More than 200,000 Colorado residents are facing steep health insurance premium increases after the U.S. Senate failed to extend enhanced federal subsidies that reduce monthly costs for people who buy coverage on their own.
The Senate deadlocked this week on two competing proposals. Democrats supported a three-year extension of the enhanced Affordable Care Act premium tax credits, while Republicans advanced an alternative centered on government-funded health savings accounts without extending subsidies.
Colorado Senators Michael Bennet and John Hickenlooper backed the Democratic proposal and voted against the Republican alternative. With no agreement reached, the enhanced subsidies are set to expire at the end of the year.
An estimated 225,000 Coloradans could be affected. Open enrollment for 2026 coverage runs through Jan. 15, and consumers can still select plans that begin Jan. 1. However, pricing is expected to rise sharply if Congress does not act.
State regulators estimate that average premiums for people buying insurance without employer coverage will increase by about 101% in 2026. Those who never qualified for subsidies are projected to see average increases of roughly 23%.
The steepest increases will fall on individuals who relied solely on the enhanced credits and would now be responsible for the full cost of coverage.
The Colorado Division of Insurance has warned that as many as 75,000 residents could drop coverage if the subsidies lapse. Early signs already point to softening enrollment, with marketplace sign-ups running about 5% below last year’s pace.
Colorado set a record with approximately 282,000 residents enrolling through the state exchange.
The enhanced subsidies were first introduced during the COVID-19 pandemic and expanded the Affordable Care Act’s original premium credits. As healthcare costs rose with inflation, the additional assistance helped keep individual coverage affordable for many households.
Geographic disparities are also expected. Because subsidies are tied to local premium levels, rural Coloradans—where base premiums are typically higher—are projected to experience larger average increases than residents along the Front Range.
Hickenlooper said the Senate’s failure to act runs counter to public sentiment and will increase financial pressure on households already struggling with rising costs.
Bennet criticized Republicans and President Donald Trump for allowing the issue to drag on, saying consumers should have had clarity weeks ago while choosing coverage.
“People were supposed to be making their decisions a month ago about what insurance they were going to buy,” Bennet said. “Every day that goes by makes it harder to fix.”
Senate Majority Leader John Thune, R-South Dakota, argued that extending subsidies without broader reforms fails to address underlying healthcare costs. He said Democrats were focused on messaging rather than tackling what he described as spiraling expenses under the Affordable Care Act.
Colorado’s senators rejected that framing, saying the current system leaves too many people behind and that healthcare should be treated as a right with universal access.
Hickenlooper also warned that small businesses will feel the effects. Many employers stopped offering health insurance after subsidies made individual coverage more attractive to workers. About half of people buying insurance on their own either work for small firms or are unemployed.
When premiums spike, he said, stress spreads beyond households and into workplaces.
The subsidy debate previously contributed to last fall’s 43-day federal government shutdown, when Senate Democrats initially refused to fund the government without an extension. The shutdown ended after leaders agreed to hold a vote – one that has now failed.
Hickenlooper said public support remains strong. He cited polling showing more than 80% of people who buy their own insurance favor extending the subsidies, including more than 70% of voters aligned with the MAGA movement.
Absent congressional action, enhanced subsidies will expire at year-end, leaving Colorado and other states bracing for a sharp reset in the individual health insurance market.
