The Impact of Federal and State Policies Changes on Colorado’s 3rd Congressional District
Rural health care access has long been uniquely challenging, in large part due to the distances between patients and providers. In the early 2000s, poor economies of scale, limited competition, and smaller risk pools drove up costs such that insurance premiums grew increasingly unaffordable for rural residents, particularly in the individual market. Nowhere was this phenomenon more apparent than in Colorado’s 3rd Congressional District (CD3).
The Patient Protection and Affordable Care Act (ACA), which became law in March of 2010, threw a lifeline to rural America with a combination of patient protections and affordability provisions, reducing uninsured rates and improving health outcomes and life expectancy for tens of millions of people. According to the American Hospital Association, over 21 million Americans now have health care coverage because of the ACA’s expansion of the Medicaid program and as many as 24 million Americans now have affordable health insurance coverage through the ACA’s insurance exchanges. We now have greater access to health care than at any other time in our history, with particularly notable improvements in rural areas as exemplified in CD3.
Yet, over the last 15 years, countless attempts have been made to diminish the law in the courts, cut funding for its most important programs, and even outright repeal it. Since 2010, over 2,000 legal challenges have been filed in state and federal courts contesting part or all of the ACA. As of 2017, Congress has tried to repeal or dismantle parts of the law 70 times. The federal budget law passed in July, 2025, known as H.R. 1 or the “One Big Beautiful Bill Act,” will have profound impacts on health care access and affordability, dwarfing all of the changes of the last 15 years combined. In rural Colorado, H.R. 1 is only beginning to show its impact with higher insurance premiums, but more significant changes will be phased in over the next seven years that risk higher uninsured rates, even more unaffordable premiums and out-of-pocket costs, and the closure of hospitals and clinics.
Key takeaways:
- Congressional District 3 (CD3) is overwhelmingly rural with lower household incomes than the rest of the state. These factors make CD3 particularly reliant upon state and federal assistance to bring down the cost of health care.
- The Affordable Care Act (ACA) was a lifeline for CD3. Since its passage, the ACA has been essential in reducing uninsured rates, stabilizing provider finances, increasing the affordability of healthcare, and ensuring competition in the market.
- The recent passage of federal House Resolution 1 (H.R. 1) endangers Colorado’s long-standing efforts to make healthcare more affordable. Because of its outsized reliance upon federal assistance, H.R. 1’s impacts will be most acutely felt in CD3.
- H.R. 1 did not extend the enhanced premium tax credits — financial assistance which significantly lowers the cost of insurance for those who purchase plans through the individual market. Without action, the cost of insurance on the individual market will increase significantly across the state with western slope residents facing the most unaffordable premiums.
- Even if the tax credits are extended, the Medicaid policy changes in H.R. 1 are expected to cause thousands of Coloradans to lose their coverage with serious repercussions for rural health care access and affordability across Colorado.
A Snapshot of Rural Health Care in Colorado’s CD3
Rural health care has always been expensive because of long travel distances, challenges in attracting and retaining providers, infrastructure limitations, low population densities, and less market competition. Rural populations also have lower average incomes and higher uninsured rates, which are generally correlated with smaller risk pools, higher rates of uncompensated care, and higher insurance costs.
Two of these cost drivers bear further explanation. First, lower population densities in rural areas mean that certain costs are shared among a smaller number of residents. Hospitals and clinics have higher fixed costs relative to their patient load for facilities, equipment, and administration, and smaller insurance risk pools mean that fewer people must all pay more to cover these fixed costs as well as high-cost procedures and treatments for patients in their region.
Second, the lack of market competition in rural areas can also lead to higher costs. Unlike urban and suburban areas where competition between hospitals and insurance carriers can maintain downward pressure on prices, sparsely populated rural areas see more limited competition. According to the Colorado Health Institute (CHI), “Colorado counties with the least competition among both hospitals and insurance carriers have the state’s highest insurance premiums. The low-competition, high premium counties are in rural and mountain areas, where market conditions make it difficult to increase competition.” Of the 26 counties that are entirely within CD3, half are considered to have low hospital competition, with the remaining half classified as having medium competition.
Colorado CD3 is the most rural district in the state and has experienced all of these health care issues. Comprising Colorado’s Western Slope and much of southern Colorado including the San Luis Valley, it covers almost half of the state and is home to 730,686 people. With only 14.6 people per square mile and only two cities with populations greater than 25,000 people (Pueblo and Grand Junction), more of CD3’s population lives in rural areas than any other Congressional District in Colorado. The median household income is the lowest for any Congressional District in Colorado at $71,503, compared to the statewide median income of $92,911. Almost 7.5 percent of the population was uninsured at the beginning of 2025.
Source: Colorado redistricting maps
Options for rural health care coverage are similar to the rest of the state and country, with private insurance options through employers or the individual market and public insurance through Medicare, Medicaid, and Tricare (for active-duty and retired military families). But in rural Colorado, people tend to earn less and have fewer overall benefits, including less access to health insurance through an employer, which leads to a higher percentage of the population relying on Medicaid or the individual market for their health insurance.
Coloradans who aren’t eligible for public health insurance and do not have employer-sponsored insurance have the ability to purchase coverage through the individual market. The cost of insurance varies across Colorado’s nine geographic insurance rating areas. CD3 crosses four of them, including two of the highest cost areas in Colorado, rating areas 5 and 9, which cover more than half of the district.
Source: Colorado Division of Insurance
Because of the factors discussed above, the combined enrollment in Medicaid and individual market insurance plans in CD3 is the highest in the state at 31.6 percent of the population. Accounting for statewide enrollment increases since the regional numbers were published, this number may be closer to 35 percent.
Sources/Notes: Population data is from the U.S. Census. Medicaid data is from a 2024 Kaiser Family Foundation report. Statewide Medicaid enrollment is up 8%. Individual market enrollment data is from the January 2025 C4HC open enrollment report. Enrollment is up 19%.
How Colorado’s Implementation of the ACA Changed Health Care in CD3
Under the ACA, Americans were guaranteed health insurance coverage regardless of health status, pre-existing conditions, or medical history. The ACA also offered significant new federal funding to support expanded access to the Medicaid program and financial assistance to help families afford insurance plans on the individual market. These changes significantly reduced the number of uninsured Coloradans. The uninsured rate dropped from a peak of 15.8 percent in 2011 to 6.7 percent just four years later.
Medicaid Expansion and the Hospital Provider Fee
Prior to the ACA, Medicaid eligibility was limited to children, pregnant women, parents, and adults with disabilities, all subject to certain income thresholds. Medicaid also covered long-term care services for older adults, which are not covered by Medicare, and helped those dually eligible for Medicaid and Medicare afford cost sharing. The ACA allowed states to extend Medicaid to include all citizens, including childless adults, with incomes at or below 138 percent of the federal poverty level. Federal funds covered the bulk of the cost of care for the expanded Medicaid population, ranging from 100 percent in 2016 to 90 percent in 2020.
Colorado passed legislation in 2013 to expand Medicaid eligibility as allowed by the new federal law. To cover Colorado’s 10 percent share of Medicaid expansion cost by 2020, the General Assembly passed bipartisan legislation in 2017 to direct a substantial portion of its hospital provider fee, originally established in 2009 to increase reimbursements to providers, to this purpose and exempt the provider fee revenues from the state’s TABOR limit, allowing continued investment in this program without forcing cuts elsewhere in the state budget.
These federal funds provided health care coverage for more than 427,000 Coloradans, including lower-income adults, pregnant women, children (through CHP+), and premium assistance for working people with disabilities (through the Medicaid buy-in program). And they increased Medicaid payments to hospitals by $495 million in fiscal year 2023-24, including $179 million for Colorado’s rural and frontier hospitals, many of which are in CD3. As will be discussed later, the federal budget bill is undercutting this financing option for states, leaving Colorado in an especially problematic position due to TABOR.
Health Insurance Exchanges, Premium Tax Credits, and Innovation Waivers
Prior to the ACA, individual market health insurance plans could only be purchased directly from insurance companies or through brokers. The ACA established a nationwide health insurance exchange, and alternatively allowed states to set up their own exchanges. Exchanges like Connect For Health Colorado (C4HC) were designed to be transparent online marketplaces where insurance companies could compete on prices and provider networks for a range of health plans with varying premiums corresponding to levels of coverage in bronze, silver, gold, and platinum tiers. They applied the ACA’s stronger rate review rules that required a minimum percentage of premiums to be spent on actual health care services, ands helped consumers determine eligibility for financial assistance like tax credits and cost-sharing reductions. These new systems made it possible for people with preexisting conditions to access affordable health insurance while also increasing the number of healthy people participating in the market, sharing costs more broadly and preventing unaffordable premium increases through the tax credits.
According to September 2025 enrollment data, 334,805 Coloradans are enrolled in private health insurance through Connect for Health Colorado, with approximately 80 percent qualifying for some amount of financial assistance. For Coloradans in CD3 that receive financial assistance through the exchange, their advanced premium tax credits — the financial assistance offered through the ACA – ranged from $400 to almost $790 per month. Thanks in part to those tax credits, average monthly premiums cost somewhere between $89 to $169 per month instead of $500 to $1,000.
Section 1332 of the ACA allowed states to apply for “State Innovation Waivers”, to implement alternative, innovative approaches to health care coverage. In 2021, Colorado was the first state to be approved for this waiver which funded the Colorado Reinsurance Program, which pays a portion of high-cost claims to keep premiums lower. The Division of Insurance (DOI) estimated that, in 2025, the reinsurance program saved Coloradans an average of 23.8 percent on premiums totaling nearly $493 million. For the 17 Western Slope counties in CD3 (rating areas 5 and 9), the reinsurance program reduced projected premiums increases on average by 40.3 percent compared to where they would have been otherwise. For the nine southern Colorado in CD3 (rating areas 7 and 8), potential premium increases were reduced by 20.3 percent.
Colorado also successfully applied for an innovation waiver for the “Colorado Option,” which required insurance carriers to offer standardized plans with enhanced access to outpatient services. The Colorado Option provided over $135 million in annual federal funding to expand access to affordable, quality health insurance.
Since 2010, the ACA and related state programs have reduced the number of uninsured residents in CD3 by double digits. Nearly two hundred thousand people in the district are covered through Medicaid. Tens of thousands can now afford private insurance coverage because of more stable risk pools and premium tax credits . State programs like C4HC, the Reinsurance Program, and the Colorado Option have reduced premium increases (compared to where they could be) and helped stabilize the individual market in CD3. And provider fees increased Medicaid payments to financially stressed rural health care providers.
The Undercutting of the ACA: 2011-2024
The ACA came under assault as soon as it was signed into law. After an acrimonious year of debate over the legislation and a partisan vote, the uncertainty about the future impacts of the ACA was a major issue in the 2010 election amid the slow economic recovery from the Great Recession of 2008. Congress introduced the first of many attempts to repeal the ACA in January 2011; the measure passed the House but failed in the Senate.
In the years that followed, the ACA was imperiled by the defunding of the risk corridor program, a turbulent rollout of the federal health insurance exchange website, changes in insurance networks that required many Americans to find new health care providers, and the refusal of many states to expand their Medicaid programs.
In 2017, during the first Trump term, there were further attempts to end the ACA or chip away key provisions, some of which significantly contributed to rising premium costs in Colorado. The first occurred when the administration and Congress spent months trying to repeal the Affordable Care Act. That attempt to end the law without a replacement made insurance companies fear a collapse of the individual insurance market.
After failing to repeal the ACA in July of 2017, Congress repealed the penalty for the individual mandate that required people to buy insurance. Insurers feared that repeal would discourage healthy people from buying coverage. The Trump administration also ended “Cost Sharing Reductions” (CSRs). CSRs were discounts required to be offered by insurance carriers that lowered the amount that certain income-qualified customers had to pay for out-of-pocket costs (deductibles, copayments, and coinsurance) for plans purchased on the exchange. When the federal government ended these payments, insurers across the country faced billions in losses. The combined effect of ending the individual mandate and terminating the CSRs contributed to the largest average state-wide premium increase in Colorado history. In 2018, health insurance premiums increased by an average of 32.2 percent.
In 2019, in part because of state efforts to mitigate the CSR changes, the market stabilized again and premiums for individual health insurance plans only increased by an average of 5.6 percent.
“The 2019 premiums are the lowest we’ve approved in years, with minimal increases and, in some cases, decreases, this is a dramatic change from last year’s severe increases, which were exacerbated by instability at the federal level and the Trump administration’s last-minute decision to cut off cost-sharing reduction payments.”
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The COVID-19 global pandemic struck early in 2020, driving patients to hospitals and other health care facilities to seek testing, treatment, and ultimately vaccines. Because of the coverage expansions in the ACA, considerably more Coloradans had access to healthcare services during the crisis. But the s increased demand for health care correlated with reduced economic activity due to quarantines and stay-at-home orders, shaking state budgets and driving recession fears. In the first months of the Biden administration in 2021, Congress passed the American Rescue Plan Act (ARPA). Among the act’s numerous provisions were two that impacted health insurance coverage. First, the act increased the amount of matching funds provided to state Medicaid programs, allowing states to maintain funding for health care access for their lowest-income citizens. Second, the act increased the premium tax credits for Americans buying health insurance on the exchanges and extended eligibility for credits to higher income levels. Those enhanced premium tax credits (ePTCs) were critical for making health insurance affordable for middle-income Americans and steadying insurance premium increases from year to year.
The One Big Beautiful Bill Act of 2025
H.R. 1 (House Resolution 1), officially titled the “One Big Beautiful Bill Act,” is a federal budget bill that was signed into law on July 4, 2025 by President Trump as the first major piece of legislation of his second term. The primary goal of the budget bill was to extend and expand the tax cuts created by the 2017 Tax Cuts and Jobs Act, which disproportionately benefited the wealthiest individual and corporate taxpayers, as well as to increase federal spending on energy, immigration enforcement, and national defense. To pay for the tax cuts, H.R. 1 made major health care spending cuts and policy changes that undermined the progress of the ACA to a greater degree than all previous efforts combined.
H.R. 1’s greatest impact on health care in the United States and Colorado are its provisions related to Medicaid, which are projected to reduce Medicaid funding nationwide by approximately $1 trillion over 10 years. The two most significant changes to the Medicaid program in HR1 are the work requirements and provider fee limitations.
Even though 92 percent of Americans on Medicaid work full or part time or qualify for an exemption (students, people with disabilities, etc), starting in 2027 the new law will impose new paperwork requirements including twice-annual reverifications and proof that applicants are working a minimum of 80 hours a month, or qualified for an exemption, in order to stay on Medicaid. This change increases the chance of coverage loss due to missed paperwork or deadlines, even for those who legally qualify. In the most recent state experiment (Arkansas), 25 percent of the Medicaid population lost coverage over the nine months it was in effect, and there were no indications of increased levels of employment.
Beginning immediately, H.R. 1 freezes the amount of hospital provider fees that states can assess to draw matching federal funds, and from 2027 through 2032 will lower the current limit of 6 percent of net patient revenue to 3.5 percent. Nearly all U.S. states use provider fees or taxes as part of their Medicaid state-share and will be required to find alternative funding or else face significant federal funding reductions.
In addition to the Medicaid changes, H.R. 1 will directly impact private health insurance premiums by allowing enhanced premium tax credits established by ARPA to expire at the end of 2025. According to the non-partisan Congressional Budget Office, about 4 million Americans will lose their current coverage and become uninsured.
The Trump administration also finalized modifications to open enrollment periods, outreach, eligibility, and health plan standards for the ACA marketplaces. The Trump administration’s Centers for Medicare & Medicaid Services (CMS) estimated that as many as 1.8 million people living in the United States could lose health insurance coverage because of those changes.
Measuring the Impacts of H.R. 1 in CD3
H.R. 1’s cuts to health care safety net programs will hit CD3 especially hard given its reliance on Medicaid, the individual insurance market, and federal funding sources that support rural hospitals and clinics. Tens of thousands of CD3 residents are likely to become uninsured or will face larger premium increases than ever before. Hospitals and clinics will be placed under far greater financial strain.
Medicaid
According to HCPF, 377,000 Coloradans will face the risk of losing their coverage because of the new paperwork requirements, which include twice annual reverifications and proof of work or an exemption.. This includes approximately 63,000 in CD3. And as previously noted, comparable policies in other states have led up to 25 percent of Medicaid members to lose their coverage. Other estimates suggest that these requirements along with other changes to Medicaid will lead to 130,000 Coloradans losing their Medicaid over the next ten years, or 34 percent of the current population. These new paperwork requirements are expected to cost $57 million in administrative costs, which could otherwise be spent on healthcare services, and require the hiring of 3,700 new case managers, nearly doubling the current county-level workforce for processing Medicaid eligibility.
The state’s hospital provider fee and the matching federal funds have supported the Medicaid eligibility expansion as well as certain programs for kids and people with disabilities, reducing the uninsured rate and increasing reimbursements to health care providers, especially in rural Colorado. The provider fee ratchet-down in HR1 will result in a loss of $575 million in provider fee revenue and up to $2.5 billion in matching federal funds when fully implemented in 2032, for a net reduction of nearly $2 billion per year.
Because of Colorado’s TABOR amendment, the county administrative and software costs of the paperwork requirements will likely require cuts elsewhere in county budgets, which are already tight, especially in smaller, rural counties. And the loss of the federal funds from the provider fee changes cannot be replaced without major cuts to the state budget, where the three largest spending categories of K-12 education, higher education, and Medicaid already consume 70% of the General Fund. These budget challenges could create risks of even larger Medicaid disenrollments.
Higher Insurance Premiums
If Congress takes no further action to extend the enhanced premium tax credits (ePTCs), an estimated 225,000 Coloradans will pay 101 percent more on their insurance premiums than last year and up to 75,000 Coloradans may opt out of purchasing health insurance because of the high cost. The premium increase is lower than a previous estimate of 174 percent because of state legislative action during the August special session in response to the passage of H.R. 1, which will be discussed further below. An analysis by C4HC provides numerous examples of premium impacts for different populations in different regions, most notably showing that certain customers in CD3 who currently qualify for tax credits will see net premium increases of 246 percent.
Insurance rate filings following the passage of H.R. 1 showed steep increases in premiums across Colorado, with the most significant increases in rating areas 5 and 9. The following table shows the total annual premium for a family of four compared to the median income in each rating area. With the expiration of the ePTCs, a family of four with income above 400 percent of the federal poverty level ($128,600 per year) will receive no assistance paying for their premiums and will have to spend between 20 and 29 percent of their income on health insurance premiums in 2026 in the rating areas crossing CD3.
Sources/Notes: Premium data from a July 30, 2025 Colorado Division of Insurance presentation. Median income data from the decennial Census.
Because of the projected enrollment reductions due to the premium increases, far fewer households will share the fixed costs, expensive procedures, and uncompensated care costs, which will drive even higher premium increases in the next year. This vicious cycle may lead to insurers pulling out of the Western Slope, leaving few options for the people living there.
The Colorado General Assembly responded to HR1 by holding a special session in August 2025, with the main focus being the rebalancing of the FY2025-26 budget after the federal tax cuts reduced current-year state revenue by $1.2 billion. But they also passed legislation to increase funding for one year for the reinsurance program to mitigate some of the anticipated premium increases.
These policy changes secured agreements from two major health insurance carriers to continue offering coverage in the individual market, but these improved rates will not offset the loss of the enhanced premium tax credits, especially if state budget pressures prevent a continuation of reinsurance program funding.
If Congress were to take action to continue the enhanced premium tax credits, it would significantly reduce these cost increases for families, leaving the most significant harms of H.R. 1 to take effect after the 2026 election when the Medicaid paperwork requirements and provider fee reductions kick in.
Rural Hospitals and Clinics
When individuals lose Medicaid or insurance coverage, they may still need care for medical emergencies or serious health conditions. If they can’t pay for it, that can lead to uncompensated care costs for hospitals or other providers that can be much more expensive than earlier interventions that are possible for people with insurance.
Medicaid pays for at least 20 percent of all hospital services at thirteen facilities across CD3, encompassing hospitals in Alamosa, Cortez, Craig, Fruita, Glenwood Springs, Gunnison, La Jara, La Junta, Pueblo, Rangely, Rifle, and Trinidad. The Colorado Hospital Association (CHA) expects these hospitals to lose Medicaid funding starting in 2028 due to reduced provider fees and other provisions in HR1. The expiration of the enhanced premium tax credits after 2025 will further increase the number of uninsured. Loss of Medicaid or private insurance coverage will increase the amount of uncompensated care for rural hospitals and clinics.
"[W]e are deeply disappointed by the passage of the One Big Beautiful Bill Act. The bill’s devastating cuts to our health care system will affect all Coloradans. In Colorado alone, we anticipate that more than 150,000 Coloradans will lose health insurance coverage, and hospitals and health care providers will face more than $10 billion in cuts over the next five years. These aren’t abstract numbers – they mean fewer nurses at the bedside, longer ER wait times, closed maternity units, and entire hospitals at risk of shutting their doors. This bill did not use a scalpel to trim inefficiencies. It swung a sword – slashing through vital programs that serve vulnerable patients, sustain rural communities, and protect access to care. Today, most Colorado hospitals have thin or negative operating margins… When hospitals treat more uninsured patients while getting paid less, the result is predictable:
- More closures of essential services and facilities
- Longer wait times and delayed care (for everyone)
- Lost jobs and weakened local economies
- Worsening health outcomes across our state
— Colorado Hospital Association
H.R. 1 does include a $50 billion program to support rural hospitals. However, these funds will only cover a small fraction of the anticipated losses from other provisions of HR1, especially considering that no more than 15 percent of funds can be used for provider payments.
What the Slow Death of The ACA Means for Health Care in Rural Colorado
Across Colorado, the combined impacts of H.R. 1’s Medicaid cuts and the expiration of the enhanced premium tax credits will create immediate challenges for access to affordable health care while increasing financial strain on health care providers. Because of the existing health care access issues and lower median incomes in rural Colorado, especially in Congressional District 3, the health care provisions of H.R. 1 will reduce health care access and drive unaffordable cost increases for thousands of rural Coloradans.
And these harms will likely compound over time. Reduced Medicaid and insurance enrollment means fewer people will seek regular health care, reducing payments to health care providers while increasing uncompensated care costs when people get really sick due to delaying care. At the same time, the HR1 provider fee reductions will directly reduce compensation to health care providers. With reduced revenue and increased costs, providers may have no other option but to negotiate higher reimbursements from insurance companies, which will be passed along to consumers in the form of higher premiums. Higher premiums will lead even more people to drop their coverage, and insurance carriers may stop offering coverage in rural Colorado. In a vicious cycle, these disenrollments will even further reduce provider revenues while increasing uncompensated care costs, which will in turn drive even higher insurance premiums.
While Congress could act to continue the enhanced premium tax cuts and repeal the Medicaid cuts, state policymakers are left with few options and may not have the ability to intervene to increase funding for rural health care providers and affordability assistance for rural Coloradans. While many other states face similar challenges, those in Colorado are particularly acute because the TABOR amendment places an arbitrary cap on annual budget growth and prohibits policies like graduated income taxes that require the wealthy to pay more.
Before the ACA, Colorado’s health care system was characterized by high numbers of uninsured, limited access to care for those with pre-existing conditions, and a costly insurance market that only offered limited options and higher prices. Insurance plans imposed annual or lifetime spending caps, leaving people uncovered or uninsured when that cap was reached. Many in CD3 lacked insurance due to cost, and often the only affordable plans offered minimal coverage with high out-of-pocket costs. For those who couldn’t afford coverage, there were no regular doctor visits, no preventive care, and only emergency room treatment. A system that left more people without coverage meant that health care providers would shift those costs onto those who could, resulting in higher premiums for everyone else.
For over a decade, the ACA has been a lifeline to rural communities, making health insurance more affordable, reducing the number of uninsured Coloradans, and stabilizing provider finances. Much of the ACA remains intact, including the exchanges, the original tax credits, and guaranteed coverage regardless of preexisting conditions. But without the affordability assistance provided by the enhanced premium tax credits and the federal matching funds for Medicaid, rural Colorado is again facing higher uninsured rates, ever-increasing premiums, and enormous financial challenges for hospitals and clinics. As more of the provisions of H.R. 1 take effect between now and 2032, we may well be headed back to the pre-ACA days when the uninsured rates in Colorado were in the double digits and even higher on the Western Slope and other parts of rural Colorado.
Bob Semro is a Bell health care policy fellow.
Acknowledgements: Many thanks to our partners at the Colorado Center on Law and Policy and the Colorado Consumer Health Initiative for their contributions and feedback.
