Colorado: State legislature extends supplemental state ACA subsides thru 2027

Last September, just ahead of the 2026 ACA Open Enrollment Period, the Colorado legislature passed emergency legislation to generate funding to backfill around 40% of the premium subsidies which were lost when Congressional Republicans refused to extend the enhanced federal tax credits:

DENVER - Colorado Insurance Commissioner Michael Conway released the following statement on Governor Polis signing HB 25B-1006 into law, legislation that provides funding to the individual healthcare market to reduce catastrophic premium increases:

“I’m grateful Colorado lawmakers heeded our call about catastrophic price increases for the individual healthcare market and passed a temporary fix this special session. This stopgap measure will provide crucial funding to reduce the rise in premium costs for working families. But without Congress stepping up to extend enhanced premium tax credits, tens of thousands of hardworking Coloradans will lose their healthcare, and those who remain enrolled can expect to see average net rate increases of more than 100%, and for many, almost 200%.”

More specifically, for 2026 only, the state subsidies provide $80/enrollee per month for the first member of the households and an additional $29/enrollee per month for each additional member of the household, for up to 5 household members total.

As far as I can estimate, this is saving around ~270,000 Colorado ACA enrollees roughly $450 apiece on average this year, although they're still paying an average of $900 more apiece in premiums, mostly as a result of the enhanced federal subsidies expiring.

Since this was emergency legislation, however, it was only put into place for the 2026.

Fortunately, however...via Connect for Health Colorado:

Denver, Colo.– Connect for Health Colorado is celebrating Senate Bill 26-178 becoming law. The new law directly increases affordability for customers served by the state’s official health insurance marketplace. It protects programs funded through the Health Insurance Affordability Enterprise—including Colorado Premium Assistance and OmniSalud—at the same levels for another year. 

In particular, the new law would enable the Colorado Premium Assistance program to continue to meaningfully reduce monthly health insurance premiums for Coloradans. 

Kevin Patterson, chief executive officer of Connect for Health Colorado, released the following statement about Senate Bill 26-178.

“Connect for Health Colorado is grateful to the General Assembly, state Division of Insurance, and the Governor’s office for their support of Senate Bill 26-178, which will extend the state’s Colorado Premium Assistance program at its current levels through plan year 2027. 

In plan year 2026, Colorado Premium Assistance has provided tremendous support for our customers. Despite significant changes to federal financial help, the program has stabilized costs and helped Coloradans get and stay covered. 

This year, the program helped reduce premium costs for more than 176,000 people. For households that receive financial help, it is providing meaningful savings and keeping coverage costs about the same as they were in 2025. Colorado Premium Assistance has also helped prevent a steep drop in enrollment, especially among customers ages 26 to 34. 

Colorado and other states with premium assistance programs saw smaller enrollment decreases this year than states without similar programs. Customers who received Colorado Premium Assistance also reported higher satisfaction with their health insurance choices and fewer concerns about costs. 

As part of the funding mechanism for the new law, Connect for Health Colorado offered to redirect up to $9 million from its annual operating budget to help pay for innovative state affordability initiatives like Colorado Premium Assistance, reinsurance and OmniSalud. We offered this funding because we believe deeply in these programs and the support they provide for our customers. 

The reduction in funding for our operating budget will have no effect on our ability to serve our customers. In fact, it returns money to taxpayers and our customers, and it aligns with our mission to expand access, affordability and choice for Coloradans who purchase health insurance through the individual market.

By continuing this essential financial help through plan year 2027, Senate Bill 26-178 will help preserve access to affordable health insurance and choice for tens of thousands of Coloradans. Through innovative programs like Colorado Premium Assistance, reinsurance, and OmniSalud, Colorado is leading the way in keeping health coverage within reach.” 

More specifically, SB 26-178...

• Authorizes the health insurance affordability enterprise (enterprise), on or after January 1, 2027, to issue revenue bonds of up to $100 million to fund enterprise programs, secured by the enterprise's revenues, and require the enterprise to pay bond obligations before allocating revenues for enterprise programs;

• Allows the enterprise to invest specified money in the health insurance affordability cash fund (cash fund) without regard to otherwise applicable requirements for such investments and to contract with private professional fund managers to advise on investment strategies;

• Modifies the allocation of enterprise revenue among authorized purposes and allows the enterprise to reallocate unexpended amounts for specified purposes;

• Directs the enterprise to require qualified individuals who are enrolled in state-subsidized individual health coverage plans eligible for subsidies from the enterprise to pay premiums established in rules adopted by the commissioner, in consultation with the health insurance affordability board (board);

• Requires the enterprise to adjust the statewide average premium reduction under the reinsurance program to 18% and to reduce the amount of bonds issued to account for the reduced costs for the reinsurance program;

• Directs the board, in recommending parameters for implementing subsidies for state-subsidized individual health coverage plans, to recommend coverage that prioritizes enrollment stability and customer predictability; when seeking input on its recommendations regarding plans, coverage, and the number of eligible slots, to enable feedback in at least English and Spanish and in other languages upon request; and to indicate how it incorporated such feedback into its final recommendations;

• Directs the enterprise to conduct or contract a third party to conduct a study to evaluate the feasibility of restructuring the enterprise programs to increase health insurance affordability and maximize enrollment in health insurance plans;

• Requires the enterprise to submit 3 written reports and make one in-person presentation to the joint budget committee each year regarding the status of the cash fund and, as part of its in-person presentation in January 2027, to provide an analysis of the effects of changing the statewide average premium reduction under the reinsurance program to 15% and of creating a tiered, income-based, structure for premium assistance for individuals who purchase insurance on the Colorado health benefit exchange (exchange);

• Repeals the tax credit for contributions to the exchange and replaces it with a tax credit for contributions to the enterprise; and

• Directs the state treasurer to transfer $40 million from the marijuana tax cash fund to the cash fund by June 30, 2026, reduces to $60 million the designation of money in the marijuana tax cash fund as the state emergency reserve for the 2025-26 and 2026-27 state fiscal years, and increases by $40 million the value of the capitol annex building for purposes of the state emergency reserve for the 2025-26 and 2026-27 state fiscal years.