DENVER — Colorado lawmakers from both parties agree that action is needed to prevent health insurance premiums from skyrocketing next year, but they remain deeply divided on how to address the crisis.
The state legislature is in a special session to manage the fallout from the Republican-backed federal tax and spending-cut package, signed into law by President Donald Trump on July 4. The measure did not renew key Affordable Care Act subsidies, setting up what experts warn could be a massive premium hike for Coloradans.
Rising Costs Could Hit Thousands of Coloradans
The Colorado Division of Insurance projects average premiums in the individual marketplace — Connect for Health Colorado — could jump 28% statewide in 2026 if subsidies expire. On the Western Slope, where healthcare costs are already high, premiums could spike 40% or more.
Officials estimate that 100,000 Coloradans — roughly one-third of those covered through the marketplace — could lose their insurance without intervention.
State vs. Federal Response
While Colorado lawmakers scramble to soften the blow, they’re also urging Congress to take action.
Rep. Rick Taggart (R-Grand Junction), a member of the Joint Budget Committee, said Congress understands the stakes:
“They all know this has a very detrimental impact,” Taggart said.
Taggart added that U.S. Rep. Jeff Hurd (R-Grand Junction) is working on legislation to extend subsidies temporarily while addressing long-term healthcare spending concerns.
Hurd confirmed he’s collaborating with House leadership and congressional committees to prevent an abrupt subsidy cutoff but acknowledged uncertainty over whether the Republican-controlled Congress will support the extension. The subsidies are set to expire at the end of 2025.
Democrats Push $100M Relief Plan
Democrats are advancing several bills aimed at preventing coverage losses. Their flagship proposal would inject $100 million into the Health Insurance Affordability Enterprise Fund by tapping into the state’s Unclaimed Property Trust Fund, which holds $1.2 billion in dormant assets.
House Speaker Julie McCluskie (D-Dillon) said the funding would act as an interest-free loan and could help 20,000 Coloradans keep their insurance next year:
“It is not enough,” McCluskie said. “The state is demanding that Congress step up and ensure these subsidies are extended.”
Republicans Oppose Democrats’ Approach
Republicans slammed the plan as financially irresponsible and introduced alternative bills to redirect funding within the health enterprise fund by ending coverage for undocumented immigrants.
At the center of the dispute is OmniSalud, a program launched in 2022 that offers insurance to low-income immigrants regardless of their legal status. Since its inception, about 33,000 enrollees have signed up.
Republicans proposed eliminating OmniSalud and diverting its projected $90 million in annual funding toward broader affordability programs, such as state reinsurance subsidies.
Democrats, however, killed these measures in committee, maintaining coverage for undocumented residents.
Medicaid Cuts Looming in 2027
While Medicaid changes won’t be addressed during this special session, the GOP-led federal tax bill is projected to slash Colorado’s federal Medicaid funding by billions starting in 2027. Lawmakers expect to revisit the issue during the regular session in January.
Key Takeaways
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Premiums could rise 28% statewide and 40% on the Western Slope without renewed subsidies.
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About 100,000 Coloradans risk losing coverage by 2026.
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Democrats propose a $100M emergency fund to temporarily stabilize insurance costs.
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Republicans want to eliminate OmniSalud and redirect its funds but face strong Democratic opposition.
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Congressional action is needed soon as ACA subsidies expire at the end of 2025.
Katie is a senior who has been on staff for three years. Her favorite type of stories to write is reviews and features. Katie’s favorite ice cream flavor is strawberry.
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