Colorado has not yet received $339 million that the federal government awarded it nearly a month ago to help fund programs to make health insurance more affordable.
The U.S. Department of Health and Human Services Jan. 15, during the closing days of President Joe Biden’s administration.
Five days later, the presidential administration changed. And Colorado is still waiting for its money.
In response to questions from ֱ, the state Division of Insurance confirmed that it has not yet been able to pull down money from the $339 million award from the federal payment system.
It is not uncommon for the funds to take a couple weeks to show up in the system after being awarded. But the delay has now stretched on longer than usual.
Colorado Insurance Commissioner Michael Conway declined to comment on the situation and what it might mean, including whether Colorado’s money may be subject to a broader funding freeze in President Donald Trump’s administration.
Regardless, this missing money now joins hundreds of millions of dollars caught in limbo between the feds and the state, with Colorado officials nervously trying to figure out whether the funds for their programs are being held up intentionally or due to technical tangles. This confusion is made worse because the Trump administration instructed many federal agencies — including the Department of Health and Human Services — .
Colorado is among the states that have sued the Trump administration over its previously announced funding freeze. After a judge blocked the freeze and ordered money to flow, Colorado and other states saying that funds were still being held up.
In to the White House regarding overall funding issues, Colorado leaders said “more than $570 million in obligated funding remains inaccessible.” It is unclear whether the health insurance money is included in that tally.
“The consequences of this continued uncertainty are severe and could have a devastating effect on the programs and people this funding supports,” the letter, signed by Gov. Jared Polis and Colorado U.S. Sens. Michael Bennet and John Hickenlooper, stated. “Companies are considering staff furloughs. Employers in rural communities are rescinding job offers. Long-standing Colorado businesses, some with over 40 years of operation, now struggle to pay contractors working on facility expansions.”
The missing $339 million
In the case of the missing $339 million, the money is part of an annual allotment known as pass-through funding. It is authorized under a portion of the Affordable Care Act — the health care law also known as Obamacare that is a frequent target of Trump’s.
The state receives the funding because it has implemented various health insurance programs that save the federal government money on insurance subsidies. These programs include reinsurance, which helps health insurers pay their highest-cost claims, and the Colorado Option, which imposes price limits on insurers and hospitals for certain plans.
In exchange for these savings, the feds send a portion back to Colorado every year. Colorado uses that money to run the affordability programs.
The federal pass-through dollars flow into an entity called the Colorado Health Insurance Affordability Enterprise, where they pool together with money collected from a fee on insurers.
That combined pool is then used to fund the reinsurance program, as well as to provide extra subsidies to some lower-income consumers and to provide subsidies through the OmniSalud program to immigrants who are ineligible for federal insurance subsidies.
The state usually receives its pass-through funding much later in the year. When the award for 2025 was announced last month, Conway said in an interview the timing was due to better collaboration with the federal government, not about the Biden administration trying to beat the clock.
“It’s just a clear signal that we’ve worked through the issues with the federal government of figuring out how to calculate the impact of reinsurance and the Colorado Option,” Conway said then.
Because it receives funding beyond the federal pass-through dollars, the state Affordability Enterprise has money available to continue paying its bills. But it was already facing due to the looming end to enhanced federal health insurance subsidies.
If there is a prolonged delay in receiving the federal funding for 2025, that outlook becomes only bleaker.