Denver committee advances Denver Health tax agreement as Medicaid losses loom

Denver’s Health and Safety Committee voted 7-0 Wednesday to advance a replacement funding agreement with Denver Health, continuing monthly distributions from the voter-approved tax through Dec. 31, 2029. The committee meeting record shows the panel approved Council Bill 26-1186 for filing. As of Aug. 20, the full City Council had not taken final action.

Denver Health officials told the committee that about 20,000 Denver patients currently covered by Medicaid could become fully uninsured over the next four to five years as federal and state coverage changes take effect. That is a hospital projection, not an independently validated count. Officials said coverage losses could increase uncompensated care and emergency-room reliance.

The 0.34% sales and use tax, approved by Denver voters in 2024, supports emergency and trauma care, primary care, mental health, drug and alcohol recovery, and pediatric services. Distributions have no fixed maximum because they depend on annual tax collections. Denver Health reported about $140 million in annual uncompensated care overall, including roughly $100 million tied to Denver residents.

The hospital’s 2026 spending plan allocates about $67.7 million in tax revenue: $34.8 million for emergency medicine, $15.5 million for primary care, $13.4 million for mental health, $2.1 million for pediatrics and $1.9 million for alcohol and substance-use services, according to the hospital’s spending-plan review. The plan budgets 119,857 emergency visits for the year and recorded 62,411 from January through June. Denver Health said it could shift allocations if uncompensated-care needs change.

The proposed amendatory agreement would require annual spending plans that identify expenditures by care category, administrative costs and carry-forward amounts. Beginning in 2026, the plans would be due March 31 and include two to four performance, effectiveness or quality metrics for each service area, along with baseline or prior-year data when applicable.

By May 1, Denver Health would provide City Council, the mayor and the city auditor with a public report on the prior year’s tax-funded spending. The report would include service-line spending, direct patient-care and administrative costs, prior-year metrics and audited financial statements. Denver Health also would be required to appear before the Denver Department of Public Health and Environment and City Council at least twice a year to discuss spending, variances and performance.

The agreement would cap city administrative expenses at 1% of annual tax revenue and require unused amounts within the cap to return to the tax fund. The city auditor and other authorized city agents would have access to relevant records, subject to state and federal privacy laws. Payments would remain tied to money appropriated, collected, deposited in the city treasury and encumbered; the city would not be required to distribute more than it collected. The parties would reconcile payments with actual collections annually.

The city’s presentation listed tax revenue of $65.7 million in 2025, a projected $68.5 million in 2026 and a projected $72 million in 2027. It attributed the 2027 increase broadly to the fund’s continued ramp-up and “new audit revenue,” without providing the amount, calculation or detailed tax-base assumptions. Council members sought more explanation, and officials said the figure was an unofficial projection requiring confirmation.

The Legistar matter record listed Bill 26-1186 as a “Committee Action Item,” with no final-action entry or history records as of Aug. 20. The available record does not establish a full City Council vote, enactment date, mayoral approval or compliance with any of the agreement’s proposed reporting requirements.