible recipients or those lacking proper documentation.

Despite the debate over federal Medicaid spending amid concerns about the national debt and deficit, research shows Medicaid expansion has brought economic and public health benefits. A Health Affairs study found expansion states saw significant drops in hospital uncompensated care, and rural providers reported greater financial stability. The Bipartisan Policy Center notes that while reforms may improve efficiency, framing Medicaid cuts solely as a way to save money risks worsening access in rural and underserved areas already facing healthcare shortages.

The University of North Carolina study identified six rural Colorado hospitals at risk of closure due to Medicaid cuts: 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; and Arkansas Valley Regional Medical Center in La Junta. The study based this at-risk designation on hospitals serving a high share of Medicaid patients and experiencing operating losses.

Vincent Atchity, president of Mental Health Colorado, warned these cuts could send shockwaves through local economies. “Pulling six rural hospitals out of the state is a disaster, not just for healthcare providers but also for local economies and workforces,” he said.

Even in more urban areas, providers are bracing for impact. At Naropa Community Counseling in Boulder, Medicaid accounts for up to 75 percent of revenue. “Sometimes we have to reduce sessions from four to two to avoid losing revenue,” said director Bill Monroe. “There will be limits on how many clients we can serve.”

Monroe added that partnerships with local organizations might help fill some gaps, but the scale of the projected cuts would overwhelm even the most resourceful networks. “If the cuts are as severe as projected, these partnerships likely won’t be enough to address all the challenges clinics and patients face,” he said.

Advocates say the impact could cascade into broader public health crises. “If [people] go without care… we’ll see the worst outcomes: increased suicidal ideation, increased homelessness, increased incarceration, increased hospitalization,” Lindley said.

The nonprofit Inseparable estimates that more than 123,000 Coloradans could lose Medicaid coverage. Nearly one in four of the state’s Medicaid enrollees is managing a mental illness or substance use disorder, according to the same Inseparable report. It also links a recent decline in overdose deaths to improved access to treatment through Medicaid, progress advocates warn could be undone if funding is cut. Meanwhile, the Kaiser Family Foundation estimates the number of Coloradans who could lose Medicaid coverage could be as high as 155,000.

“You want to see more homelessness, more substance use, more overdose death? Cut Medicaid,” Atchity said. “This is a strike at the heart of healthcare for rural communities.”

That assessment has drawn pushback from Rep. Gabe Evans (R-Fort Lupton), who told Colorado Public Radio that targeted reforms, not increased funding, are needed to preserve Medicaid’s long-term viability. “There’s a ton of fraud, waste, and abuse in the system right now,” he said, citing the $31 billion annual estimate from the Government Accountability Office. “Making sure that we’re protecting this program for our most vulnerable by cutting out a lot of that fraud, waste and abuse… that’s the main goal.”

In the same interview, Evans, a member of the House Energy and Commerce Committee, said providers in his district support oversight efforts. “Well, I just actually finished up a meeting with a bunch of providers… they actually left that meeting feeling more reassured rather than worried,” he said. Regulatory streamlining, he added, will be key to keeping rural hospitals open.

Despite differing views, advocates like Lindley stress the need for collective action. “This is a community crisis, and the community has to work together to solve it,” he said. “We need to advocate together as a behavioral health system across the state.”

Mental Health Colorado is working with rural county commissioners from both parties to raise awareness. “This is affecting communities that supported the administration pushing these cuts,” Atchity said. “They may not realize the damage until it’s too late.”

Still, he vows to keep sounding the alarm. “The state has long faced a mental health crisis, with high suicide rates, overdose deaths, and an overreliance on crisis response and incarceration. All that will get worse with these cuts.”

Medicaid, he added, “is not just part of the system. It is the system, especially in rural communities. And when you gut it, you gut everything.”