Report: More than 563,000 Coloradans expected to join Medicaid this year as COVID layoffs hit insurance

DENVER — A new report by the Colorado Health Institute predicts that about 563,000 state residents will join the Medicaid rolls by December due to various COVID-19-related losses in insurance, a development that could inflict more financial pain on the state’s hospitals.

The report out Wednesday afternoon estimates that the majority of those new enrollees are coming from more than 517,000 Coloradans who have filed for initial unemployment benefits in the last several months. Those newly-unemployed lost not only their jobs, but also employer-sponsored health insurance.

That figure is expected to drop significantly at the start of 2021, when the continuous-coverage requirement enforced by one of the federal coronavirus relief packages is expected to lapse.

However, the financial damage could place more pain on hospitals, which have already felt the burden of preparing for COVID-19 waves on their books.

Medical providers took on additional costs to purchase equipment and outfit new intensive-care wings at the onset of the pandemic in Colorado, and they have lost millions in revenue after Gov. Jared Polis banned elective procedures for several weeks in order to preserve hospital resources and prevent spread to patients.

The Colorado Hospital Association estimates that state providers lost $1.2 billion in cancelled procedures due to COVID-10. Banner Health, which operates heavily in Northern Colorado, furloughed between 5% and 7% of its staff nationwide in late April, including about 70 in Colorado, after elective procedures across the country were halted.

Medicaid reimburses providers at lower rates than privately held insurance policies, meaning that hospitals may lose as much as $500 million in revenue in fiscal years 2020 and 2021, the report estimates.

“Whether the impact is significantly lower in future years will depend on whether the pandemic is kept under control, allowing the economy to recover and Coloradans to get back to their job-based insurance,” the report said.

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