Colorado’s 2012 legislative session kicks off Wednesday, and it’s clear that the cost of Medicaid will be a very contentious issue. 

More Coloradans than ever are enrolled in the safety net health program for the poor now: 614,000.

Statehouse Democrats say Colorado is getting a lot of help paying for all those new people, but Republicans want fewer on the state’s medicaid rolls.  

CPR Health Reporter Eric Whitney explains.

CPR Health Reporter Eric Whitney: Imagine losing your job, and at the same time getting stuck with a bunch of big medical bills.

That’s kind of what’s happening to Colorado government right now. The recession means less income from taxes. It also means higher state Medicaid bills. 200,000 more Coloradans are now poor enough to qualify for Medicaid, compared to before the recession. The state’s Medicaid agency says it needs $185-million more from the state budget next year to meet the demand. 

Sue Birch, Executive Director, Colorado Department of Health Care Policy and Financing: We have had a mushrooming of clients.

Reporter: That’s Sue Birch, who runs Colorado’s Medicaid agency, last week explaining the higher costs to the state legislature’s Joint Budget Committee.

Birch: We’ve seen an enormously alarming increase in poverty, especially around children in Colorado, and our high unemployment has been significantly problematic.

Reporter: But Statehouse Republicans say it’s not just the recession that’s dumping more poor people on Colorado’s Medicaid rolls. They point out that in the last few years the state has made it easier for people to get on Medicaid. They can now earn more money and still get the benefits. 

State Rep. Cheri Gerou:  We’re one of the states that has increased the amount of enrollment at a much higher rate than most any other state in the country.

Reporter: That’s Republican Representative Cheri Gerou from Douglas County, and she’s right.  Colorado chose to expand Medicaid eligibility at a time when many states are trying to drop people off the program. It’s a deliberate strategy that then-Governor Bill Ritter set in motion, about a year after the economic downturn hit.

Then-Governor Bill Ritter: This is the most significant health care legislation to be passed in decades. 

Reporter: In 2009 Ritter signed a Medicaid expansion bill that he said would add a hundred thousand people to the state’s rolls.

Ritter: And this is really important, we’re doing all of this without burdening taxpayers or the state’s general fund.

Reporter:  That’s because Colorado hospitals offered to give the state around $600 million a year to put more people on Medicaid. That money is matched by federal funds. 

The hospitals figured it would save them money in the long run because more people on Medicaid would mean fewer uninsured people racking up unpaid bills that the hospitals get stuck with. 

But their money didn’t go far enough. As the recession forced more people into poverty and onto Medicaid - 200-thousand more. 

The bottom line for the state budget is that it’s going to have to come up with $185 million more for Medicaid next year than it did this year. 

Cheri Gerou, Republican chair of the Joint Budget Committee told the state’s Medicaid chief,  that allowing more people on Medicaid is taking money away from K through 12 education.

Gerou:  At the rate that you all are growing, you are growing at a much faster rate than our funding for K-12.

Reporter: So Gerou and other statehouse Republicans want Gov. John Hickenlooper and the Democrats to work with them to find ways to reduce Medicaid spending. They say Colorado should ask for some kind of federal waiver that gives it latitude spend less money.

But Democrats say they’ve looked for savings they could get through a Medicaidwaiver, and can’t come up with anything the White House is likely to approve. Gerou says she’ll keep pushing. 

Gerou: I feel like I owe it to the children in Colorado for their public school funding that if there’s any avenue that I can go forward with that would help move a solution forward, for Medicaid waivers, if it would give some relief to K through 12 funding, I feel obligated to ask that question.

Reporter: Gerou and statehouse Republicans can keep asking for Colorado to pursue a Medicaid waiver, but Governor Hickenlooper has made it clear that he doesn’t think it will result in any budget relief for the state. And given that Republicans only have a narrow majority in one Colorado House, it’s unlikely their calls for a waiver this legislative session will be anything more than symbolic.