Dee Hiatt, Dungarvin Colorado State Director
As the Colorado General Assembly finalizes its $46.8 billion state operating budget, advocates for people with intellectual and developmental disabilities (I/DD) are lamenting Medicaid cuts the Joint Budget Committee approved. Medicaid spending accounts for more than a third of the state’s entire budget, and now legislators are facing a roughly $1 billion budget shortfall.
The approved cuts will impact services for Colorado residents with I/DD, and the people who support them, said Dee Hiatt, State Director for Dungarvin, a national provider of I/DD and other services for individuals in need of supports.
She and her team have been keeping a close eye on the Joint Budget Committee’s deliberations, discussing how to deal with the Medicaid funding reductions. One of the biggest impacts will be to children transitioning into adulthood. Most will no longer be automatically enrolled in the I/DD Medicaid waiver providing full services.
“Instead, they will be put on a different type of waiver that provides limited services and they will be added to a waitlist,” Dee said. “And the Joint Budget Committee reduced what they call the “churn rate.” So now, the state will only enroll one individual into the Medicaid I/DD waiver for every two who leave the system.”
That change is expected to double the Medicaid waiver waitlist, which currently takes individuals roughly seven years to access services. It’s projected that a child turning 18 today won’t be able to get on to the I/DD waiver until they’re about 27 years old, Dee said. “So, all of their care has to be provided by a family member until they get onto the I/DD waiver. That can be extremely difficult, especially if the individual requires 24/7 care — you just can’t do that without it affecting your own health.”
One of the reasons Medicaid became such a large portion of Colorado’s state budget is increasing administration costs, primarily due to the rising costs of services and medications. In addition, lawmakers have voted to expand services and increase provider pay rates over the last several years.
TABOR requires that any tax revenue raised above the cap amount must be refunded to taxpayers. So, even if we have the revenue to fund Medicaid services, we can’t use it.
Colorado could direct more of its tax revenue toward Medicaid funding if it weren’t for the Taxpayer’s Bill of Rights, or TABOR. A constitutional amendment passed by voters in 1992, it requires voter approval for all tax increases, while capping government growth and spending. It also mandates that money raised over the cap amount must be refunded to taxpayers.
“TABOR requires that any tax revenue raised above the cap amount must be refunded to taxpayers. So, even if we have the revenue to fund Medicaid services, we can’t use it,” Dee said.
To counter the effects of TABOR, Dee and other providers are hoping voters pass a 2026 ballot measure that would replace Colorado’s flat income tax rate with a tiered system. It would reduce taxes for some of the state’s lowest earners while increasing taxes for those making $500,000 or more per year. “Honestly, that would solve a lot of the state’s budget problems,” she said.
Although Medicaid cuts will affect Dungarvin Colorado’s operations, Dee and her team are working hard to ensure that all of the individuals they support continue to receive high-quality services. “Ultimately, I hope Colorado goes back to the path we were on previously, which was really about valuing that all people, including people with developmental disabilities, deserve the support they need.”