State and Federal Policy Shifts Could Leave Thousands Without Coverage

Colorado’s health insurance landscape is on the brink of dramatic change. A combination of state budget constraints and sweeping federal policy reforms could result in higher premiums, reduced coverage, and increased barriers to care for hundreds of thousands of residents.

Lawmakers in Denver are scrambling to respond to a projected 28% increase in individual market premiums for 2026, with some rural areas facing hikes as high as 40%. The crisis stems from the expiration of enhanced federal subsidies under the Affordable Care Act (ACA), compounded by a $783 million state budget shortfall.

State-Level Action

In an emergency legislative session this week, Colorado lawmakers introduced a bill to allocate $100 million from the Unclaimed Property Trust Fund to the Health Insurance Affordability Enterprise. The goal is to stabilize premiums and prevent mass coverage loss through Connect for Health Colorado, the state’s ACA marketplace.

Other proposals include expanding the state’s reinsurance program and redirecting funds from non-essential programs, such as wildlife restoration, to health insurance subsidies.

However, partisan tensions are rising. A Republican-backed bill seeks to eliminate the OmniSalud program, which currently provides subsidized coverage to undocumented immigrants. Advocates warn that such a move could leave thousands without access to basic care.

Federal Policy Overhaul

At the national level, the recently passed One Big Beautiful Bill Act is reshaping Medicaid and ACA subsidies. Key provisions include:

• Work requirements for Medicaid recipients, mandating 80 hours of employment or approved activity per month.
• Twice-yearly eligibility checks, increasing the risk of administrative disenrollment.
• Immigration-related restrictions, excluding many lawfully present immigrants from federal health programs.

The expiration of enhanced ACA tax credits means that many low- and middle-income families could see their premiums double or even triple. Analysts estimate that Colorado could lose between $180 million and $525 million in federal matching funds, affecting hospitals, clinics, and community health programs statewide.

Who’s Most at Risk?

The impact will be felt across demographics, but certain groups face disproportionate challenges:

• Marketplace enrollees may see annual premium increases of $2,700 to $5,100.
• Rural residents face limited provider networks and fewer subsidy options.
• Undocumented immigrants risk losing all subsidized coverage.
• Medicaid recipients could be dropped due to new paperwork and work requirements.
• Small businesses may struggle to afford employee coverage, especially in high-cost regions.

What Comes Next?

Colorado’s legislature is expected to vote on the emergency funding bill by the end of the week. Meanwhile, advocacy groups are urging Congress to renew ACA subsidies before they expire on December 31, 2025.

Legal challenges to the federal law are already underway, with a recent injunction temporarily blocking premium increases in several states. Colorado officials are also exploring local solutions, including expanding SafeFit and other community-based health initiatives.

Final Word

As Colorado navigates this complex policy terrain, the stakes couldn’t be higher. Without swift and coordinated action, health insurance may become unaffordable for tens of thousands of residents—especially those in rural and marginalized communities.

©️ The Rocky Mountain Dispatch LLC. 2025