Colorado Commissioner of Insurance threatens to shift health insurance funds to illegal immigrants

On Friday, the state commissioner of insurance, Michael Conway, threatened to take money from the state's reinsurance program and shift those funds to pay for health insurance for illegal immigrants, a move described by a participant at the meeting as "defunding reinsurance."

That move could increase health insurance premiums for Western Slope families by an average of about $13,000 per year.

But lawmakers and Gov. Jared Polis don't agree with Conway's comments.

"Reinsurance is a landmark bipartisan initiative that has saved Coloradans $1.6 billion, with estimated savings from 2025 pushing it to more than $2 billion, and helped more people access low-cost insurance coverage," a spokesperson for the governor's office told Colorado Politics. "Governor Polis is focused on saving people money on healthcare, and Coloradans across the state have benefited from this important work. Governor Polis does not support defunding reinsurance for any purpose. Colorado remains committed to continuing reinsurance to save people money. Without it, costs will go up and that is unacceptable."

The Colorado Reinsurance program, authorized by the General Assembly in 2019, allows health insurance companies to cover high-cost claims.

It works by levying a fee on hospitals. Combined with federal funds, that money covers those high-cost claims, thereby reducing the cost of individual health insurance premiums, particularly for people who don't qualify for subsidies under the Affordable Care Act.

Sen. Barbara Kirkmeyer, R-Brighton, told Colorado Politics it's "totally unacceptable." The commissioner doesn't get to threaten people by saying he'll take away money from reinsurance, a program that works, and hand it over to OmniSalud, for non-U.S. citizens. "We should fund U.S. citizens first," she said.

"It's inappropriate and out of line, and the governor should have a discussion with him," she added. "Where does he get off doing that?"

Kirkmeyer said she believes the bill contains a "slush" fund for the division that the commissioner will control. She added, "I think the legislative branch needs more oversight" over the division.

The program has benefited people on the Western Slope and the Eastern Plains, lowering the cost of health insurance by $493 million in 2025. In some counties, it saves individuals more than $200 monthly on their premiums.

But what Conway threatened on Friday was to take those reinsurance dollars and instead fund OmniSalud. This program pays for health insurance for immigrants who have entered the U.S. illegally. He presented his plan during the state's Health Insurance Affordability Enterprise board meeting.

Those who live on the Western Slope, including in the district of Sen. Dylan Roberts, D-Frisco, pay some of the highest healthcare costs in the state, and reinsurance reduces the costs in many of those counties by upwards of 40%.

"I hope we can find a resolution for this that doesn't involve defunding reinsurance," Roberts told Colorado Politics, adding that the program "has helped hold health insurance premium increases in check for rural and mountain communities, and is incredibly important for the ecosystem of health insurance."

It all concerns a bill stuck in the House Finance Committee that health insurers and business groups oppose and Conway wants to see passed.

House Bill 1297 changes the fees charged for the state's Health Insurance Affordability Enterprise, created in 2020. The enterprise assesses a fee on health insurance carriers, which is currently capped at 1.15% of premiums for nonprofit carriers and 2.1% for for-profit carriers.

Those funds, in turn, cover three areas:

The reinsurance program

The OmniSalud program

Payments to carriers to lower the cost of purchasing insurance through the Health Insurance Exchange for individuals who meet federal requirements, including having an income between 133% and 400% of the federal poverty line.

HB 1297 would increase the fees by 1%, in part because of fears the Trump administration might cancel, or otherwise reduce, the federal subsidies for the Affordable Care Act. The impact to insurers is about $67 million per year, according to a recent fiscal analysis.

The bill has run into opposition from health insurance carriers and business groups. While a party-line vote passed in the House Health & Human Services Committee on March 26, it's now stalled in the House Finance Committee, where Conway indicated Friday the measure does not have the votes to pass.

Rachel Beck of the Colorado Competitiveness Council told Colorado Politics when the fee was created in 2020, it doubled the tax and fee rate on the fully insured market. That's the 1.2 million Coloradans who get their health insurance through their employers in small- and medium-sized businesses.

HB 1297 proposes another 50% to 100% increase, bringing the total to about $770 per family per year from the current $500 annually.

Beck said that for every person who saves money through the reinsurance and OmniSalud programs, four people pay significantly more. She said the question they keep asking is, if this is of statewide importance, "Why is such a small segment of Coloradans, who are already burdened by health insurance costs, footing the entire $200 million tab?"

Beck noted that the bill was introduced without input from the business community. However, they later expressed their concerns in a meeting with Conway and bill sponsor Rep. Kyle Brown, D-Louisville, formerly the deputy commissioner for affordability programs at DOI.

The reinsurance program impacts premiums for about 300,000 Coloradans in the individual market. The OmniSalud program enrolls about 12,000 per year. The fiscal analysis notes that HB 1297 would result in a funding reduction for the reinsurance program of about $12 million, and OmniSalud funding would increase by $56 million.

But Conway went further than that on Friday.

According to an email from Kevin McFatridge of the Colorado Association of Health Plans, one of two representatives of health plans on the Health Insurance Affordability Enterprise board, "the meeting took a sharp and concerning tone. Commissioner Conway repeatedly expressed frustration and anger over HB25-1297, stating multiple times that he is 'mad.' He emphasized that he tried to be friendly with the original proposal but is now prepared to 'get ugly' and pursue a more aggressive approach if the bill does not pass."

McFatridge wrote, "In a particularly troubling moment, [Conway] directed a clear warning toward the carrier representatives on the board—myself and Shannon Groves—about the consequences of our continued opposition."

According to McFatridge, the tone got uglier when Conway told the insurance carriers, "If 1297 doesn't pass, people will die."

Roberts said he understands the importance of passing HB 1297 and hoped lawmakers can find a way to accomplish the bill's goals without risking other programs established by the legislature.

Conway "later escalated this rhetoric by threatening to defund the state's reinsurance program to pay for OmniSalud instead, should the Legislature not approve the fee increase proposed in HB25-1297."

According to a presentation from the Division, that could mean an increase of $6,000 per year for a family of four, on average, and as much as $13,000 per year for a family of four on the Western Slope.

And if the bill fails, it will also jeopardize funding for gender-affirming care and for state-paid abortion services, according to the presentation.

Spokesman Vincent Plymell of the Division of Insurance told Colorado Politics in an email that describing the effort as "defunding reinsurance" is incorrect but added that "in speaking to the Health Insurance Affordability Enterprise Board today, Commissioner Conway discussed the consequences if HB25-1297 does not pass this session, noting that if it doesn't pass, the Board will be faced with the impossible decision of either taking away coverage for 9,000 current OmniSalud enrollees OR increasing premiums for all individual market enrollees in 2026 by an average of nearly $6,000 annually (for a family of four), and in places such as the Western Slope, that could be an increase of as much as $13,000 annually. The Board may choose a combination of these impacts, but those are the two options."

Jason Hopfer, who is negotiating on HB 1297 at the Capitol on behalf of the Colorado Association of Health Plans, said they support both reinsurance and OmniSalud, "but the Division and the administration have refused to meet us in the middle. Instead, they have threatened to further drive up costs for everyone."

According to an analysis provided by the Colorado Competitive Council, questions remain about whether the financial problems with reinsurance are as described.

The analysis, pointing to the presentation on Friday, shows the division has been spending about two times the amount of fee funding on OmniSalud than on reinsurance, and the fund has a significant surplus.

The analysis pointed out that the state spends about $35 million to $45 million per year on reinsurance, nearly double that on OmniSalud.

The chart below shows spending. The amount spent on reinsurance is listed as $396 million for fiscal year 2025, but that's offset by the federal support of $361 million, which only pays for reinsurance under the federal waiver.

"If they're only spending $35 million to $45 million on reinsurance per year while carrying a surplus of $75 million of $125 million, it's hard to keep pace with their doomsday messages about how they can't afford to keep reinsurance going, especially when the priority is OmniSalud over reinsurance, the analysis said.

House Speaker Julie McCluskie, D-Dillon, the only lawmaker still in the legislature who sponsored the bill creating reinsurance, was not available for comment.