Colorado is facing a major blow to its health services, with the US Department of Health and Human Services and the Centers for Disease Control and Prevention (CDC) terminating $250 million in federal funding for public and behavioral healthcare in the state. This funding, originally allocated through the American Rescue Plan Act during the pandemic, was intended to support programs addressing the effects of COVID-19.
Termination of Funding
The Substance Abuse and Mental Health Services Administration (SAMHSA) notified the state on March 24, 2025, that it would terminate ongoing and planned funding due to the end of the pandemic. The notification cited the “Department of Government Efficiency” Cost Efficiency Initiative and explained that since the COVID crisis was officially over, funding related to it would no longer be needed. The American Rescue Plan Act had initially set a spending deadline of September 20, 2025, but the federal government decided to end the grants earlier than anticipated.
“These grants were issued for a limited purpose: To ameliorate the effects of the pandemic. The end of the pandemic provides cause to terminate COVID-related grants,” states the SAMHSA notice.
Impact on Health Services
The funding termination has left state officials concerned, as the grants supported 60 programs across Colorado, including critical services for individuals with mental health and substance use issues. Allie Eliot, a spokeswoman for the Behavioral Health Administration (BHA), expressed worry about the impact, stating:
“In so many cases, these are life-saving programs and services, and we worry for the wellbeing of those who have come to count on this support.”
These programs included:
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Crisis resolution teams
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Services for adults with serious mental illness
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Peer services for individuals recovering from substance use disorder
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Support for young adults with psychotic spectrum illnesses
Challenges in Assessing the Impact
The Colorado Department of Public Health and Environment (CDPHE) is still working to fully assess the impact of the funding cuts. Over $200 million of the funds were intended to support local public health agencies and Tribal Nations. This funding was earmarked for:
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Addressing COVID-19 health disparities
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Vaccinations for children
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Lab capacity for emerging infectious diseases
Kristina Lodice, a CDPHE spokeswoman, noted the significant consequences of these cuts:
“We are concerned that this sudden loss of federal funding threatens Colorado’s ability to track COVID-19 trends and other emerging diseases, modernize disease data systems, respond to outbreaks, and provide critical immunization access, outreach, and education—leaving communities more vulnerable to future public health crises.”
Budget Strain on Colorado
The state is already grappling with a $1.2 billion shortfall in its budget, which is in the process of being finalized. Lawmakers are uncertain how the $250 million funding cut will further affect Colorado’s overall financial situation. Rep. Emily Sirota, a budget committee member, fears that this funding loss is just the beginning:
“These are millions of dollars of planned expenditures. They were planned for, contracted for, and are now being pulled back within the public health space, especially around immunization and disease detection work. Colorado doesn’t have the money to backfill the lost funding.”
She also highlighted the real-world consequences for Coloradans, particularly those who rely on these vital health services.
Concerns for Vulnerable Populations
Other committee members also expressed concern about the long-term effects of these cuts. Sen. Judy Amabile emphasized the harm to Coloradans who rely on the services:
“People who are in desperate need of the services that they provide won’t be able to get them and that will hurt them.”
Rep. Shannon Bird, vice-chair of the budget committee, reiterated that without federal partnership, the state cannot adequately fund these services.
“What people need to know is that this is Coloradan’s money coming back to us to invest in critical behavioral healthcare needs. Critical public health needs.”
Next Steps
As the state grapples with the implications of these funding cuts, state leaders are working together to explore alternative solutions and mitigate the loss of federal support. The Governor’s office, Colorado Attorney General’s Office, and other stakeholders are engaged in efforts to secure the necessary resources to continue providing essential services to Coloradans. However, with a tight budget and no immediate replacement for the lost federal funds, the road ahead remains uncertain for many of the state’s most vulnerable residents.
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