Colorado Gov. Jared Polis signs state budget with $1.2B in cuts

The state this year saw a dramatic increase in Medicaid costs driven by more patients using long-term care. Medicaid and K-12 education are the two biggest spending areas for the state’s general fund.

With the government-subsidized health care program facing an uncertain future at the federal level, lawmakers sought to minimize state cuts to Medicaid.

The 2025-26 budget includes a 1.6% increase to the state’s Medicaid reimbursement rate. Because the rate increase is below the rate of inflation, however, it will effectively serve as a cut for health care providers.