Colorado: Legislature passes, Gov signs bill to backfill 40% of lost federal subsidies...for now (updated)

As I noted last month, Colorado's ~321,000 individual health insurance market enrollees are currently staring down the barrel of massive premium hikes less than four months from today:

• Perhaps 96,000 unsubsidized Coloradans are looking at average rate hikes of over 28%.

• Another ~225,000 or so enrollees who are currently receiving federal subsidies will be hit with net increases of as much as 200%, 300% or even more.

Every state government is handling this situation differently. In Arkansas and New Hampshire, the strategy seems to be to either shout at or beg carriers to re-file with lower gross premium increases for 2026. New Mexico, California and New Jersey, in contrast, are all retooling their existing state-based supplemental subsidy programs to help cushion at least some of the impact.

Colorado, meanwhile, is doing this as well, but they also just passed a brand new law to beef up their state assistance program. Via Colorado NewsLine:

Two tax credit bills from the special legislative session are headed to Gov. Jared Polis’ desk after gaining approval from Colorado lawmakers on Tuesday. The bills would both allow the state’s treasury department to sell state tax credits in order to raise revenue for the current fiscal year, with one sending money to the general fund and the other funding programs to lower health insurance premiums.

Large taxpayers would be able to buy credits for future tax liability at a lower rate, so the state would get that money now and the payer would benefit from the discount.

...The Senate then approved House Bill 25B-1006, which would sell tax credits to bring in money for the Health Insurance Affordability Enterprise fund. That pays for programs to reduce individual insurance market premiums.

The bill aims to raise $100 million for that enterprise to soften the impact of the expiration of federal enhanced premium tax credits. Health insurance premiums for people who buy insurance on the individual market are expected to face an average of a 28% increase next year, with higher increases along the Western Slope.

HIAE funds the state’s reinsurance for claims from high-cost individuals, subsidies for carriers on the state’s health insurance exchange and the state’s OmniSalud program for people without permanent legal status.

It is possible Congress will extend or partially restore the federal enhanced premium tax credit in question, in which case the sale of tax credits proposed in the bill would not occur.

The wording of the article makes it sound like the $100M they hope to raise would go entirely towards premium tax credits specifically as opposed to some of it going towards the reinsurance and/or OmniSalud program, but I could be wrong.

Gov. Polis signed the bill into law last week and issued the following statement:

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%.”

However, this statement from the head of Connect for Health Colorado seems to indicate otherwise:

Gov. Jared Polis signed House Bill 25B-1006 into law last week.

This new law is important and necessary, particularly as we head toward open enrollment for plan year 2026.

For the upcoming plan year, the stopgap bill will lower the total cost of health insurance premiums and invest in OmniSalud.

...Without Enhanced Premium Tax Credits, we estimate average increases of 100% to over 300% in monthly premiums for people receiving financial assistance; and we estimate tens of thousands of Coloradans will be at risk of losing coverage, with rural residents, older adults, and those with fluctuating incomes among the most impacted.

...House Bill 25B-1006 will mitigate some of this impact. But make no mistake: failure to extend Enhanced Premium Tax Credits will significantly impede access to affordable health insurance.

Unlike similar press releases out of NM, CA & NJ which give a fairly good idea of how much of the lost federal subsidies will be backfilled by the state (100%, 9% and 40% respectively), neither the article above nor either of the statements indicate how much of a dent this bill will make. The best I can come up with is this:

According to CMS's 2025 OEP Public Use File, 225,484 Colorado exchange enrollees are averaging around $457/month in APTC assistance, or $5,484 this year. That's a total of around $1.24 billion in 2025.

However, not all of that is via the enhanced subsidies; most is actually thanks to the original ACA subsidy formula, so the portion due to the expiring subsidies is likely less than $500 million.

If so, that means HB 25B-1006, if successful at generating $100 million (which isn't guaranteed) would manage to cancel out perhaps 20% of the lost federal subsidies...although likely less than that since this is based on 2025 premiums, not the 2026 rates which are expected to be 28% higher. So overall my guess would be it'll mitigate perhaps 10-15% of the lost help. Not fantastic, of course, but a hell of a lot better than nothing.

UPDATE: OK, never mind; my colleague Louise Norris pointed me towards this...apparently the actual amount of federal funding being lost is more like $230 million, which means this bill should be able to replace around 43% of it, which is much better (still not fantastic but better).

Meanwhile, this is also happening:

Rocky Mountain HMO and Anthem File to Discontinue Multiple Plans in the Individual Health Insurance Market Across Colorado

The discontinuance filings from the two insurers are projected to affect 96,000 Coloradans

DENVER - The Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA), today announced that Rocky Mountain HMO and Anthem’s HMO Colorado have filed plans to end coverage for multiple health insurance plans in the individual market. It is projected that 96,000 Coloradans will be affected by the discontinued plans and will need to shop for new coverage during the upcoming Open Enrollment, which begins November 1. Despite the discontinuance notices, all counties in Colorado will still have plans available in the individual market.

“I don’t know how we can ring alarm bells any louder. Coloradans need support,” said Colorado Insurance Commissioner Michael Conway. “We need our elected leaders at the General Assembly and federal level to help. We will do everything possible to stabilize the market, but without that assistance, hardworking people are going to receive devastatingly high rate increases and more than a hundred thousand people will lose coverage as a result.”

A discontinuance can include removing a plan altogether or changing the locations in which a plan is offered. By law, insurance carriers must provide 135 days’ notice to DOI before discontinuing plans. The deadline for plans effective January 1, 2026 was yesterday, August 19. Consumers who have an impacted plan will receive a notice at least 90 days in advance of the discontinuance.

Federal uncertainty has resulted in significant negative impacts to the individual market. Approximately 300,000 Coloradans are enrolled in individual market plans. Due to the U.S. Congress’s decision not to extend enhanced premium tax credits for the individual market, which help keep costs affordable for families, it is projected that 100,000 people in Colorado’s individual market will lose coverage. For Coloradans who remain enrolled, the average net rate increase for the majority of consumers will be more than 100%, and for many, will approach 200%.

There is still an opportunity for Congress to act and extend the enhanced premium tax credits. There is also an opportunity for the Colorado General Assembly to pass legislation in the special session starting tomorrow to provide funding to the Health Insurance Affordability Enterprise, which helps keep costs down for individual market plans.

Note: This press release was posted on August 20th, so it sounds like the CO legislature heard the alarm bells loud & clear; good for them!

Rocky Mountain HMO filed to withdraw plans from certain counties. It will still provide plans in the individual market, but it will no longer offer 20 plans across 7 counties. All plans being removed are in rating area 3, which is the Denver Metro area. The discontinuances will affect 26,000 Coloradans.

HMO Colorado filed to both discontinue plans and withdraw plans from certain counties. Their discontinuance filing announced plans to remove 21 plans impacting 11 counties and 32,000 members. In addition, it plans to no longer offer 41 plans in certain counties, impacting 37,000 members. These changes will result in ending coverage for almost 70,000 members (which is two thirds of its current enrollment).

Impacted Counties

Rocky Mountain HMO:

• Adams
• Arapahoe
• Broomfield
• Denver
• Douglas
• Elbert
• Jefferson

Anthem/HMO Colorado:

• Adams
• Arapahoe
• Boulder
• Broomfield
• Clear Creek
• Denver
• Douglas
• Elbert
• El Paso
• Gilpin
• Jefferson
• Park
• Larimer
• Mesa
• Teller
• Weld

On a related note, there's also this press release from Anthem (h/t Louise Norris for the find):

Anthem Wants to Continue to Offer an Individual Health Plan in Every County in Colorado

Recently, incorrect information about the future of Anthem’s individual health plans offered in Colorado has caused some confusion. We hope the information provided here will clarify what’s happening.

Note: This only applies to individual health plans purchased on or off the state exchange, Connect for Health Colorado. This does not apply to Coloradans who receive Anthem health insurance through an employer.

Here’s what’s happening.

Every summer, health insurers file their proposed rates for individual health benefit plans with the Colorado Division of Insurance (DOI). If approved, these rates are the premiums individual plan members will pay for 2026 health plans. Of note, some plan members may be eligible for financial assistance, which would reduce their premium.

Anthem filed proposed rates for 2026 individual plans at the end of June 2025. The Colorado DOI typically approves the rates by mid to late August, but this year, the DOI has advised it may not approve the rates until September 30.

The delay of approved rates can cause uncertainty for 2026 planning purposes.

Given the uncertainty about the rates, Anthem may need to change which individual health benefit plans it could offer for 2026. In accordance with Colorado law, Anthem had to notify the state of the potential changes by August 19.

Anthem wants to continue to offer an individual health plan in every county in the state.

If financially sustainable rates for Anthem’s individual health benefit plans are approved, we will not have to discontinue any health plans listed in our August 19 notice.

Anthem’s proposed rates are based on the healthcare services we expect members to access next year, along with the anticipated costs associated with that care. It is important we propose financially sustainable rates in order for Anthem to cover the cost of care for our members in 2026.

Anthem will not leave Coloradans without an individual health plan option.

Regardless of the state’s decision on our individual rate filings, Anthem will remain in any community where our departure would leave Coloradans without any other health plan option.

Next steps for Coloradans.

Please continue to check this website for more information in the coming weeks. If you will be shopping for a 2026 individual health plan, the following link provides more information about what financial help might be available to you. Upcoming Changes to ACA Financial Help for 2026 | Anthem

UPDATE 9/4/25: Thanks to farmbellpsu in the comments for this article, which states that the $100M funding included in the bill passed by the CO legislature should result in a significant drop in the gross premium rate hikes as well as canceling out a large chunk of the net hikes for subsidized enrollees:

Colorado will ask health insurance companies — which have proposed dramatic price increases for 2026 — to file new rates taking into account funding made available during the state legislature’s special session.

The move is expected to lead to smaller price increases next year for people who buy health coverage on their own without the help of an employer, Colorado Insurance Commissioner Michael Conway said.

...The special-session fix is also just a one-year deal. Conway said lawmakers will still need to come back during next year’s regular legislative session to find a longer-term solution to funding various affordability programs.

...One of these programs helps insurers pay for high-cost claims, allowing insurers to keep prices lower for everyone. The other program is what state officials are calling a “premium wrap.” It is essentially a state-funded subsidy to help lower-income people pay for their insurance premiums.

Combined, Conway is optimistic that the funding will knock 11 or 12 percentage points off insurers’ proposed price increases for 2026. So that would take the average increase from 28% down to around 16%.

It's important to keep this in perspective, however: In any other year, a 16% gross premium increase would be considered at the high end of the spectrum nationally instead of at the lower end, and many enrollees are still looking at paying up to twice as much or more. Still, again, it's much better than nothing.