People who need peer services to battle addiction treatment in Colorado are worried over impending cuts. State Medicaid spending on peer services grew far faster than anyone expected and agencies have started canceling contracts with providers. Doing so places treatment and sober living beds at risk.
The crunch hits peer counselors, meaning people with lived experience in recovery, jail or homelessness who are trained to guide others to build networks. Coloradans who can’t afford private care rely on these Medicaid-funded services for treatment.
The Cuts
Colorado’s Medicaid program will overrun its budget by nearly $1 billion in 2027. Within that gap, one category stands out. “Peer and support services” cost $293 million last year in combined federal and state funds and covered services for about 35,000 people per month.
Spending in self-help and peer services grew 286% from 2022-2024. A single peer services billing code jumped from $8.4 million to $51.8 million over three years. Lawmakers now say they severely underestimated the demand.
“There may not be appropriate clinical oversight,” noted Gretchen Hammer. She leads the state’s Department of Health Care Policy and Financing. State officials confirmed they’re discussing a moratorium on peer services contracts with the regional agencies that manage them.
A Northern Colorado Nonprofit on the Brink
Brian Bauer found out what the moratorium talk means in practice. His organization, Abundance Foundation, received a 90-day notice that its funding agency ended their contract. The nonprofit provides addiction counseling and sober living to people leaving prison and homeless shelters. The notice put 230 people receiving support from 11 recovery coaches at risk of losing services.
Bauer said his three sober living houses could close. That’s unfortunate, he adds, noting that lawmakers misunderstand what peer counseling does. His coaches help clients figure out how to stay sober, battle stigmas and find work as they build their daily routines.
“The argument that they need a medical professional is invalid. The idea is that when somebody gets out of jail or prison, the main person they trust to do the next right thing has been in jail or prison.”
Lawmakers Question the Model
The high price tag frustrated members of the Commission on Medicaid. This body is made up of 10 lawmakers charged with stabilizing the Medicaid budget.
Sen. Judy Amabile is a Boulder Democrat and commission chair. She notes, “I am getting a lot of feedback from people that they are not actually getting excellent care.”
Sen. Barbara Kirkmeyer is a Brighton Republican and proposed ending the program outright. Amabile pushed back on that instinct because the state spent years building behavioral health capacity and that abrupt elimination carries its own risks.
The Ripple Effects
The cuts will certainly prolong the already daunting waiting lists. SummitStone Health Partners, the largest nonprofit mental health center with its HQ in Fort Collins, often has a wait for services. In August, Jefferson Center Mental Health in Lakewood closed its adult residential recovery program because of a lack of Medicaid reimbursement rates, and about 50 employees lost their jobs.
Bauer agrees that fraud exists among peer services. But he contends that eliminating what works is the wrong fix.
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