As many as 67,500 Coloradans will soon be eligible for health coverage due to a measure that uses a tax on hospitals to pull down additional federal funds. 

The program will result in an additional $1.2 billion annually that will be used to increase the number of state residents covered under Medicaid or CHIP.

In addition to the expansion in health care coverage, the state will use the funds to increase reimbursement to hospitals treating indigent patients, as well as increasing Medicaid reimbursement for certain inpatient services. 

Payments to hospitals are determined by a formula that recognizes a hospital’s treatment of Medicaid and indigent patients. A hospital’s size, location and whether it is a teaching hospital also influence reimbursement payments.

Hospitals in urban and rural areas will generally receive payments in excess of their fees, while suburban hospitals will see a net loss under the program due to their treating proportionally fewer Medicaid and indigent patients.

Colorado will use the extra funds to expand eligibility in its Child Health Plan Plus from the current 205% of federal poverty level (FPL) to 250%. Parents with a child covered by Medicaid will also be eligible for Medicaid if their family income is 100% or below FPL.