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Insurance commissioner: end of enhanced premium tax credits will raise premiums and could push 95,000–110,000 people off coverage unless state steps in
Summary
Colorado's Division of Insurance projected that loss of ARPA enhanced premium tax credits will reduce federal pass‑through funding by roughly $105 million, force large reductions in reinsurance impact and could lead to a 28% average marketplace premium increase request and 95,000–110,000 coverage losses next year absent federal extension or state mitigation.
The state's insurance regulator told the Executive Committee that federal changes in HR 1 will sharply reduce marketplace subsidies and pass‑through funding that undergird Colorado's affordability programs.
Insurance Commissioner Mike Conway summarized the mechanism: enhanced premium tax credits (ARPA) both increased subsidies for people and generated pass‑through funds (Section 1332 waiver pass‑through) that Colorado used to fund reinsurance and state subsidy wraps. Conway said the loss of enhanced tax credits is projected to reduce pass‑through funding by about $105 million for 2026 and that insurers have filed an average requested premium increase near 28% for the 2026 plan year, with much larger regional variation.
Commissioner Conway said the Division's model estimates 95,000–110,000 Coloradans could lose marketplace coverage because higher premiums and the loss of subsidies will make insurance unaffordable for many. He warned that the loss of coverage will also increase uncompensated care and eventually put upward pressure on employer‑market premiums.
State tools: Conway described the three primary state tools still available: the reinsurance program (state contribution plus federal pass‑through), the on‑exchange cost‑sharing wrap (to help low‑income shoppers), and OmniSalud (a program that covers some people otherwise ineligible for federal tax credits). He said available state funds are capped (statutory cap of $90 million for reinsurance currently) and that without additional state investment or federal action OmniSalud will be reduced by about 80% (from ~12,000 enrollees to ~2,300) and reinsurance impact will fall from a targeted 20% average premium reduction to an estimated 12%.
Conway called for rapid legislative and executive collaboration to expand state investments (which can leverage federal pass‑through) or press Congress to extend the enhanced credits. He said targeted state investments could materially reduce projected coverage losses and premium spikes but that time is short to affect 2026 plan year filings.
