Colorado's Joint Budget Committee voted Tuesday to finalize two Medicaid cuts that take effect together: a 2% across-the-board reduction to Medicaid provider reimbursement rates (saving $95 million) and a 56-hour-per-week cap on hours paid family caregivers can be reimbursed for caring for a family member with IDD. The legislature sent the $46.8 billion budget to Governor Jared Polis on April 28, 2026. Both cuts are now locked in.

For families who are paid as Medicaid caregivers, the compounding effect is severe. One family estimates losing two-thirds of their income when both cuts are applied by July 2027.

What the JBC Voted and When It Takes Effect

On March 12, 2026, the JBC voted 4-2 to approve the 56-hour caregiver cap. The cap affects Personal Care, Homemaker, Health Maintenance Activities, Long-Term Home Health Aide services, and LTHH Nursing Services per member. The reduction phases in over one year: 84 hours per week on July 1, 2026, 70 hours on January 1, 2027, and 56 hours on July 1, 2027.

The 2% provider rate cut applies to all LTSS, HCBS, and case management services starting July 1, 2026. This cut affects what caregivers are paid per hour, not just what providers receive.

Both changes are part of Colorado's response to a $1.5 billion budget shortfall. Medicaid absorbs the largest share of the cuts.

How the 2% Rate Cut Affects Provider Access and Family Caregiver Pay

The 2% cut reduces what Medicaid reimburses providers and caregivers per hour of service. If you're currently paid $15.50 per hour as a family caregiver through Medicaid, the rate drops to $15.19 starting July 1, 2026. That's $31 less per week at 100 hours, $465 less over 15 weeks.

For LTSS providers serving IDD families, the rate cut makes Medicaid reimbursement less viable. Providers who already operate on thin margins may reduce hours, leave the Medicaid network, or close. Families dependent on specific providers face disruption even if their own service hours aren't capped.

How the 56-Hour Cap Works and Who Is Affected

The cap limits the number of hours per week a single caregiver can be reimbursed for caring for one member. If you're caring for your adult child with IDD and currently bill 100 hours per week through Medicaid, your reimbursed hours drop to 84 in July 2026, 70 in January 2027, and 56 by July 2027.

The cap doesn't prevent you from providing more than 56 hours of care. It limits what Medicaid will pay for. The difference is unpaid.

Exceptions exist for specific criteria, but the state hasn't published the full exemption process yet. Families who believe they qualify for an exception should document their case now.

How the Two Cuts Compound for Paid Caregiver Families

A family caregiver billing 100 hours per week at $15.50 per hour earns $1,550 per week before the cuts. Here's the progression:

• Before cuts: $1,550/week at 100 hours, $15.50/hour
• July 1, 2026: $1,276/week at 84 hours, $15.19/hour (2% rate cut + hour cap to 84)
• January 1, 2027: $1,063/week at 70 hours, $15.19/hour (hour cap to 70)
• July 1, 2027: $851/week at 56 hours, $15.19/hour (hour cap to 56)

That's a $699 per week drop, a 45% income reduction. One caregiver quoted by advocacy groups estimated losing two-thirds of household income when factoring in related benefit changes triggered by reduced earnings.

The cuts hit families who transitioned to paid caregiver roles because institutional or agency-based care options were unavailable, too expensive, or unsuitable for their family member's needs.

What Families Can Do Right Now

Document Current Service Levels

Write down every service your family member receives: who provides it, how many hours per week, what it costs, and whether it's billed to Medicaid. Include agency providers, family caregivers, and case management. Keep a dated log of care hours for the next 90 days. If services are reduced or providers drop out, you'll have baseline documentation for appeals.

Understand the Appeal Process

Colorado Medicaid members can request a State Fair Hearing when services are reduced or denied. The request must be filed within 90 days of the notice. If you file within 10 days, your current services continue during the hearing process (called "aid pending").

To file, call the Colorado Department of Health Care Policy & Financing (HCPF) at 1-800-221-3943 or submit a written request to:

State Fair Hearings Unit
Colorado Department of Health Care Policy & Financing
1570 Grant Street
Denver, CO 80203

You don't need a lawyer to file, but legal assistance is available through Colorado Center on Law and Policy (CCLP), Disability Law Colorado, and Legal Aid.

Contact the New Legislative Medicaid Commission Before It Begins Meeting

The legislature created a Medicaid Sustainability Commission to evaluate long-term LTSS funding. The commission's first meeting is May 23, 2026. The commission has subpoena power, budget analysis authority, and a mandate to report findings by February 2027.

Families affected by the cuts can submit written testimony before the May 23 meeting. Email testimony to medicaid.commission@coleg.gov with the subject line "LTSS Cuts Impact: Family Testimony" and include your county, the number of hours you currently receive or provide, and the specific impact the cuts will have on your family. Keep it under 500 words.

The commission's scope includes reviewing ABLE account integration with Medicaid planning, gap analysis for caregiver wages vs. cost of institutional care, and waitlist projections. Written testimony goes into the public record and can influence commission recommendations.

Explore Supplemental Funding Sources

ABLE accounts let individuals with disabilities save up to $18,000 per year (2026 limit) without affecting Medicaid or SSI eligibility. If your family member qualifies, you can use ABLE funds to cover out-of-pocket care costs when Medicaid-reimbursed hours are capped. Contributions are after-tax, but withdrawals for qualified disability expenses are tax-free.

The eligibility window expanded in 2026. If your family member's disability onset occurred before age 46 (up from age 26), they may now qualify. Check state-specific ABLE programs for Colorado residents at savewithenablenow.com.

Other supplemental sources: respite care grants through local Area Agencies on Aging, county-level emergency assistance programs, and family caregiver stipends through the National Family Caregiver Support Program (administered by Colorado counties). Availability varies by county.

Contact Your State Legislators

The budget is finalized, but legislators need to hear how these cuts affect constituents. Email your state representative and senator with specific numbers: how many hours you'll lose, how much income that represents, and what your family will have to stop doing when the cuts take effect.

Find your legislators at leg.colorado.gov/find-my-legislator. Keep the email under 200 words, include your address to confirm you're a constituent, and send it before June 1, 2026.

What the Timeline Looks Like

• May 23, 2026: Medicaid Sustainability Commission first meeting
• July 1, 2026: 2% rate cut takes effect, hour cap drops to 84/week
• January 1, 2027: Hour cap drops to 70/week
• July 1, 2027: Hour cap drops to 56/week
• February 2027: Commission report due to legislature

The February 2027 report may recommend reversing or modifying the cuts, but there's no guarantee the legislature will act on it. Families should plan for the cuts to remain in place through at least fiscal year 2027-2028.

What Happens If You Don't Act

If you don't document current services and file appeals when reductions happen, you lose the administrative record needed to challenge the cuts. If you don't contact the commission or your legislators, the only data they'll have comes from state budget analysts and agency testimony.

The cuts are locked in, but the implementation details (exemption criteria, appeal timelines, transition support) are still being written. Families who engage now shape how those details land.