Mental health clinics in rural Colorado are already under strain, serving clients dealing with depression, addiction, and trauma—often with minimal staff and limited funding. For many residents, Medicaid is the only way to access these vital services.
Now, with proposed federal budget cuts threatening to slash more than $600 million from Colorado’s Medicaid funding, advocates are warning of serious consequences. Rural clinics, which rely heavily on Medicaid, could be hit hardest.
In some counties, Medicaid supports up to 60% of patients and is critical to keeping facilities open, according to a 2017 Colorado Center on Law and Policy report. Chris Lindley, chief population health officer at Vail Health, called Medicaid “by far the best service offering for behavioral health,” noting that commercial insurance doesn’t match Medicaid’s comprehensive coverage and fairer payments.
The cuts come as part of a Republican-backed federal spending bill aimed at reducing bureaucracy and curbing the nation’s rising debt. A University of North Carolina study, commissioned by Senate Democrats, found that 338 rural hospitals nationwide could be at risk—including six in Colorado—if the legislation passes.
Lindley warned that rural healthcare is already on shaky ground. Rising costs, falling reimbursements, workforce shortages, and insurance claim denials have made operations more difficult. Some rural providers depend on Medicaid for over 70% of their revenue, and the proposed cuts could be devastating.
Opponents of the cuts, like Vincent Atchity of Mental Health Colorado, say the consequences will ripple beyond healthcare. “Pulling six rural hospitals out of the state is a disaster,” he said. “It affects not just providers, but local economies and workforces.”
At Naropa Community Counseling in Boulder, Medicaid covers up to 75% of operations. Director Bill Monroe said budget constraints already force them to cut therapy sessions, and further cuts could overwhelm local support networks. “If the cuts are as severe as projected, these partnerships likely won’t be enough,” he said.
The UNC study flagged six Colorado hospitals as especially vulnerable: 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.
According to estimates, more than 123,000 Colorado residents could lose Medicaid coverage if the cuts proceed. The Kaiser Family Foundation puts that number even higher—155,000. Nearly one in four enrollees in the state manages a mental illness or substance use disorder.
Atchity warned that reduced access to care could reverse progress in fighting overdose deaths and increase homelessness and incarceration. “You want to see more overdose deaths? Cut Medicaid,” he said. “This is a strike at the heart of health care for rural communities.”
Some Republicans argue reform is necessary to control costs and eliminate fraud. U.S. Rep. Gabe Evans of Fort Lupton said the system is plagued by waste, citing a $31 billion annual estimate from the Government Accountability Office. He emphasized that reforms—not increased spending—are key to preserving Medicaid for the most vulnerable.
Despite these opposing views, Lindley stressed the importance of unity. “This is a community crisis, and the community has to work together to solve it,” he said. Mental Health Colorado is collaborating with rural leaders across party lines to highlight the stakes.
Atchity concluded, “The state has long faced a mental health crisis. If these cuts go through, everything will get worse. Medicaid is not just part of the system—it is the system in rural communities. Gut it, and you gut everything.”
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