H.R. 1 – the One Big Beautiful Bill Act – was signed on July 4. It is arguably the most impactful bill on health care financing in a decade. According to KFF and reported by the Colorado Sun: “Colorado will be among the hardest hit states…. Federal spending on Medicaid in Colorado will be cut by about 16 percent, or about $14 billion, over the 10-year period.”

Given the shift in funding from the federal level to states, Colorado will need to reallocate funds in the state budget. The Governor is expected to call a special session of the Colorado legislature this summer to address budget issues.

As many as 110,000 patients in Colorado could lose health insurance due to provisions of the act, according to estimates from the Division of Insurance (DOI) and the Colorado Department of Health Care Policy and Financing (HCPF). Two key measures affecting health coverage are new work requirements for the Medicaid expansion population and eligibility redeterminations every six months instead of annually for certain populations. Both provisions take effect Dec. 31, 2026, and work will need to be done between now and then on state IT systems, hiring more staff, and making other changes to engage beneficiaries.

Taking effect immediately is the freeze on the percentage states can draw down from the federal government through provider taxes; starting in 2028 and continuing through 2032, the rate will be reduced by 0.5 percent annually. All Colorado hospitals pay fees and receive supplemental payments back if they care for patients with Medicaid. This especially benefits rural hospitals, which see a higher percentage of patients with Medicaid.

Per HCPF: “Provider fees fund coverage for 427,000 Coloradans, including 367,000 low-income adults, 34,000 kids in Children’s Health Insurance Program (CHIP), 25,000 adults and children with disabilities via [the] Medicaid Buy-In program and 1,000 pregnant women in CHIP. This significant reduction in federal funding to the state could require a reduction in benefits or coverage for medical assistance programs.”

While many are still digesting the size and scope of the changes from H.R. 1 (see detailed analysis here), many are worried about other cuts that could have similarly big impacts on uninsurance rates in Colorado. Without Congressional action by the end of the year, the federal enhanced premium tax credits for those who buy insurance on the state’s ACA health insurance exchange, Connect for Health Colorado, will expire. Without the subsidies, more Coloradans could lose coverage as commercial insurance premiums increase in price.

Reduced federal funding would have compounding effects on another key initiative. The state’s reinsurance program receives pass-through funding from the federal government because it helps reduce premium subsidies through the payment of expensive claims. With no more enhanced premium tax credit subsidies, the reinsurance savings would drop, which in turn would cut pass-through funding by about $100 million per year, further reducing the ability to keep premiums low for consumers. Those are big gaps to close.

The Colorado Medical Society has been engaged in advocating for physicians and patients, signing onto coalition letters and urging action from members. We will continue to support you through the changing policy landscape. Stay tuned as we navigate these changes and advocate for medicine in Colorado.