Colorado Division of Insurance Estimates Huge Losses in Health Coverage Due to Congress' Failure to Extend Tax Credits
Federal inaction threatens to destabilize the individual health insurance market, leading to substantial reduction of funding for Colorado's Reinsurance Program.
DENVER - Today, the Colorado Division of Insurance (DOI) informed health insurance companies that the agency was revising the expected impact of Colorado’s Reinsurance Program to reflect the impact of the Republican controlled Congress’ failure to-date to extend enhanced tax credits for the Affordable Care Act (ACA) market. This federal inaction combined with the impact of the Reconciliation bill is estimated to lead to as many as 110,000 Coloradans losing access to health insurance while driving rates up for everyone else. It will be devastating for those individuals losing health insurance, and will have a destabilizing impact on the Colorado individual health insurance market, putting enormous pressure on Colorado’s hospitals and health care providers to absorb a substantial amount of uncompensated care.
“People need to know their health care is at risk,” said Colorado Insurance Commissioner Michael Conway. “The federal government is chopping away the financial assistance that has helped hundreds of thousands of Coloradans afford quality coverage. And this will hit people in Colorado twice because it will also mean that the savings from our Reinsurance Program will be significantly reduced. On top of that, the federal government is proposing truly terrible changes in their reconciliation bill, which will tear down more than a decade of progress in keeping people healthy. All of it adds up to huge threats to the stability of our individual market. And if more than a hundred thousand people lose access to health care, we will all pay the price with even higher health care costs and insurance premiums for years to come.”
Colorado receives money from the federal government because of the State’s efforts to save federal money spent on health insurance. This is called “pass-through” money, as the federal government passes the savings back to the State to continue to spend on money-saving programs. But for plan year 2026, Colorado is estimated to lose approximately $100 million of this funding, putting key programs in danger.
Losing the federal funding will severely impact the Colorado Reinsurance Program’s purpose of reducing individual market health insurance premiums. So, despite the fact that the Reinsurance Program is receiving the maximum amount of State funding allowed by law - $90 million - the loss of federal funding means the program won’t be able to bring down premiums as effectively as the program has historically achieved.
While the full premium increases for 2026 will not be available until later this summer, the DOI estimates that the reduction of the Reinsurance Program’s impact alone will effectively increase premiums by 7% along the Front Range, and as much as 16% for rural Colorado. That’s nearly $1,500 annually in 2026 for a family of four along the Front Range, and over $4,300 for a family of four in rural Colorado. Those premium increases are only what is expected due from the impact on the Reinsurance Program. Should Congress fail to extend the tax credits altogether, net premiums could increase on average by 104% for Coloradans that receive them.
During the 2025 Colorado legislative session, the DOI offered a proposal that would have helped soften the blow from the reduction in pass-through funding - House Bill 25-1297 - to increase funding for the Reinsurance Program. That bill would not have fully solved the problem that Congress is creating, but it would have helped soften the blow by reducing the impact of lost tax credits. Unfortunately, that bill was unsuccessful. But the state looks forward to working with the Colorado Legislature to find ways to help fix the problems caused by the federal government.
But the solutions to problems caused by the federal government cannot and should not just be left to the state. Congress must continue the enhanced tax credits that have led to record numbers of people gaining access to health care through the ACA. Congress should also strip out the parts of the reconciliation bill that will lead to tens of thousands of Coloradans losing access to health care. A failure by Congress will mean that over a hundred thousand Coloradans will lose their health insurance coverage. All of those Coloradans who get priced out of coverage will continue to get sick, have accidents and need health care. And if they don’t have insurance, hospitals and doctors will simply pass the costs to everyone else. In the end, it will mean that all Coloradans will pay as family members and communities get sicker.
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About the Division of Insurance:
The Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA), regulates the insurance industry and assists consumers and other stakeholders with insurance issues. Visit doi.colorado.gov for more information or call 303-894-7499 / toll free 800-930-3745.
About DORA:
DORA is dedicated to preserving the integrity of the marketplace and is committed to promoting a fair and competitive business environment in Colorado. Consumer protection is our mission. Visit dora.colorado.gov for more information or call 303-894-7855 / toll free 800-886-7675.
