Colorado health insurers propose huge price increases following passage of GOP's federal spending bill

Colorado health insurers have proposed huge price increases for next year for people who purchase coverage on their own — a consequence, state officials say, of the recently passed One Big Beautiful Bill Act tax and spending measure.

On average, insurers have asked regulators to approve a 28.4% increase to health insurance premium prices for 2026. That would be the second-largest annual increase since the implementation of the Affordable Care Act.

But the increases hit even harder on the Western Slope and in Grand Junction, where insurers have asked for increases above 38%. Pueblo and the Eastern Plains could also see increases above 30%, according to numbers announced Wednesday by the Colorado Division of Insurance.

The price increases affect health insurance premiums, the monthly up-front costs to buy an insurance plan. Depending on a person's age, family size and where they live, the rate increases could amount to hundreds or thousands of dollars more per year just to have insurance — out-of-pocket costs like deductibles and copays would add even more.

"Tragically, Congress is kicking people off their health care and has created chaos that is going to cost Coloradans money," Gov. Jared Polis said in a statement. "We have not seen premium increases like this since the first Trump administration."

300,000 people affected

These increases apply only to people shopping in the individual market, where people purchase health coverage when they do not get coverage through work. More than 300,000 Coloradans buy health insurance this way.

Many may be eligible for subsidies from the federal government, meaning they would not have to pay full price for insurance. But big changes to the size of the subsidies in 2026 mean many people will pay a higher percentage of their premiums, and others will lose their subsidies altogether and have to pay full price, a cost that could add up to tens of thousands of dollars a year for some Colorado families.

"The 28% — that is the core premium increase," Colorado Insurance Commissioner Michael Conway said in an interview. "But it doesn't reflect what people are actually going to feel when they lose the subsidies, too."

The spending bill's impact

The Republican-backed One Big Beautiful Bill Act makes a number of technical but significant tweaks to health insurance policies that Conway said are increasing prices for next year. Among those are restrictions on automatic renewals, extra checks for subsidy eligibility, a shortened enrollment window, and limitations on subsidies for lawfully present immigrants.

Perhaps more significant is what the bill doesn't do: It does not extend enhanced subsidies created during the pandemic, meaning hundreds of thousands of Coloradans will see less financial help next year to buy an insurance plan. That means the federal government will save money, but it creates a ripple effect that reduces funding for Colorado programs that keep down the cost of insurance.

One of these programs, called reinsurance, was successful in significantly reducing health insurance prices in Colorado when it was implemented, and the state estimates it has helped save Coloradans more than $2 billion since its creation. But Conway said the federal changes means the reinsurance program's impact will be slashed by 40% next year, alone accounting for nearly 8 percentage points — more than a quarter — of next year's proposed increase.

All of these changes are expected to drive down enrollment. The state projects more than 100,000 people will drop coverage due to the higher prices.

But, for insurers, it's also significant who will drop coverage — it will most likely be people who feel like they can afford to do so because they are healthy. This impacts what insurers call the risk pool, the collection of people who are covered by a particular insurer.

When healthy people leave the risk pool, it makes the remaining pool proportionally sicker with less money to go around to cover the pool's health care costs. That, in turn, causes insurers to increase prices to make sure there's enough money to cover everyone.

Colorado's record for the highest annual increase in insurance prices came in 2018 during the first administration of President Donald Trump. That year, Republican efforts to repeal the Affordable Care Act, combined with an administration funding change led to an average 34.3% increase in insurance premium prices.

Regulators must still approve

Conway must still approve the requested price increases, after a detailed review of rate filings by Division of Insurance staff.

Part of the process involves taking public comment, which will be done via a virtual hearing on August 1. People interested in offering comments can sign up here.

Mannat Singh, the executive director of the Colorado Consumer Health Initiative, an advocacy organization, said she hopes regulators will look closely at the proposed rates to make sure that insurers aren't using the federal changes as cover to pad their profits.

"They must also be held accountable," she said in a statement.