A $293 million tab

A $293 million tab. That is what Colorado spent on “peer and support services” under Medicaid last year. For context, the state originally projected this line item would cost $35,000 in its first year. The gap between the fiscal note and the actual ledger is not a rounding error; it is a structural failure that is now forcing the state to slash services to keep the budget from bleeding out.

The pressure is coming from the top down. State Medicaid spending is projected to blow past its budget by nearly $1 billion next year. To rein in the hemorrhage, the Department of Health Care Policy and Financing has targeted peer counseling for cuts. This category includes addiction recovery coaches — individuals with lived experience who provide support without holding clinical licenses.

The impact is already hitting the ground in northern Colorado. Brian Bauer, whose nonprofit Abundance Foundation provides addiction counseling and sober living to people exiting prison or homelessness, received a 90-day notice terminating his contract with the regional Medicaid agency. The math is stark:

• 230 clients will lose their current support network.
• 11 recovery coaches will be displaced.
• Three sober living houses will close their doors.

Bauer doubts his clients will simply migrate to another provider. Similar services are shrinking statewide, leaving fewer safety nets for those falling through the cracks.

The backlash in the legislature is loud. Sen. Judy Amabile, a Boulder Democrat and chair of the state Commission on Medicaid, argued that paying for unlicensed care is a poor value proposition. “You don’t go to somebody who had cataract surgery to get your cataracts removed,” she said. “You go to a doctor.” She claimed to be receiving feedback that patients are being harmed in these settings due to a lack of clinical oversight.

Gretchen Hammer, executive director of the Colorado Department of Health Care Policy and Financing, echoed the concern about oversight. The department’s move to cut these positions is a direct response to the 286% jump in spending for this specific category. On paper, the service was designed to expand capacity in a behavioral health system plagued by months-long waitlists. In practice, it became a budgetary black hole.

The bottom line for locals is simple: the state is choosing to save money by removing the very people who are currently helping the most vulnerable among us stay sober and housed. If your neighbor is losing their recovery coach, it’s because the state decided that $293 million was too much to spend on keeping people out of jail and off the streets.