H.R. 1, known as the One Big Beautiful Bill Act, was signed into law on July 4 and is expected to bring major changes to health care financing in Colorado. According to KFF and as 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.”
The reduction in federal funding means that Colorado will need to make adjustments to its state budget. The Governor is anticipated to call a special session of the legislature this summer to address these fiscal challenges.
Estimates from the Division of Insurance (DOI) and the Colorado Department of Health Care Policy and Financing (HCPF) suggest that up to 110,000 patients in Colorado could lose health insurance due to provisions of H.R. 1. Two significant measures are contributing to this: new work requirements for those covered under Medicaid expansion and more frequent eligibility redeterminations—every six months instead of annually—for certain groups. These changes are set to take effect on December 31, 2026. State agencies will need to update IT systems, hire additional staff, and implement other modifications before then.
Another immediate change is a freeze on the percentage states can draw down from federal provider taxes; beginning in 2028 through 2032, this rate will decrease by half a percent each year. All hospitals in Colorado pay fees and receive supplemental payments if they serve Medicaid patients—a system that especially supports rural hospitals where there is a higher proportion of such patients.
According to 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.”
There are also concerns about further increases in uninsurance rates if Congress does not act before year’s end regarding enhanced premium tax credits for people purchasing insurance through Connect for Health Colorado—the state’s ACA exchange—since their expiration would likely lead to higher commercial insurance premiums.
While stakeholders continue analyzing H.R. 1’s broad impact (see detailed analysis here), many remain concerned about how these policy shifts may affect access to health coverage across Colorado.
