Colorado Bill Seeks to Bolster Health Insurance Affordability Through Fresh Fees
A new Colorado Senate bill aims to address a looming shortfall in the Health Insurance Affordability Enterprise (HIAE) fund by imposing fees on the state’s largest health insurers and securing a substantial loan. Senate Bill 178, passed by its first Senate committee on Thursday, April 30, 2026, seeks to prevent potential disruptions in health insurance coverage for thousands of Coloradans.
Addressing a Funding Gap
The HIAE, which manages state reinsurance programs, OmniSalud, and state-exchange subsidies, faces a projected $139 million funding gap in 2027, according to Colorado Insurance Commissioner Michael Conway’s January report to the HIAE board. This shortfall is largely attributed to reductions in federal funding over the past year.
Proposed Funding Mechanisms
To bridge this gap, Senate Bill 178 proposes a two-pronged approach:
- Health Insurer Fees: The bill would authorize a one-time supplemental fee of $40 million, allocated equally among Colorado’s five largest health insurance companies. These fees are expected to be passed on to customers.
- Loan from Unclaimed Property Trust Fund: The bill also seeks a $100 million loan from the state’s unclaimed property trust fund to provide immediate financial relief to the HIAE.
Potential Impact on Coverage
Supporters of the bill, including Democratic Sens. Kyle Mullica of Thornton and Iman Jodeh of Aurora, emphasize the urgency of the situation. Senator Jodeh warned that approximately 40,000 individuals could lose health insurance coverage if the funding shortfall is not addressed. Senator Mullica, a hospital nurse, highlighted the real-world consequences for communities across the state.
Concerns and Opposition
The bill has drawn criticism from some lawmakers, including Republican Sen. Barbara Kirkmeyer, who attribute the HIAE’s financial difficulties to overspending. An audit of the enterprise is scheduled to be completed in early 2027. The Colorado Taxpayer Institute (CUT) opposes the bill, arguing that it expands the powers and funding of an unelected enterprise outside the constraints of the Colorado Taxpayers Bill of Rights (TABOR). CUT also expressed concern that the one-time fee establishes a precedent for circumventing TABOR restrictions.
Looking Ahead
While acknowledged as a temporary solution, Senate Bill 178 represents an immediate effort to stabilize the HIAE and maintain access to affordable health insurance for Coloradans. The long-term sustainability of the enterprise will require a more comprehensive and permanent funding strategy.