Colorado Lawmakers Tackle Budget Gap and Rising Health Insurance Costs
Denver, CO – August 23, 2025 – Colorado’s state legislature initiated a special session on Thursday, August 21, 2025, confronting a $783 million budget deficit and the looming prospect of ample health insurance premium hikes for residents. The session was prompted by recent federal tax legislation enacted by congress and signed by President Donald Trump, creating financial pressures on the state’s budget.
Budget Shortfall and Health Insurance Concerns
The primary objectives of the special session are twofold: to close the budget gap resulting from decreased income tax revenue and to counteract the anticipated surge in health insurance costs for individuals utilizing Connect for Health Colorado, the state’s health insurance marketplace. State projections indicate that average premiums could increase by 28% statewide in 2026 due to the expiration of tax credits associated with the Affordable Care Act (ACA), credits that were not renewed under the new federal tax law.
The impact of these potential premium increases is expected to be particularly acute on the Western Slope, where healthcare access is already limited and costs are higher. Estimates suggest premium increases in this region could exceed 40% .
Did You Know? The ACA’s tax credits were designed to make health insurance more affordable for low- and middle-income individuals and families. Their expiration could reverse those gains.
Political Responses and Proposed Solutions
While there is bipartisan agreement on the need to address the challenges, Democrats and Republicans diverge on the optimal solutions. State Republicans have largely defended the federal tax bill, asserting that it provides financial relief through expanded tax breaks for businesses and individuals. Though, some Republicans acknowledge the need for congressional action to mitigate the impact on health insurance costs.
Representative Rick Taggart, R-Grand Junction, a member of the Joint Budget Committee, stated, “I know we’re all talking to our Congress people right now on the same subject, and they all know that this has a very detrimental impact.” He indicated that U.S. Representative Jeff Hurd is prioritizing legislation to address the expiring tax credits.
Representative Hurd confirmed his commitment to finding a solution, stating he is working on legislation to “help alleviate the immediate removal of these vital tax credits, while still recognizing the long-term impacts of healthcare spending.”
Democrats have expressed frustration with the Republican-led Congress’s decision not to renew the subsidies.A joint letter from Senate and House Democrats to Colorado’s federal delegation accused the GOP of deliberately increasing healthcare costs for Coloradans.
Legislative Proposals
Democrats are advancing several bills aimed at bolstering the state’s health Insurance Affordability Enterprise, which funds programs designed to lower insurance costs.The centerpiece of their proposal, House Bill 25B-1006, would allocate $100 million from the state’s Unclaimed Property Trust Fund – currently holding approximately $1.2 billion in unclaimed assets – to the enterprise as an interest-free loan.
House Speaker Julie McCluskie,D-Dillon,believes this funding could help approximately 20,000 Coloradans maintain their health insurance coverage. However, she emphasized that this is not a complete solution and urged Congress to extend the federal subsidies.
Republicans oppose the Democrats’ proposal, deeming the use of the unclaimed property fund fiscally irresponsible. They have introduced alternative bills that would redirect existing funds within the health enterprise by restricting funding for undocumented immigrants through the OmniSalud program. These Republican proposals were defeated in committee hearings.
Pro Tip: Understanding the interplay between federal and state healthcare policies is crucial for navigating the complexities of health insurance affordability.
Impact on Medicaid and Future Considerations
Lawmakers have decided not to address changes to Medicaid during this special session. However,the GOP tax bill is projected to reduce Colorado’s federal Medicaid funding by billions of dollars,with most changes taking effect in 2027. This issue is expected to be addressed during the regular legislative session beginning in January.
| Issue | Details |
|---|---|
| Budget Gap | $783 million |
| Projected Premium Increase (Statewide) | 28% (in 2026) |
| Projected Premium Increase (Western Slope) | Up to 40% |
| Proposed Funding for Health Enterprise | $100 million from Unclaimed Property Trust Fund |
| OmniSalud Enrollment (as of late 2022) | Approximately 33,000 |
What steps can Colorado residents take to prepare for potential health insurance premium increases? How will the outcome of this special session impact access to healthcare in the state?
Evergreen context: Healthcare Affordability in the US
The challenges facing Colorado are emblematic of broader national trends in healthcare affordability. the ACA aimed to expand coverage and lower costs, but ongoing debates over its implementation and funding continue to shape the landscape. Factors such as rising prescription drug prices, administrative costs, and the aging population contribute to the increasing burden of healthcare expenses on individuals and families. According to the Kaiser Family Foundation, healthcare spending accounted for 17.3% of the U.S. GDP in 2022 ,highlighting the significant economic impact of healthcare.
Frequently Asked Questions
- what is Connect for Health Colorado? It is indeed Colorado’s official health insurance marketplace where individuals and families can find affordable health insurance options.
- What caused the potential health insurance premium increases? The expiration of federal tax credits for ACA marketplaces, stemming from recent changes in federal tax law, is the primary driver.
- What is the Unclaimed Property Trust Fund? It holds unclaimed assets like unpaid wages and forgotten bank accounts, which the state is holding for their rightful owners.
- What is OmniSalud? It’s a state program providing health insurance coverage to undocumented immigrants who meet certain income requirements.
- Will Medicaid be affected by these changes? While not addressed in this special session, future changes to federal Medicaid funding are anticipated.
Disclaimer: This article provides general information and should not be considered legal, medical, or financial advice. Consult with qualified professionals for personalized guidance.
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