By Jennifer Leonard
Significant changes are coming to Colorado health care insurance plans in 2026. These changes will be hard to absorb for most residents of the San Luis Valley, as large premium increases are seen across all insurance plans. Medicaid, Medicare and plans included under Connect for Health Colorado, the state’s marketplace for Affordable Care Act eligible plans, will be the hardest hit. As stated by the director of Health First Colorado, Kim Bimestefer, “The bill is anticipated to result in the large-scale loss of health insurance coverage for Coloradans and an extraordinary cost shift to our state that Colorado’s state budget cannot absorb.”
A majority of the changes that will start in the upcoming year are due to the implementation of the “One Big Beautiful Bill Act” (OBBBA) signed into law on July 4, 2025. This was a budget reconciliation bill that brought sweeping policy changes to taxation, spending, immigration and social policy, including a $1 trillion reduction in health care funding that will largely impact Medicaid, Medicare and Affordable Care Act coverage over several years.
The cut to state funding from the federal government that comes with the OBBBA leaves roughly a $1 billion gap in the already struggling Colorado state budget. This led Governor Jared Polis to pass two executive orders that have been continued through February 2026. The orders suspend funding to health care, public health and higher education in order to meet the overall funding shortages across other state government programs including housing, roads and public safety. The 2026 Colorado budget will cover less than half of the increase needed to keep Medicaid and Medicare services the same as they are right now. Cutbacks will be seen in reimbursements to providers, dental benefits, home care giving and provider access.
According to Colorado Access, a nonprofit, advocating for health care access and transformation, approximately 1.2 million Coloradans rely on Medicaid for health care plans. In age. Roughly 1 million Coloradans are enrolled in Medicare. More than 300,000 residents rely on the Connect for Health Colorado marketplace to access affordable care. These upcoming changes could result in up to 377,000 people becoming ineligible for plans or unable to access care.
Plans offered through the Connect for Colorado Health Marketplace will be seeing a huge increase in premiums, due to the reduced federal and state funding. Currently the OBBBA allows the Premium Tax Credit to expire, which is how many people currently access Affordable Health Care eligible plans. Current Marketplace customers that receive financial assistance or tax credit will see an “average net premium increase of 100%, with some rural areas seeing increases of over 200%”, according to an analysis by Connect for Health Colorado of current Marketplace Health Care plans. In addition, out-of-pocket limits will also increase with each option. More plans will be offering Health Savings Account (HSA) choices to ease the higher deductibles and out-of-pocket expenses that will be coming with these changes. This effectively allows non-taxable dollars to be used to pay for certain health care expenses including copays and premiums.
The Center for Medicare Advocacy outlines how Medicare and Medicaid care changes in 2026 will include new definitions for who is qualified, more frequent eligibility checks and more strict reporting. New qualifications for eligibility narrows which groups of lawful immigrants could receive benefits, leaving out a large portion of people who were once eligible. (For a full list of these new requirements, see https://medicareadvocacy.org/ impact-of-the-big-bill-on-medicare.) Emergency Medicaid is still available to ineligible immigrants, which provides funding for emergency health care for immigrants who would otherwise qualify for medicaid except for their immigration status. However, federal funding for Emergency Medicaid has been severely cut as well through the OBBBA, leaving the hospitals that are required by law to provide care regardless of immigration status, to cover the gap. The Establishment of the Rural Health Transformation Fund by the federal government is meant to cover some of these new gaps but may ultimately only provide 1/3 of the money that was once received by hospitals in rural areas to carry the burden of treating the under and uninsured.
Medicare will also see changes. The Centers for Medicare and Medicaid Services announced Medicare Part B plans will be increasing this year by 14.5%, the highest increase in 4 years, eating up 30% of the cost of living increase coming to social security payments in 2026. There will also be a ban on any improvements to the Medicare Savings programs, which often help lower income seniors cover out-of-pocket health care costs.
There will be some changes that are meant to offset some of these added financial burdens like lower caps on prescriptions and vaccines but this won’t likely make up for the increased cost for most seniors. In addition, some Medicare supplemental providers like Humana, United Health Care (UHC) and Aetna are reducing their plan options or pulling out of certain markets completely, citing the increase in medical costs as the reason. In an interview with financial reporting agency Kiplinger, UHC CEO of Government Programs Bobby Hunter stated, “The combination of Centers for Medicare and Medicaid Services funding cuts, rising healthcare costs, and increased utilization have created headwinds that no organization can ignore.” A reduced number of Medicare plans leaves many seniors without reasonable choices for coverage and higher copays, especially in rural areas, like the San Luis Valley where provider access is already challenged. In light of this large change in provider access, seniors can access special open enrollment if they lose their provider access and want to change their coverage.
San Luis Valley insurance broker Jaqueline Mascarenas has been helping local residents navigate open enrollment for years and sees seniors facing hard decisions this year about enrollment. She is particularly concerned about the increase in Medicare Part B premium costs and reduced access here in the Valley.
“The Part B Premium goes up every year, we are looking at $202.90 for 2026. In addition the community is faced with enrolling in a Medicare Advantage Prescription Drug plan with little or no monthly premium but being subject to Out of Network and out of pocket expenses with no access to SLV Health Providers expenses. the other option is switching to a Supplement Plan which will cost $100 or more in monthly premium but have very little out of pocket expense, no out of Network expense and continued access to SLV Health Providers. This is a hard decision for many retirees on fixed incomes.”
Mascarenas, passionate about advocating for her clients, continued, “There has to be reform on healthcare, point blank, period. My hope is that the ACA is extended for three years which would provide plenty of time for officials to get started on a healthcare system that is in favor of the people and not revenue based. We need to put patient care first.”