January is upon us, and with the start of the new year comes the beginning of a new legislative session. WellPower’s public policy and advocacy team is hard at work monitoring new legislation as it is introduced and watching for opportunities to support behavioral health bills that improve our communities. There’s no denying that this will be a difficult year for legislators and advocates alike, as the state is faced with a major budget shortfall.

So, what’s coming up this year in the state legislature? Here are a few areas we at WellPower are watching.

Medicaid Unwind & Budget Decisions

When the COVID-19 Public Health Emergency orders ended, states across the country began preparing for what is known as the Medicaid unwind – a process in which Medicaid recipients were disenrolled from coverage if no longer eligible or if they failed to reapply. In practice, this process has been fraught with technical issues and has resulted in millions of people nationwide losing Medicaid coverage that they are eligible to receive, with many people waiting months to be re-enrolled. Colorado has one of the highest rates of Medicaid disenrollment in the county and saw a 31% decrease in enrollment between March of 2023 and September of 2024, meaning about 530,000 people lost coverage. This is causing serious financial difficulties for providers across the state, and WellPower is no exception. Community mental health centers (CMHCs – aka the state’s mental health services safety net) are required to provide services, but when individuals do not have a source of coverage, providers are unable to receive reimbursement for services.

In the upcoming session, we anticipate legislative and budgetary attempts to support the Colorado safety net and mitigate the impacts of the Medicaid unwind, including attempts to support providers in reenrolling eligible individuals. We may also see legislation to address specific difficulties highlighted by the unwind, such as adjusting Medicaid recovery audit contracts and improving data collection on enrollment patterns.

Behavioral Health Funding

As you may have gathered, money (or the lack thereof) will be a major theme in the upcoming legislative session. The reality of the state government’s projected $750 million budget shortfall is that this will be the year of budget cuts – simply maintaining programs at their current level will not suffice to address the reduction in funds for the state, especially when accounting for medical inflation. We are already seeing difficult decisions being weighed by the Joint Budget Committee regarding continuation of funding for key programs due to the difficult budget year, which will compound funding issues related to the Medicaid unwind.

There is much anticipation that the Joint Budget Committee (JBC) will opt to reduce reimbursement rates for providers, and that any legislation with a fiscal note (i.e. it will require funding to implement) will end in committee, including behavioral health legislation.

We are also watching closely as the new Behavioral Health Administrative Service Organizations (BHASOs) are slated to come online this summer. The BHASO administrative costs are expected to add an additional 10% in administrative fees – an increase which the BHA did not request additional funding for, and which will instead come directly out of the BHA’s existing budget (which also needs to provide funding for services).

In better news, the state will begin preparing for the implementation of the Certified Community Behavioral Healthcare Clinic (CCBHC) demonstration grant, which was awarded to Colorado by the federal government this month and will come online in 2026. The CCBHC award will allow the state to apply for a four-year enhanced Medicaid match from the federal government, securing hundreds of millions in additional federal funds and improving the financial viability of Colorado’s safety net for years to come.

Protections for Children & Youth

Despite the looming influx of budget cuts currently being considered by the JBC, we are beginning to see a theme of protections for programs for children and youth. The first 10 bills introduced in the house and the senate in any given year are often indicative of issue areas that the legislature will be prioritizing in the upcoming legislative session. So far, we are seeing multiple pieces of legislation focused on childcare and children with complex needs in the first bills of the 2025 session. In the JBC, we have seen indications that members will prioritize maintaining services for children & youth when considering budget cuts, which may mean reduced services for other populations or programs.

Sneak peek: Behavioral Health Parity & Accountability

The second bill introduced in the house, HB25-1002, aims to create parity for behavioral health & substance use disorder services covered under any health benefit plan offered or sold in Colorado. Parity means that behavioral health services are covered by insurers at equivalent levels to physical health services, and has long been a priority for behavioral health policy. Due to the difficulties posed by the budget this year, it is strategic that legislators focus on private insurers to keep fiscal notes low. This bipartisan legislation will lower the cost of mental health care by prioritizing medical necessity over profit, and we are excited to keep an eye on this bill over the course of the session.

We will continue to work with our partners in the community, build relationships at the Capitol and beyond, and advocate for meaningful change in the upcoming session.

Want to learn more? Read about our legislative impact last year and our 2025 policy priorities.