Colorado health insurance prices may see smaller increase than expected following special session

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.

"This is going to absolutely impact rates," Conway said in an interview.

But the new funding won't entirely blunt the impact of rising prices. That's because special federal subsidies that help people afford health coverage are still scheduled to expire at the end of the year, unless Congress extends them in the coming months.

If those subsidies expire, many people would still see what they pay per month go up significantly — even if the underlying prices for insurance won't increase as much as previously feared.

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.

"This gives us time," he said.

From 28% to roughly 16%

All of this applies specifically to a subset of the insurance market — what is known as the individual market. That is where people who do not get their health insurance through a job or the government shop for plans. Around 300,000 Coloradans buy insurance this way.

Every year, the state Division of Insurance reviews and approves the prices to be charged for plans in that market the following year. For 2026, insurers have proposed huge price spikes. The average increase is 28%, but some insurers have asked for higher raises. People in rural Colorado could especially be in line for above-average increases.

The reason for this has to do with the expiration of enhanced federal insurance subsidies first approved by Congress during the height of the COVID pandemic. That expiration creates a whiplash through the system that will mean Colorado receives less federal money to fund state programs to help people afford coverage.

If those programs shrink and the price of insurance goes up, insurers expect healthy people will drop their coverage. That, then, snowballs into even higher prices because the remaining people who are covered will be, on average, sicker and more expensive to insure. Some provisions of the recently signed "big, beautiful bill" — President Donald Trump and Congressional Republicans' tax and spending measure — could also cause people to drop coverage.

To fight this, the legislature during the special session passed a bill authorizing the sale of tax breaks to raise up to $100 million for insurance 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%.

Concerns still exist

Conway said shrinking those price increases won't fix all the problems because the end of the enhanced subsidies means a lot of people will still see extraordinary increases in what they are paying — perhaps 100% jumps in some cases.

"The core base-rate increase is almost irrelevant in what people are about to feel if those enhanced premium tax credits expire," Conway said.

Think of it like this: Let's say your insurance premium is $200 per month, but you receive a subsidy of $80 a month, meaning you only pay $120 a month. If your monthly premium increases 25% for next year, it would go up to $250, a $50 increase.

But if you also lost all of your subsidy — something that could happen to some people if the enhanced subsidies expire —what you actually pay per month would increase by $130, a 108% increase.

"Congress has got to act here," Conway said. "If they don't, people are going to feel a ton of pain."

The health care industry is expected to mount a lobbying campaign to urge Congress to extend the subsidies by the end of September. Kevin Patterson, the CEO of Connect for Health Colorado, the state's insurance exchange, also said it is important for Congress to extend the enhanced subsidies.

"It's absolutely critical that Congress extend the Enhanced Premium Tax Credits that have helped millions of Americans — including hundreds of thousands here in Colorado — maintain access to quality, affordable coverage," Patterson said in a statement.