Senate Finance [Apr 30, 2026 - Upon Adjournment]

first. Senator Bright. Good morning, Madam Chair, members of the committee. Senator Marchman and I are here excited today to present Senate Bill 180 and explain why this bill matters for working families in Colorado. We all value the opportunity to work hard, the freedom to raise our families as we choose, and the ability to give our children a brighter future. Access to affordable childcare is foundational in making that possible for working families in Colorado and yet Colorado ranks among the most expensive states for in the country for child care. Families are paying as much for child care as they pay for their rent or their mortgage. Many of our low-income families have historically been able to count on the Child Care Assistance Program in Colorado or CCAP to bridge that gap but as every member of this committee knows CCAP is under an enormous strain. As of April 1 this year, 20 counties have frozen new enrollments, and seven more counties are using active wait lists to serve their populations, meaning thousands of families are unable to access care. This is simply unacceptable. I see this from both sides. As a third-generation early childhood provider, I operate child care centers across Weld County. I see those families who walk in hoping there's a CCAP-assisted slot. I see the staff who love these kids and cannot afford to stay in the field. And I see what happens when the system breaks. Parents leave jobs, cut hours, burn through sick time, or put off the training and education that would move their family forward. That cost does not just hit the family, it hits the employer. It hits the local economy. It hits every taxpayer in the state. The bill before you today is a critical step towards changing that. So how do we help these families without raising taxes, without raiding K-12 or transportation, and without writing a check that the general fund cannot cash? The answer, sitting right in front of us. The state of Colorado has billions of dollars in special funds, enterprise accounts, and authority accounts. Most of that money is invested in a pooled, fixed income portfolio designed for safety and same-day liquidity. That makes sense for the general fund. It makes sense for money the state has to draw on tomorrow. But a meaningful share of that cash doesn't need to be available tomorrow. With a longer horizon and a more diversified strategy, the same kind of strategy that any university endowment or pension fund uses, those dollars could earn substantially more. This is what Senate Bill 180 does. It generates a new revenue to create a permanent fund for child care access in our state. It establishes a special purpose authority, or SPA, tasked with using investment returns to create the permanent state fund for child care assistance, which is intended to help alleviate the child care enrollment freezes and wait lists many counties are currently experiencing. It directs funding to low-income families, making sure help goes to those who need it most, and it caps administrative costs, maximizing the dollars funneled to direct services. The result is a permanent recurring predictable stream of dollars going directly to the families who need it most Now I want to address something directly because I already heard this and expect we hear it again today that this weakens Tabor protections. That's not accurate and I'd love to be specific about why. This bill does not touch the general fund. It does not touch Tabor subject revenue. It does not move a single dollar out from under the state's Tabor spending limit. By the plain text of section 24, 118, 106, the authority can only invest money that it is already in a special fund outside of the state's general revenues. And that did not constitute a state fiscal year spending when it was received. And that is liquid and unencumbered. In other words, the money this bill works with is already today before this bill outside of the TABOR cap. And it stays outside of the cap after this bill. Earnings on TABOR-exempt principles are themselves TABOR-exempt. The nonpartisan fiscal note confirms this distinction in writing. Earnings flowing back to the enterprises remain TABOR-exempt. Earnings distributed directly to counties are not tax state revenue at all. This bill works within TABOR. It respects TABOR. It does not erode a single taxpayer protection. What this bill does do is something both sides of the aisle should be able to support. For those of us focused on fiscal responsibility, this is not a tax. It's not a new general fund spending. It is taking money the state already owns, money that is currently underperforming and giving it a chance to earn a real market return. The way every serious institutional investor manages long horizon dollars, the principal is protected, the participating entities share in the upside. For those of us focused on working families, this is real recurring money for the thousands of Coloradoans on the CCAP wait list right now. It supplements federal funding at a moment when those dollars are flat and increasingly uncertain. It puts decision-making in the hands of people who actually know the county-level need. For everyone in this room, every dollar that we invest in child care pays off. Children in high-quality early care have higher graduation rates, higher earning potential, and better long-term outcomes. Access to reliable quality child care is a proven economic tool that can generate over $2 billion in potential GDP for our state economy. This is a smart investment. This is better stewardship of the dollars. If this bill were a ballot measure, the question to the Colorado voters would be simple. without increasing taxes, shall the state of Colorado invest smarter to support low-income families in Colorado? I think we already know how Colorado would answer that question. I'd love nothing more than from this committee to show Colorado what true bipartisan support looks like. Republicans and Democrats willing to think outside of the box, work across the aisle, and deliver real help to low-income families who are counting on us. I respectfully ask your support, and with that, I'll hand it over to my co-prime.

Thank you, Madam Chair. And I just want to start with a huge thank you to my co-prime. We talked before sessions started, and my co-prime had taken it upon himself to come up with a list of maybe two dozen ideas to try to help child care in the state. And I appreciate the fact that he would try something, stakeholder it, oh that wouldn't work. Try it, stakeholder wouldn't work. That's why this bill is coming so late We been working on it throughout the entire session I just want to start with a number That number is 13 That is how many children in Colorado are right now on wait lists So they're locked out of child care today, not because their families don't qualify. These are some of the most needy families, not because the providers don't want to serve them, but because there's no money. Federal funding for child care has been flat, not just for a little while, but for 30 years. Clearly our general fund is constrained and every year we keep coming back and saying we really value child care and every year our wait list grows. So this bill does something different. It does not ask for a new tax. It does not take a dollar from general fund and it does not mandate anything from anyone. What it does is ask a simple question. Should Colorado's public money work harder? And should we invest that money into child care? Right now, billions of dollars in state enterprise reserves sit in the tea pool, earning about 3.5% in conservative fixed income investments. That's the right approach for money that needs to be liquid and available tomorrow. But some of that money, the idle reserves that won't be needed for years, could be earning significantly more. As we heard, this bill creates a SPA, not my favorite kind, but a special purpose authority that allows enterprises to voluntarily, with their own board's approval, invest a portion of their idle reserves in a diversified portfolio. They get their principal back, they get their T-pool equivalent earnings back, and then they get an incentive on top of that. Anything else spills over and goes to counties for child care assistance. Nobody's forced in, no principals at risk, and no general fund dollars are touched. We are going to be offering a number of amendments today, but I want to address family directly, because I know it's on everyone's mind. Family, F-A-M-L-I, was created by Colorado voters for a specific purpose. The committee today is going to vote on an amendment that explicitly prohibits any voter-created enterprise from participating in this authority without a subsequent vote of the people. Family is carved out. Full stop. We're also offering amendments today that strengthen the governance of this authority to match other authorities that we already use in this way, such as PARA and CHAFA. We're going to have nine members, three Senate-confirmed investment professionals appointed by the governor, county human services director, an eligible entity representative, and two child care seats. We are codifying a three-year reserve built into statute, so counties and advocates have a legal commitment, not a policy promise. And we're outing county accountability reporting, so every dollar that reaches a county is traced back to families served by program type. This bill respects local control, and it gives 13,000 Colorado children a fighting chance at getting off a wait list. I ask for your support. I'm happy to answer any questions, And I know that we have a lot of testimony as well. So looking forward to that. Thank you.

and how those investments would work?

We do.

Thank you.

Senator Bright.

Senator Kolker.

Senator Marchman.

Senator Colker.

Senator Bright.

Senator Kolker.

Please, dialogue.

I'm not following the question. Can you say it differently?

Senator Marchman.

Senator Colker.

Senator Bright.

I think Senator Bright wanted to respond to your previous question.

How do you determine that?

So to make more money, will they have to take more risk?

You're correct. And how much money are you looking to earn to cover the cost?

What's the need, though?

Is that correct? Because it defines security in here.

And we have nine people who are monitoring this with just a couple of financial professionals. Most people who are elected or government appointed, how do you see this working?

But will they be daily monitoring this, or will they be contracting this out?

And then how is that paid for?

I see it's at 1% of their earnings. Are you changing that in the amendment or is that still 1% of their earnings?

Because it also says that you're eligible to contract out with other providers.

The 1% of the earnings? Right.

I see Senator Kirkmeyer here, hand up.

So please let the record reflect that Senator Frazella is here. Senator Benavides.

Is that what's contemplated?

Two more questions. One has to do with the child care seats. And is there going to be an amendment to make them non-voting or not there, since at least one of them would be a recipient?

Yeah, that's a great question. And we do intend to address that to make sure that, you know, we're addressing financial concerns with the most appropriate voices. Okay. And then the final...

Thank you. The final question is on your last amendment, which I know we haven't gotten through, but I'd rather ask it now and then as it comes up. It's talking about setting aside a reserve of 5%. And if there's 1% cost, administrative costs, and then the 5% reserve. And the way this reads, it's saying that in the first year, 100% of what you've earned would go towards this. and it goes through to contemplate in the fourth year that you're still paying into the reserve. So my question is do you have any sense of when there will be any disbursements to any of these groups that put their money at risk here

To be clear, they will get their money back plus some incentive year one. Year two, child cares will start getting a little bit. They'll get like 25% of what's above. So we've got the reserve being filled until it gets to 5%. So year one, the enterprise will get back what they gave, plus the T pool, plus a little bit, and then any additional earnings go to reserve. Year two, same thing. They get their money back, they get the T pool earnings, and they get the extra incentive that we've included. but then 25% will go to child care and 75% will go to the reserves.

Okay. I can go over this line by line because I don't read it the same way on that amendment, that that's what happens, specifically when it says in the first year up to 100% of that amount that would have otherwise been dispersed to counties for child care assistance. And so if it's 100% to try to get to the reserve, I don't see how there's any left in the first year that can be distributed in any other way.

I'm going to come over and show you a picture in a second, but I can explain what that is. There's the amount that they gave us. Then there's the amount that the T pool would have earned. And then there's the incentive. So one, two, three things. And the fourth thing on the top is earnings. All of the additional earnings go to reserves the first year. So all of that goes to reserves. But that's after we've paid back the enterprise, paid back the extra incentive, and paid back the T pool for what it was doing. So they get all of that. It's just the extra earnings.

And just to be clear, you'll have to point me into the bill where those first three things happen.

Thank you, Madam Chair. And I think the intent, just in simpler words, is that we want to make sure the reserve is filled and available in that first year before we start funding child care. So we want to get to that five-year target of reserve. I'm sorry, 5% target of reserve. And once we've gotten there, then we can open up funding to child care.

Thank you, Madam Chair. I'll probably hold off on all my questions until the other expert person gets up here, not that you all don't know it, but I'm just going to say this. Last year we did a deal, because I marshaled this bill through with regard to Prop 130, and it was Senate Bill 310 last year. and what we did was is we took money out of our reserves, still in our reserves essentially, but had para-invest it. Here's why I like your idea. Because the Treasury does a good job. They're very consistent, but they can only go so far. They get about 3, 3.5% or so on the return on the money at best. Para got 11%. So that's why I like your idea, And it seems to me it's kind of shaped after, you know, what PERA is doing and similar to what we did in that bill last year. It works. And so that why I was asking about the University of Colorado or if you looked at others that could help really do the investment that already know how to invest We know what they getting We thought we were only going to get maybe 6 or 7 maybe 8 at best They got 11%. So it's incredible. Anyways, just a comment. I'll save my questions.

Yeah, and just to, in the vein of that comment, my understanding is like, you know, the Treasurer's office is getting like 5.7% on the investment. That's what they told me just yesterday. I think it's interesting about para. I mean, para goes up, para goes down. Sometimes para has had a negative return. That's not what I want to happen with money. But the question I do want to ask is I'm curious. You said you had a copy of the other memo. I keep on hearing there's a second memo. There's this public one that's available from the Attorney General's website. In its footnote, it makes a reference to the public purpose authority. When the governor's team met with me about this bill yesterday, they said, oh, we have an amendment that says, or a memo from our other AG people that says the exact opposite thing. And they're like, but we can't share that with you. And they were going to share with me excerpts, which I did not see, so I don't know if they ever sent those, but I did not see them. But here is my concern. You have, do you guys have the other memo? Are you able to share it? Because what I told them is like, if I understand attorney-client confidentiality, but if it is from the AG's office and it is going to your office as the governor, then you guys can waive the client confidentiality and share that memo. And I have not seen the memo that tells me an exact opposite thing, which leads me to believe that they don't want to share it because it doesn't have the, not all of the information points to the exact opposite as was represented, which is my concerns. So I will just say that if somebody does want to share that other memo that theoretically has opposite information, I would love to see it.

Thank you. I haven't seen it either. It is protected by attorney-client privilege, and I was neither the attorney nor the client. But, yeah. Now, I hear what you're saying. I talked to the AG's office after I talked to the governor's office, and I said so they could release that if they chose to. couldn't they? They said yes, they would just have to give us a heads up that they were doing it. So if they would care to share that, that would be helpful and informative, I'm sure.

Okay, great. Thanks.

Two minutes. All right. I'm going to move fast. Hi, my name is Kirsten Forseth, and I'm with the Colorado AFL-CIO, and I'm here in opposition to Senate Bill 180. This bill, introduced only days ago, would allow enterprises to move unencumbered fees and interest into the special purpose authority for investments in stocks, real estate, COPs, and private equity, with the goal of higher returns. We support that goal of higher returns. or returns for enterprises. We also support funding CCAP, and it should be a priority for this legislature. We are in a child care crisis. Our concern is what happens next. Returns above the T-pool rate are diverted to an unrelated program rather than back to the enterprise. Consider a hypothetical. I'm a business or consumer paying fees for a specific narrow purpose. Currently, those fees earn 3%. Under this bill, they are handed to an investment firm, let's just say Goldman Sachs, which earns 6%. This enterprise keeps 0.75 of that 3% spread. The remaining 2.25 goes to a county program with no connection to what my fee was intended to fund. Do you think that return belongs to the enterprise I was paying into or into an unrelated program? Do you think I might be upset that my fees are leveraged to subsidize something else entirely? And do you think I might ask the courts to weigh in on that question? Here is the deeper risk. If I sue and the court finds the enterprise has lost its status, the enterprise folds into the general fund. With your vast budget experience on this committee, you know what that means for existing programs. We appreciate the sponsors carving out family. It was a hard-fought program with strict statutory constraints and Colorado Supreme Court decision behind it. But because this bill is moving so fast, I have not had time to evaluate every enterprise at risk with the other labor unions. Family was the most concerning and most pressing, and so we are happy it is out of the bill. With 13 days left in this session, I just want to ask, are you confident an enterprise opting into this SPA will never lose its status?

Okay. Sorry. And if it does, are you confident the general fund can absorb that impact? Thank you.

Yes.

Thank you, Madam Chair and members of the committee. My name is Andrea Kuik, and I'm the Director of Policy and Research at the Bell Policy Center. We're a policy advocacy research organization committed to economic mobility for every Coloradan. And respectfully, we're here this afternoon in opposition to Senate Bill 180. I want to start by saying that we very much appreciate the intent of this bill. We are in absolute agreement about the importance of quality, affordable child care. Work done by our senior policy analyst, Perrine Monet, affirms everything advocates for Senate Bill 180 say about child care. That it is critical to the economic well-being of families, businesses, and our economy. that it is far too expensive, and that it is woefully underfunded. Yet, with all of this, we cannot support this bill. We believe Senate Bill 180's approach is potentially legally risky and poses serious harms to the other services and programs Coloradans rely upon. Our largest concern with the introduced version of this bill is the possibility of investing funds from the paid family and medical leave enterprise through the new structure created through Senate Bill 180. We are very appreciative of the amendment we understand to be coming that effectively exempts family. However, even with this amendment, we have other concerns. These include the creation of potential conflicts of interest relating to differing investment goals. On the one hand, there must be consideration for the health of the underlying enterprise. This potentially stands in contrast to a stated priority of quickly raising significant revenue for child care. Perhaps more significantly, we believe that this bill may endanger the legal status of enterprises that opt into the special purpose authority If this were to happen there would be catastrophic implications for our already strained budget that has faced hundreds of millions of dollars in cuts over the past several years Ultimately, we think there are too many unanswered questions and too little time with less than two weeks left in session to meaningfully work through the potential risks and concerns associated with this bill. While we oppose this bill, we are appreciative of the proponents' attempts to find creative new funding streams, and we remain committed to working on this in the coming years. Thank you again for the opportunity to testify, and we respectfully encourage your opposition.

Thank you, Madam Chair and members of the committee. My name is Kathy White, and I'm with the Colorado Fiscal Institute. While we appreciate the intent of this bill, we don't think this is the right solution at the right time and respectfully oppose. Family was our main concern, given the extreme legal risks that we saw with this bill. We hear that that amendment is coming to address that concern, and we appreciate the sponsor's willingness to exclude it. However, we remain opposed. At the end of the day, this bill is to circumvent the constitutional, statutory, and policy controls that the state treasurer has when stewarding state money. Maybe those controls need to be modernized? I don't know. I do know that that process should be thoughtful, open, thorough, and one that involves more than a handful of people, and that it should not happen with 12 days left in the legislative session. We have heard that this rush to do this bill is because of the immediate crisis in CCAP funding. We do have a funding crisis. However, the scheme created by this bill does not get you funding for CCAP within the next three years. Again, maybe the structure is the right one, but you don't need to decide that today without fully understanding the unintended consequences and the potentially far-reaching effects of this bill.

is Caroline Woodhouse. Allison was not able to join us today so I'll be reading her testimony in opposition to Senate Bill 180 on behalf of the Colorado Bankers Association. At its core this bill proposes creating a second investment structure outside of the state treasurer's office to manage public lots. While the intent to enhance return this understandable primary objective...

At its core, this bill proposes creating a second investment structure outside of the state treasurer's office to manage public lots While the intent to enhance returns is understandable the primary objective is to invest in taxpayer dollars should be paid in tax dollars and yield It must be

other room. I didn't know if we had them in this room. Is that better? Yes, it is. Thank you. Maintaining liquidity and upholding fiduciary responsibility to the citizens of Colorado. The state treasurer's office exists for this exact purpose. It operates within a well-established framework designed to safeguard public funds with a disciplined, risk-managed approach. Creating a separate investment authority introduces fragmentation, duplication, and the potential for inconsistent investments or investment standards across state government. We are particularly concerned that the structure of this new authority may inherently incentivize a greater focus on generating returns to fund programmatic goals rather than maintaining the sound investment posture that public funds demand. Public dollars are not venture capital. They are not funds that can be exposed to heightened risk in pursuit of higher yield. They represent taxpayer money, program funds, and resources that must be available when needed without exposure to unnecessary volatility. Additionally, creating a new board with a mix of investment and non-investment appointees raises questions about governance and accountability. Investment decisions involving public funds require deep expertise, independence, and a singular focus on fiduciary duty. Diffusing that responsibility increases the potential for dangerous unintended consequences. Lastly, we are disappointed in the lack of stakeholdering with banking and financial services. Colorado has long taken a prudent and conservative approach to managing taxpayer dollars. That discipline has served the state well, particularly during times of economic uncertainty. This proposal risks shifting that focus from fiduciary responsibility to high dollar gamesmanship. For these reasons, we respectfully urge a no vote. Thank you very much. Do we have

Thank you, Madam Chair, and thank you, Senator Benavides. I think that our concern, and we have, I think that this was alluded to earlier, with the potential of the enterprises potentially losing their status. I think that that is one of our largest concerns around what that looks like. And if that were to happen, what would that mean for our state budget? because everything that we understand about enterprises is that the fees that you are using for the enterprise, and many of these enterprises also require the interest, any interest earned, to also go to that purpose that enterprise was established for. So if the money is going toward a different purpose outside of what that enterprise was created for, does that endanger the status of that enterprise? That is our concern with this. And if there is another legal opinion on what that would look like, if that was created by the Attorney General's office, we have not seen it either. And so that, again, is our large concern.

Thank you, Madam Chair. And Senator Benavides, that is correct. Any purpose outside of the purpose that is explicitly stated for that enterprise, that clear nexus between what that enterprise and the fees were collected for, and again, that purpose of that enterprise as established by statute.

Thank you, Senator, for the question. Yes, so they need to first establish the state authority that will then invest these funds. they have to set up a reserve because with a riskier investment, they have to hedge their bet in the years where we may go into a recession. And so for at least, and this is true statistically, that if you have money in riskier investments, over the long haul you are going to get better returns. Like para, for instance, has a requirement to get a certain threshold of earnings over a 30-year period. And so you need time to be on your side. And if you don't have time, you need to have the reserve in order to mitigate the short-term loss. And so while the reserve is really important, because if at some point your investment doesn't cover what you owe back to the enterprise in terms of what they earned, and they have to increase their fees, that immediately becomes that is suddenly a tax and not a fee. And that opens up that question of tax versus fee. And so they have to protect against that, and by doing that, that means creating a reserve big enough to cover that loss. And so for at least, and we were told yesterday that there wasn't an anticipation that this would raise money for CCAP, at least within this two- to three-year window, and that counties could use reserves. I don't know that that's true. All I know is that the purpose is to drive money to CCAP this year, and even by what sponsors have said here today, this bill does not get you that money this year. And it also does not create a, this is different from a lot of other special purpose authorities like PARA, like higher ed endowments, like permanent. Funds, I know there's a lot of people talking about the permanent fund in New Mexico that funds child care. These funds have a long-term investment strategy built into them. College Invest has a long-term investment strategy built into it. And so a portion of that money is intended to do that anyway. These enterprises that you're taking this money from do not have that same portion of their investment going in for long-term investments. And so it isn't really a permanent source of funding. Like, you don't have something going into the special purpose authority for child care specifically. It is the residual earnings from other enterprises. And so is that the right structure? Maybe, but we have 12 days to really figure that out and weren't spoken to about it until three weeks ago.

Thank you, Madam Chair, and thank you, Senator Kirkmeyer. Our concern, based upon our understanding and our reading of the bill, the introduced version of the bill, is that what would happen is potentially that money would be taken in part from these enterprises, whether it is portions of the principal, whether it is interest, whether it is anything related to the fee that is going into that enterprise, and that that money would be invested in another fund, and portions of that interest would then be used for another purpose that is not connected to the enterprise as it was existing in statute. That is our potential concern.

Thank you, Madam Chair, and thank you, Senator Kirkmeyer. I mean, I think that the potential of that losing its status is that those enterprises must be used for the purposes that then exist through statute. And if they are then used for another purpose that was initially intended for, then that creates the potential that you're using it for another general purpose. And that is the concern, especially if that brings about potential lawsuits. I think that that is a very large concern of ours, I think especially since there are many interests, I think, as Ms. Forsyth also mentioned in her testimony, that might also bring that up.

I just wanted to go and clarify that this is indeed long-term. This is not a quick turnaround kind of thing. So these are in fact kind of a longer investment So the types of enterprises and special purpose authorities that we would be after would be money that just sitting there being saved And so I just wanted to clarify that. I also wanted to clarify that the way the amendment, and you haven't seen it yet perhaps, but the way the amendment reads is that year two would be the first year that counties would start getting some money for child care. So I just wanted to go on the record about the long-term investment because I want to make sure I'm being really clear. This is something that in the future will be helpful.

Yes, there is about more than $30 billion a year that comes through enterprise funds now, which dwarfs the size of the general fund budget that does have lots of controls on transparency and accountability, and the Joint Budget Committee does a good job on making sure that the decisions that are made are sound and prudent and transparent. Enterprises are a way that we have shifted in Colorado to do fee-for-service government. They are often challenged, enterprises. The paid family and medical leave fund was one that was challenged immediately after it was passed by voters. And as that lawsuit worked its way up to the Supreme Court and was decided by the Supreme Court, there is a requirement that the nexus between everything in the trust fund, including interest, whether it's high or low, goes back to reducing premiums that employers and employees pay, and it also goes into the calculation of the solvency ratio of the fund itself. So to Senator Marchman's point, yes, there are some funds that are going to hold reserves. Many enterprises don't do that. They have a literal fee for service. You pay for my fishing license, and in that year we use your fee to go out and stock lakes and rivers and stuff. But some enterprises, like the paid family and medical leave enterprise, carries a big balance. But it is supposed to do that because it has to be equivalent to cash so that when you need benefits, you don't have to stop paying benefits because people are entitled already. They have paid into it.

And so there are a lot of those funds that are like that that won't be eligible for this. And so we'll give them enough money. Thank you.

Ms. White. For the most part, except for big social insurance programs like unemployment insurance, which is federally restricted. You cannot invest that outside of Treasury bonds. And paid family and medical leave. There may be others but those are the two that I most familiar with Thank you Thank you Senator Benavides I wait Okay Thank you Seeing no further questions for this panel we will move forward

Thank you, Madam Chair and members of the committee. I'm Colorado State Treasurer Dave Young, and I want to first state that I am and the Treasury is in opposition to the bill. Child care is a critical priority. Not arguing that at all. We know it's particularly important for low-income families. We always prefer amendments and compromise to opposition. As a matter of fact, for the first time in my tenure as a Treasurer, I'm opposed to the bill. Typically, we try to work with people to come to a position of compromise so that we can enact good legislation. But this bill would enact a blatant violation of the Colorado Constitution and create a serious risk to public funds. As a fiduciary of state funds, my duty is to manage taxpayer dollars transparently, balancing yield with risk and liquidity to ensure we meet all the state's financial obligations on a daily basis. These standards protected Colorado during COVID-19 and resulted in Colorado avoiding losses during the Great Recession. Senate Bill 26-180 creates an untested, ill-defined investment performance authority. Unlike similar investment boards, this one is exempt from following standard procurement practices. It also exists to invest public funds in volatile high-risk instruments like private equity, real estate investment trusts, which the Colorado Constitution explicitly forbids under Article 11, Section 2. This is not a gray area. This spring, I requested a formal opinion from the Attorney General Weiser on this issue. The opinion confirmed that the state cannot be a direct investor or subscriber in a corporation or company. We can make that opinion available to you. It's available on the Attorney General's website as well. Whether money is invested by Treasury or by a financial institution via a special purpose authority, the funds are still public money. That's clear from the bill's title and the text. Dressing up state money in a different legal structure does not change what it is. It is also true for the public purpose exemption, which has not been tested in the court for this particular constitutional provision. This bill bets public funds on a legal theory without precedent, and coupled with the recent Attorney General's opinion, this is the recipe for a costly and most likely successful legal challenge.

Am I over? Yes. I apologize, Madam Chan, and I conclude by saying I am in opposition and Treasury is in opposition. I hope you will appreciate that position in our support of child care but not this particular bill.

or family. Family was just only recently a program that I relied on after a life-changing medical event. On November 23, 2025, my now-husband Derek suffered an acute and major stroke. We were taking engagement photos in a park near Morrison when he turned to me and smiled, and I immediately knew something was wrong. Half his face was drooped and strange. I turned to our photographer and told her to call 911. Derek was admitted to the hospital and treated in under two hours. I was told later that it was one of the most severe strokes the admitting neurosurgeon had ever seen. That night, I began to navigate the family claims process. process. Within two weeks, I had received my first wage replacement payment from the program. Until I was able to return to work this February, family was our lifeline. As Derek had intensive therapy, I spent that time booking appointments, finding doctors who could help us figure out what had happened, and dealing with health insurance claims. Family allowed me to focus 100% of my energy on his recovery and our family's health. I would have never thought I would need something like family until I did. Prior to the stroke, Derek was an engineering student and an active and adventurous rock climber. His stroke was a complete shock and totally unanticipated for an incredibly healthy 30-year-old. I thank God every day for our strong support network of family, church, and friends, both here in Colorado and across the country, and for the family program, which gave me the time and resources to take care of my husband in the most critical time of his recovery. Please ensure that the family program is protected by opposing this bill, and I thank you for your time.

Hello. Can you hear me okay? We can. Great. Madam Chairman, members of the committee, thank you so much for the opportunity to testify today in opposition to the bill. My name is Fatima Hamid Byrne, and I am a senior staff attorney at A Better Balance, a national legal nonprofit with four regional offices, including one in Colorado. Our organization advocates for working families as they navigate how to maintain financial stability while caring for themselves and their loved ones. For this reason, we recognize the crucial need for affordable child care. However, we are opposed to an investment performance authority funded by enterprise fees as a mechanism for doing so because it risks taking away from the other the purposes behind these enterprise fees and risks putting important priorities against one another. While we appreciate that there is a coming amendment to carve out the family fund so that it is not one of the enterprises put at risk by this bill, the concern remains that this bill risks setting a harmful precedent in framing dedicated enterprise funds as resources for general budget use. These enterprises are carefully crafted, family, for example, with capped premiums and an explicit statutory prohibition on diverting its funds, whether interest earned or funds unspent at the end of the fiscal year. And the family program was chosen by voters to be self-sustaining and affordable, and it's working. Premium contributions were lower for 2026, while program usage and purposes for use expanded. As others have testified the legal risks to defining whether these funds are built by taxes versus fees remain, so I will not go into that. But this approach which could set a harmful precedent in framing dedicated enterprise funds as resources for general budget use. Like Colorado, other states with paid family medical leave programs have taken clear steps in order to prevent funds from being diverted to other uses. National groups are already watching closely as Colorado is setting an example for other states through its expansion of paid leave and its embrace of dedicated NICU leave, the only state to provide it. And this bill risks setting an example of how similar programs could be eroded in the future. Thank you so much for your time.

Thank you. Good afternoon, Chair and members of the committee. My name is Caitlin Altone, and I'm the Associate State Director for 9to5 Colorado. 9 to 5 Colorado's mission is to build a movement to achieve economic justice. Our organization has spent more than a decade advancing paid family and medical leave in Colorado. While SB 180's stated purpose is to address affordable child care, an issue we also deeply support, this bill is a serious threat to the family program, and that is our top concern in our opposition of SB 180. Considering possible amendments, we do remain opposed because requiring a vote is not fully exempting family. We also share in the broader concerns for responsible use of state funds and consequences that have already been addressed. Although the bill allows entities to opt in, the decision could rest with a single agency director who doesn't have public accountability and is also shielded from any liability. The decision-making process for an entity's participation in SB 180 and the use of funds once participating does not protect family funds from being misused. Family is an enterprise. It is a social insurance program funded through payroll contributions from workers and employers solely for the purposes of providing and administering paid family and medical leave. Family was designed intentionally to be self-sufficient and remain solvent long-term, but this bill shields decision makers from liability for investment losses while workers and employers remain exposed to the consequences. The current system for family is working, and there is no clear justification for exposing it to the level of risk proposed in SB 180. Paid family and medical leave and child care are both critically important, but these needs should not be pitted against each other or come at the expense of a solvent, voter-approved program. 9 to 5 supports structural change that addresses the root causes of economic injustices and equitably advances the needs of working people. SB 180 does not do this. We urge a no vote. Thank you.

representing the people of the state? Ms. Altum. Thank you for the question. I'm sorry, and your question for the board, are you... The board, let's start with the board. Are the board members elected by the people of the state that oversee these enterprises? No, in my experience, you know, working on family and through the implementation of it, these are hired positions not elected positions for the operation of family, for example, as a state program.

Treasurer Young. Thank you, Madam Chair. Senator Snyder, I think I would defer back to the bill sponsors on that. I will correct the record to some extent. You know, the T-pool book value is at 3.5%, but actual total return performance is 5.7%. So there's probably a smaller delta there than what people are counting on as far as this is concerned. but I'm still not I'm a little bit more focused on the constitutionality of even doing this in the first place so the details of the mechanism is not something that I paid a huge amount of attention to which is why I would defer back to the bill sponsors on that.

I would also defer back to the bill sponsors.

Yeah, so as the bill sponsor specifically says in the bill that we will return the T pool rate of interest plus 75 basis points. So the enterprise will actually earn more than it would get with the Treasury. Thank you.

Thank you, Madam Chair and Senator Benavides. Good to see you in this position. I will tell you that when you talk about strictly the tea pool money, the answer is no, because I believe it's very clear in the Constitution that you cannot invest in a single company or in any subscription. That's actually written right into the language of the state constitution from its inception 150 years ago. And most of these types of investments that you're talking about, private equity, REITs, these sort of things are all done by subscription. That said, 10 years ago, before I was treasurer, before I was even thinking of being treasurer, I ran a bill along with others to look at a different part of the funding, and this would be what we fondly call the permanent fund but is actually the public school fund. And we actually created a, because they aren't under the same set of restrictions, we did diversify the portfolio. We still have about 50% of the portfolio for the public school fund in the T pool under those restrictions. But we moved about incrementally about 50% of that to higher earning investments, still not in a single company, but for example, in an exchange traded fund. That portion of the T pool, I'm sorry, not of the T pool, but of the public school fund is earning pretty high rate collectively. it's about 11.7% overall. So we've been able to diversify the portfolio with a different set of public funds that weren't impacted by the constitutional restrictions in order to be able to achieve a higher return. But this bill is really targeting funds that are inside the T pool and we are restricted Again I made reference to the fact that the special purposes provision that in there has not been court tested yet So I can't verify that anybody would test it in court, but if it is tested, it would tie up this kind of a process in the court system for a number of years before it was resolved.

Thank you, Madam Chair. To the Treasurer, thank you for describing the T pool and describing what you're doing with the diversified investments that you do have. And what always concerns me is when I hear from the lobbyist or someone saying, well, what they're currently getting is 2%. Could we be getting 6%, 8% or Paris getting 11? That's good to say, but you can't do an apples-to-apples comparison unless you're taking a look at what the asset allocation is. And the asset allocation is if you're 40% in equities and 60% in bonds, and you're trying to compare it to something that is 80% equities, you're going to have a lower return in an up market. That's a fact. So I don't like hearing those comparisons, knowing that what you're currently doing is pretty moderate to moderate conservative. What I do have a question about is the legality of this when you said we can't invest in individual companies, and that's part of the definition that I brought up before of a security. If we narrowed that security just to say exchange-traded funds and Treasury bills, that's what I'm wondering because we've opened it up to private equity, the full definition that's in the CRS, I think, of what a security is. Can you comment on that, on the legality?

Thank you, Madam Chair. Well, I, again, relied on the Attorney General's office to actually give us clarity here. And I will say that, you know, there's always, you know, differing legal opinions. Certainly, we heard reference to the fact that there may be a different legal opinion out there that we haven't seen. But we have to go with what we read in the Constitution, supported by what the Attorney General is telling us through their opinion. We certainly are open to innovative ideas. I mean, at the end of the day, if people are going to be asked to go back to the voters, if legislature wants to go back to the voters and they want to amend the Constitution to open up the range of investments that the Treasury can invest in, that's certainly permissible. I mean, you can refer anything as a constitutional amendment and put it to the voters to decide if they want to have a higher risk and a higher return on their investments. But the plain reading of the Constitution to us tells us that we can't do that with the T pool investments.

Yep, thank you. But you had mentioned that you were currently invested. What was the name of the fund that was 40, 50, 50? What was the name of that fund?

Thank you, Madam Chair. Sorry, I was going to give you a demotion. I was going to give you a demotion calling you a senator. I'm not going to say that in front of the committee. So, Senator Kolker, yes, we had exchange-traded funds, ETFs, that we are investing in. They are a basket of securities, not a single one, that based on where the language of the public school fund exists in the Constitution, and also in statute gave us the latitude to invest that way. They basically are tracking the S&P so that we are certainly getting the kind of return that anybody that would invest in any other ETF that does the same thing in the market will get. But, you know, I think you made a very cogent point, and that is that you can't point to one year return on any investment fund. Take a look at PERA. There has been times where they've had high returns, but there's been also times during the recession where they were as low as 13% loss. Still beating the market benchmarks. They were exceeding the market benchmarks, but they were still at a heavy loss position. They're a long-term investor, so over a long period of time, the expected rate of return is 7.25%. As a trustee of PARA, and I'm not the spokesperson of PARA, but I sit on the board, we have a lot of work that we do to establish that expected rate of return, do the asset allocation study so that we can really make sure that our investment portfolio mirrors the kind of return over the long period of time that we want to get for the beneficiaries, the active employees, and the retirees of PARA.

Thank you, Madam Chair. And for Treasurer Young, your opinion from the Attorney General dated April 13th. At the very end, there's a footnote number two, and it talks about the public purpose exception. And I apologize if this was covered when I was presenting another bill. But apparently the exception applies to other prohibitions contained in Article 11, Section 2. but apparently there's never been any court decision concerning the actual anti-ownership provisions. When you talk about litigation, is that something you would expect to be immediately litigated or immediately filed with the intent to litigate whether this is constitutional or not?

Thank you, Madam Chair. Senator Snyder, I can't speculate on who might do that, But I think the enormity of this particular issue, how we invest state money would likely draw a challenge, and I think probably successfully so, but that's my opinion. Again, it's not been tested in court, but I would anticipate that it would draw a challenge. And again, if we're trying to get a system that will return money for childcare here in the state of Colorado and solve a problem immediately, tying something up in court under untested legal basis is not a way to produce outcomes immediately that we want to have.

I do. Senator Young, or excuse me, again, I'm also offending you there. Treasurer Young, you are currently overseeing the investment, which is kind of what this bill wants to do. You have your own objectives, your own board, your own investment council on that. They trying to recreate that here and then have a 1 fee or less why wouldn we just do that in the Treasury I mean based on what you doing what your fee

Are you contracting out, et cetera, et cetera?

Madam Chair, Senator Kohlberg, yes. We actually have a structure. I chair the public school fund investment board. We actually have investment professionals that are appointed to that particular board. We have, we've gone through a very transparent and open procurement process where we selected an investment advisor and fund managers for that. They're constantly reviewed. Recently with action by the legislature a year ago in a different bill, we actually added additional investment goals for the public school fund investment board to entertain. So we're in the process of going through yet more RFI and RFP processes to select additional fund managers and consultants to help us with that particular new investment goal. So we're geared up to do that kind of work as long as the provisions in constitution and statute allow us to do that. But we are not going to engage in a whole process that doesn't have strong legal underpinnings.

Good afternoon, Madam Chair and Committee. My name is Sarah Dawson, and I am the Director of CCAP, the Colorado Child Care Assistance Program. at the Department of Early Childhood. On behalf of the department, I am here testifying in an amend position for Senate Bill 26-180. CDC is in strong support of the bill's intent to generate vital child care funding for low-income families. Across the state, families earning low income face mounting challenges to securing child care due in large part to the constraints of the state's child care assistance program. Currently, nearly 9,500 families are unable to enroll in CCAP due to program wait lists and freezes. This creates a crisis for family stability, economic well-being. Parents struggle to maintain employment, and children may be placed in less than ideal care situations so that their parents can work. Amidst funding gaps at the federal and state level, this bill creates an additional state investment in low-income child care to help families access safe and reliable care. To ensure success, CDC is requesting amendments to guarantee that the funding is dispersed by the Investment Performance Authority, is handled with equity and accountability, and that each county that receives funds is able to report on those expenditures. We believe the amendments that will be introduced today address these requests, and if adopted, CDC will strongly support the bill. Thank you for your time, and I'm happy to answer any questions.

Good afternoon Madam Chair and committee members My name is Louise Meyerland I Vice President of Programs at the Women Foundation of Colorado here to request amendments to Senate Bill 180 The Women's Foundation is the only statewide community-funded foundation protecting progress and expanding economic opportunity for all Colorado women. For decades, we have advocated for child care funding that ensures families' access to high-quality, affordable care and that improves pay and job quality for the child care workforce. This is essential for working families. Similarly, WFCO's support for paid family and medical leave insurance has been unwavering. We supported the establishment and implementation of our state's paid leave program because women should never have to choose between caring for their families and working to provide for them. Women lose when our state has to choose between investing in child care or ensuring the stability of the voter-approved paid family leave program that has provided job-protected time away from work for hundreds of thousands of Coloradans who then return. That is why we are urging amendments to SB 180. Any diversion of family funds, as you heard earlier, creates potential legal risks. And as much as the Women's Foundation wants to increase child care funding, and we really appreciate creative, lawful approaches to establish new funding, we cannot advocate for a policy that threatens other resources women and families depend on. We appreciate the sponsors and our partners' work to both strengthen child care and maintain the strength of the family program. We hope this committee will do the same. We understand you'll be considering amendments that could add protection for family and urge you to prioritize this pursuit.

Ms. McHenry, please, you have two minutes. Thank you, Chair Kipp, and hello, members of the committee. My name is Kathleen McHenry, and I am here today on behalf of the Early Care and Education Consortium, a nationwide trade association of high-quality, multi-site, multi-state child care providers who operate more than 200 locations across Colorado, serving more than 31,000 children every single day. We are very excited about the potential of this bill to support greater access to child care for for families across Colorado and appreciate the sponsors working so hard to put this proposal together. With thousands of children on the wait list for child care assistance, there is an immediate and critical need to identify more resources to support Colorado's working families and economy. We do have a few questions around the specifics of the legislation and allocations, so we are testifying in an amend position today. First, we have some questions about how counties would spend such funding. We suggest further clarifying how counties may do so, such as specifying that they should support low-income families with young children under age five, enabling them to access child care in the setting of their choice, in line with the intent that Senator Bright laid out. We also recommend adding guardrails to ensure that counties do not implement rules more restrictive than those that exist in CCAP already. These language clarifications would ensure consistency and fairness across the state and prevent any unnecessary barriers for families and providers. Second, reporting and transparency are critical to the success of this investment. We support an amendment that would strengthen county reporting about the use of their funding and the extent to which their funds support family access to child care. Finally, with respect to board membership, we believe it is important that the body responsible for stewarding this critical source of funding reflects a broad and balanced representation of the child care field, by adding the Colorado Department of Early Childhood Education to the board. We been in touch with the sponsors about these amendments and appreciate their willingness to work with us on them Again we so grateful to the sponsors for working so diligently on this bill and I would be happy to answer any questions

Senator Kolker. Thank you, Madam Chair. Ms. Dawson, thank you for being here. I got a question in regards to one of the things you said in your testimony. You said there are funding gaps in CCAP right now, federal and state.

Ms. Dawson.

Senator Kolker.

Just a follow-up on that. How much is received from the state?

Senator Kolker. And what's the total need with what we receive?

Okay. Thank you.

And you're saying $127 million. And the state's general fund contribution is how much?

Thank you. Further questions for this panel? Senator Kirkmeyer.

And maybe you could also tell us what percentage of children that are eligible are actually being served.

Of course, last state fiscal year, we were only able to serve 11% of the fiscally eligible population in CCAP.

11.

We have Dr. Mathangi Subronarni.

Oh, it's all good. Thank you. Thank you, Madam Chair. My name is Dr. Mothlingi-Supermanian, and I'm the Director of Early Childhood Policy at the Children's Campaign. The Colorado Children's Campaign is a nonpartisan policy organization committed to making Colorado the best place to be a kid and raise a kid. Our focus is the whole child. which is why we support this bill.

and their willingness to find solutions to a pressing issue in uncertain times. This bill creates the Investment Performance Authority, a new fund that directs the earnings from investments of public money from eligible entities to child care assistance for low-income families. Governed by experts in finance, child care, and state government, it has the capacity to grow Colorado's first dedicated state-level funding stream for child care over time. Participation is opt-in, which protects existing state financial structures, avoids new mandates during a difficult budget year, and gives the authority time to prove its value before expanding. In short, it is built to last, which for child care is essential, because here in Colorado, child care is unaffordable and unavailable. In 2023, Colorado was ranked the fourth most expensive state in the nation for child care, and over half of Coloradans live in child care deserts where there are more children than licensed care seats. This hurts children and families. Research shows that high quality early childhood interventions lead to higher graduation rates, better mental health outcomes, and lower incarceration rates. Parents who have child care are more likely to excel professionally and less likely to be charged with child abuse and neglect. And that's why getting this child care fund started now, even in a limited form, is essential. Long-term funds take years to grow to meaningful scale, and every year we delay is a year of lost economic contributions, lost provider growth, and lost ability for working families. Starting the fund today means that we'll be ready to make a real difference when Colorado needs it most. Colorado is a leader in the early childhood space. Let's continue our leadership by treating child care as infrastructure. Thank you, and I look forward to your questions.

Thank you. My name is Ethan Hemming, CEO for Warren Village. I'm grateful to be here. Thank you to the committee for holding this hearing. Warren Village is a mission-based organization in Denver with three locations. We provide services to single parents who are transitioning from homelessness to greater self-sufficiency. We provide affordable housing. On any given night in Denver, we serve 191 families. Throughout the course of the year, we serve 600 to 800 individuals, moms, dads, or kiddos. Our model is really straightforward. Affordable housing, workforce development, education for the parents. And at the foundation of that model is our early learning centers. So we provide two centers in different locations in Denver, serving up to 200 kiddos at any one time when fully enrolled. 85 to 95 percent of those kids are at risk and low income. Those children and those families rely on low-income child care assistance to thrive. It is the heart of our model. It is a safe environment. It is an educational environment. The investments that we make in those children pay off in the moment, and they pay off in the next 5, 10, and 20 years. It is critical that we have those services. Over the last 15 months, our organization, again, serving at two centers, have had 40 families affected adversely by the recession of low-income child care assistance. We have lost over $380,000 in revenue to our organization in just that year. That problem is compounding over the next year. It will only increase over that point. If a solution is not found, this is an existential crisis for our two learning centers as well as learning centers throughout Colorado who will affect negatively the most vulnerable in our society, our children. We are here as a nonprofit, but we're a business. The revenue that we get from low-income child care assistance is part of our revenue stream. It is essential that we have support to continue or we will close. I would love to close with a quote from Chelsea. Chelsea is a low-income, very low-income single mom. She is a recovering addict. She is a parent to three young children and she lost her husband in November of 24 She lives at our Gilpin Apartments She is in job training education training and she maintaining her sobriety Her quote to me was with the Warren Village Early Learning Center I am watching my children become kids again I am seeing them grieving the loss of their dad. I see them getting to focus on learning again. The light is coming back into their eyes, and I would not be able to build stability and a future for them if I didn't have an early learning center and the support and assistance that I so dearly need. I would say as a human being, we need that support. Thank you.

Thank you, Madam Chair, members of the committee. My name is Christina Walker. I'm the Senior Director of Policy at Healthier Colorado, a nonprofit organization dedicated to providing every Coloradan with the opportunity to live a healthy life. Thank you for the opportunity to speak in support of Senate Bill 180. This bill uses a special purpose authority to generate new revenue through investment returns to help ensure Colorado families can access the high-quality child care they deserve. Notably, this bill will create the state's first and only permanent fund for child care assistance for low-income families that is not tied to an existing federal program. Colorado needs a stable, affordable system of child care in every corner of the state to support our local businesses and sustain a thriving economy. Right now, because of the freezes and wait lists that are impacting our state's CCAP program, many child care providers are struggling to keep their doors open, even with rising demand. More parents would have the opportunity to work, advance their careers, and help build our economy if they could rely on the continuity of affordable child care. By increasing investments for child care assistance, we could create communities across the state where child care is never a barrier for working parents. Healthier Colorado has conducted both qualitative and quantitative research over the past several years, and routinely we have found that when parents do not have access to affordable child care, families suffer. Parents have reported that they have been forced to dip into retirement savings, go into debt, leave their jobs, use paid or unpaid leave from work, or cut work hours. Child care assistance is a proven economic tool that supports families' abilities to gain economic stability. An investment in child care is also an investment in our state's future workforce.

Good afternoon, Madam Chair and members of the committee. My name is Kate Horley. I'm the CEO for the Center for Work, Education, and Employment. We serve 1,200 very, very low-income families every year and about 4,000 children as a part of that. I'm not going to tell you what this bill does because I feel like you've heard that a lot today. But I am going to talk about the reality of what child care means for families experiencing hunger, homelessness, poverty, and often violence. Fifty percent of the people that we serve at CWI are single moms who are experiencing violence currently or have escaped violence. Currently, I really want to hammer this home. Child care in 20 of Colorado's largest counties, the child care assistance program is frozen. It is not likely to be reestablished for new families for three to five years. These dollars would come in before this current program is unfrozen. That's a critical piece of information to understand. Additionally for years counties have had to borrow from their TANF reserves and their CCAP reserves to make up the difference between programs That is not a sustainable way to manage those programs and it means that we don have fidelity to either TANF or CCAT In addition, I want to talk a little bit about what it means to be a parent or a family who doesn't have access to child care who is on federal benefits. You cannot go to work if you do not have child care, and I want you all to think about what that meant for your own families. if you would have gone to work if you didn't have a safe place for your kiddos to go. We have families today who are going back to their abusers, women who are going back to their abusers because they have no access to child care, their TANF is running out. I recognize this program is risky. I understand it is very different than anything Colorado has ever done. And I think what this group of people and what the families, the very low-income families of Colorado are asking you to do is to be brave. to think a little bit bigger and to think a little bit different than we have about the way we've invested Colorado's dollars, and instead really think about what it means to invest in Colorado's children. In addition...

Oh, I'll be quick. In addition, when you fund child care, you are creating access for families to move out of benefit programs. So think about that cost trade-off as well. Families won't stay on those programs as long.

More just a comment. Thank you all for coming in. We all understand the need. We understand the importance of the need, and I think we all here agree with that. It's how do we go about funding that need? Can we do it legally without putting at risk other assets that are also funding other needs? And so a vote against this bill, I'm speaking for myself, is not a vote against your need. It's a vote against how we're doing it and what risk we're taking to do it. And so I just want to say it's absolutely imperative that we fill this need, but we make sure that we do it without putting at risk, ruining funding for other needs and this need in general, because there might be another way to do this, maybe a little bit more effectively with less risk. So I thank you for your time.

Thank you, Madam Chair, members of the committee. Mark Farandino, Director of the Office of State Planning and Budgeting. I'm here in support on behalf of the governor of this legislation. Appreciate Senator Bright, Senator Marchman for their work on this. For a long time, the governor has been very clear of trying to figure out how we get a higher return on money we're just sitting on right now, especially in a place where, depending on how we do it and what we're doing, those monies could just be counted towards TABOR revenue and push out money and actually not get the benefit of any higher return. As Senator Kirkmeyer talked about earlier with the proposal she had last year around Prop 130 and how that with para this builds on that type of work to try and look at new opportunities to be able to invest our dollars in a better way to get better investment to pay for things we know that are important within the state. I think a few key components of this that are important. One, what we are doing here in this bill is setting up that structure, setting up the structure and the framework to allow enterprises which are outside of the Tabor District to invest these dollars into, through the special purpose authority, their investment, they would get their same investment from the T pool that they would, plus some, as you've heard. So for them, each of them will make their decision on if this is the right thing for them to do, whether they have a board, whether they have a director, those decisions will happen through those individuals making that decision. And then they will get that investment plus whatever is the agreement above the tea pool, and then anything above that, which would not have happened other than this special purpose authority, would go to be able to fund child care, which we all know, as everyone said, is an important need. This is one way we see we can fund this in a way that provides sustainability and makes smarter investment decisions. Thank you very much.

I'm sorry. Hello, my name is Lisa Stephen. I'm the founder and executive director of Hope House Colorado, and I am here in support of this bill and respectfully urge you to support it as well. It is a creative solution to an absolutely critical problem. While every speaker has stated their support for child care assistance, respectfully, this is the only bill to come forward with an actual solution. This bill is about using existing public dollars more effectively. We are asking the state to make what it already has work harder for families. These families include the 300 teen moms we serve at Hope House Colorado. Our mission is to empower parenting teenage moms to become self-sufficient. This is only possible if our moms have access to quality child care. 100% of our teen moms are eligible for CCAP. In October of 2024, Hope House opened a beautiful licensed early learning center serving 100 of the children of our teen moms. In March 2025, all major counties enacted a CCAP freeze. This caused a dual issue for Hope House. With only 50 of our children enrolled and none of our new moms able to access CCAP and a financial performa based on 100% CCAP spots, we are currently losing over $450,000 annually. In addition, we cannot meet our mission if our new moms cannot access CCAP. Moms like Rosario, who grew up in poverty and became pregnant at 18. She came to Hope House desperate to build a self-sufficient life for her baby girl. Because we were able to help her get a spot in our center, Rosario was able to earn a four-year degree, something only 2% of teen moms nationally are able to do. Today, she has a full-time job as a project manager in construction. I am urging the committee to support this bill so that teen moms, the 200 teen moms just like Rosario, that we still want to serve this year can reach their dreams and build stable lives for their children, which, by the way, saves our state about $47,000 a year in benefits that they would have been eligible for if they did not become self-sufficient. We urge your support of this bill on behalf of our little ones. Thank you very much.

Thank you, Madam Chair. I always have questions for this panel, for this person. It's just, you know, earlier we heard that there was fear about losing enterprise status. And what I heard from you is, and I heard from the sponsors, we're setting up a structure outside of Tabor. They're going to still receive their same interest, plus they may receive more, but they're going to still receive their interest. So it would still be being used for the related purpose that the fee was set up for the enterprise, correct? I mean, you're not concerned about enterprise losing status, correct?

Thank you, Madam Chair.

Senator Kirkmeyer. Last question. And with regard to TABOR, you don't see any TABOR impacts, do you? Because special purpose authorities are not the state. Director Ferrandino.

Other questions for this panel? Senator Kolker.

Director Ferrandino. Thank you, Madam Chair, Senator Kolker. So the revenue that is generated, one, the enterprise itself is not in the Tabor District, and then the special purpose authority, the money generated through the investments and returns is not part of the Tabor District, of the state's Tabor District.

May I dialogue?

I mean, we have people with other questions, but go ahead.

The push out towards taper revenue here is that, you know, we're trying to get this money to fund these programs because we can't raise it through the state. Right? I mean, is that kind of the idea? Is that we can't raise it anywhere else because it's $30 million that we're currently doing general fund. Why would we not just put this back into the general fund and then make this more flexible?

Does that make sense?

Last question. Why not go to PARA and have them manage it and not have to reinvent the wheel here?

Senator Snyder. Thank you, Madam Chair and Mr. Ferrandino. Since I've been listening in this whole time, There's this assumption that private equity and other investment entities are going to make a much bigger return than we're currently getting. But there's no guarantee of that, right? I mean, I personally think the equities market is highly overvalued and is due for a big correction. And then I have a second question on the legality of it.

Thank you, Madam Chair.

Thank you.

Follow-up very quick. So you mentioned you felt comfortable, you have a legal opinion, I believe, from the Attorney General's office saying that this whole plan passes muster, I guess. There's word that you've gotten an opinion from the Attorney General. I know that's privileged. Are you basing your legal analysis on that memo?

Thank you, Madam Chair.

Senator Benavidez. I think we've gone back and forth, and there's risks in this, but there's some long-term benefit in it as well. But my question is, because I'm hearing also from people about CCAP, and that child care assistance program. My question to you as head of OSPB is, how does CCAP look right now? Do we have enough funding? Because the funding is not going to come from this next year or the year after that, because I think there's this reliance that this is going to make more money for us to keep this alive. And I see this as no money is coming to these programs right away. And if we lose funding, the budget is still faced. Do we use general fund or some other fund? But this is not any kind of immediate answer. So what's the status of CCAP funding now?

Thank you, Madam Chair, Senator Benavidez.

Senator Benavidez.

And I was getting to all that, but my specific question to you is for next year's budget, what will we need to fill whether it general fund or something else maybe the year after that This won be the answer which I agree with So what are we looking at as deficits in that program

Thank you, Madam Chair.

Director Ferrandino, can you tell me why if you guys have a legal memo from the Attorney General's office that theoretically says something different than what's in the memo we all got, why you guys won't release it? Because frankly, I asked the AG's office and they said you can release it if you decide to. And so if you have a memo that proves your point, why won't you release it? You just have to give them a heads up. What? They said you just have to give them a heads up that you're releasing it. I always appreciate that from the AG's office.

Thank you. That does answer my question quite nicely. Thank you. Okay, do we have any further questions for this panel? Seeing none, thank you so much for being here to testify. We really, really appreciate that. And that brings us to the end of our testimony phase. Let's bring our sponsors back up for amendments. Okay. I think we have an amendment packet from this, and I believe these are sponsor amendments. So I am going to let you walk us through them.

That's a proper motion. Tell us about L1.

Thank you. Is there any objection to L01 or any questions or comments?

Well, thank you, Madam Chair. On the face, it means exactly a professional financial role. that could be at the interpretation of the governor. Okay.

Next amendment, Senator Wright. Thank you, Madam Chair. I move amendment L-03 to Senate Bill 180.

Thank you, Madam Chair. L-03 further defines the term earnings and prescribes how the entity reports to CDEC on its disbursements. Thank you.

Next amendment, Senator Bright. Thank you, Madam Chair. I move L04 to Senate Bill 180.

Thank you, Madam Chair. L04 pushes to voters the decision for a voter-initiated enterprise Enterprise to participate in this.

Senator Benavides. Yeah, I have an objection to four. I don't think it's at all clear that it actually takes family or 988 out of this. It seems to infer that they need to go back to the ballot to do this, and I'm not sure the rest of the bill really addresses that. So I don't think it's at all clear.

Senator Marchman. I appreciate that. That was my mistake. I did it and no one likes the language either I was trying to make good on a promise that I made to carve out family and so that's what this is intended to do and for that reason I would ask that you support this to get it on because if this moves without the amendment

No.

Yes.

Aye.

Aye.

Aye.

Yes.

Aye.

Aye.

Madam Chair.

Thank you, Madam Chair. I move L06 to Senate Bill 180.

Thank you, Madam Chair. L06 just simply adjusts the retainage percentage.

Yeah, thank you, Madam Chair. If you take a look at what T-Pool is currently returning right now as a yield, it's in that range. So that's why we pegged 5% as a reserve. Thank you.

Thank you. Can you just tell me, I'm trying to get my head around the 175%, 50%, why was this needed instead of just saying a 5% reserve?

Thank you, Madam Chair. The reason why we said that is because we wanted to have the Special Purpose Authority fund the reserve first, and then fund child care next after the reserve had been built, but we wanted to prescribe that child care would be getting something in that second year, assuming that we hadn't yet reached the 5%.

So is this a reserve for the total funds, but are you offering accounts for every enterprise?

Because every enterprise would have to have a reserve, I would think, so that if they needed the money back.

So the intent is that the 5% reserve is on the total amount that's held so that it can be shifted to honor the T pool. Thank you.

Senator Marchman. Thank you. I appreciate all of the testimony. I appreciate all the questions. I'm sorry this has been a tough bill for folks. I do want to read. There were a few things that the GOVs team put together from the super secret memo. that I'd like to read out loud and put into the record. This says, didn't the AG's rule, didn't the Attorney General rule that this was illegal just a few weeks ago? And it says, A.G. Weiser did release a short memo indicating his opinion that Article 11, Section 2 prohibits the state from directly owning stocks. However, in that same memo, he did acknowledge this was subject to recognized exceptions and required fact-specific analysis. In addition, the memo said nothing about enterprises or special purpose authorities, which are semi-independent from the state. if the recent AG memo is to be read as broadly as it's being read in this committee, then this would impact higher ed institutions, CHFA, Denver Health, U.S. Health, College Invest, and many other state-affiliated entities that are already investing in this way. I will share this with you guys. I don't know that there's anything else exciting about it, But I do want to just acknowledge that I do respect that people are concerned about the riskiness of this. I also want to respect the fact that sometimes we have to take risks to be able to get what we need. The public purpose is child care for low families The vehicle that we chosen is this a bit more risky authority I appreciate you guys listening to us today I appreciate all the testimony, and I hope to earn an aye vote today. Thank you.

Senator Bright. Thank you, Madam Chair, and thank you for the members for listening to this presentation. Thank you so much for the testimony that we've had today. We all understand that child care is a critical need in our state. We understand that CCAP is underfunded. It's not necessarily been prioritized. I would note that we haven't seen legislation this session that has come through and has actually addressed this as we've heard in testimony. And so I'm happy to offer this as a bill. If there were other bills out there that addressed this, then we'd have some choices about some avenues to go about doing this. And thank you for my co-prime for stepping onto this with me and highlighting this need as well. Some things that I'd like to mention and remind folks is that participation in this on the part of the enterprise is voluntary, not mandatory, and that they can participate in part and don't necessarily have to participate in full. The bill was drafted in consult with attorneys who were looking at the state constitution at the time. The AG's memo, as mentioned, discussed the exceptions that have existed for decades, and Senate Bill 180 supports a valid public purpose that would fall under the exemption. The amendments work on addressing concerns and simply swaps the current investment manager, i.e., the treasurer, with a new one that the treasurer sits on. The extra earnings will actually help lower the fees to be charged by the enterprises that choose to participate because they will be essentially receiving a higher rate of return on their investments. And if we had, again, several bills to choose from, we could choose from those. This is our effort at achieving this. And while we stakeholder-ed many different ideas and we came to the table with this idea, and apologize for a late introduction on this. We do have several steps through the legislative process, and we can continue to address concerns as we move forward. So I would encourage an aye vote, and thank you all for hearing this today.

Thank you, Madam Chair. I'll try and be very brief, or at least brief. it took me three years almost three years to get my idea through with regard to using our reserves and going to get a better return on it and i said earlier what it was i mean and literally i went through all the same processes that you are going through right now and that you're talking through and the treasury you know we get 5.7 percent interest para got 11 percent that's how we funded Prop 130, the $350 million liability on our budget in the last year. That's how we did it. And so I guess I just don't see where the risk is in this. We're not using the principle. We're using the interest off of the principle. So therefore, it's not going to lose its enterprise status. They still get to do what they were going to do. The enterprise gets to make that decision, and there is no taper impact here because a special purpose authority is not part of state government. It's its own subdivision, just like PARA, just like the higher education institutions, just like CHAPA. So I think, thank you for trying to come up with something that creative because it is not just that we are only funding somewhere between 10 and 11 percent of the kids eligible for CCAP That is dropping folks down to like 6 percent And because of the things and the changes that this body has made over the years to our TANF program it's impacted what we can fund over in child care. And if those folks can't get child care, they can't go to work, we don't meet our work participation rates, and it starts causing us a whole bunch of other problems. So I appreciate the fact that you were creatively thinking. I know we talked about this several different times, so thank you very much, and I'm a yes vote.

Senator Colker. Thank you, Madam Chair. And I'm a yes vote on funding CCAP. Absolutely. But it seems we find ways to get around this thing called TABOR, right, because we can't fund it directly from general fund. We can't fund it from the pooled assets we receive from everyone in this state, where we're all participating in reducing the problems of the state. We're all taking a share of that. The money that I hear and when I hear people talk about rates of return, and I hear people talk about risk, I just cringe, cringe, cringe, cringe, as if this is going to be guaranteed, that we're going to guarantee this. Para did earn more than the Treasury because their risk is 85-15. Treasury is 40-60, 45-55. Your risk level is lower, so your return is lower. We are fiduciaries of the people's trust and of the people's money, and there's ways to take calculated risk. This bill is not narrow enough to calculate that risk. It's too broad. Para could actually do this. The governor's office was in conversations with them, but they wanted them to do it by reducing what the state was paying into para for that $225 a year. So PERA could do this, and I suggest the sponsors bypass the governor's office and look at this so we're not reinventing the wheel and doing extra costs. But I want everyone to remember this is not risk-free, and we're only risking the interest. Well, we are risking principal if the value goes down, and there's a need for that principal. and 5% reserve. Well, I don't even know if you need a reserve on that, I guess. What I've been hearing is the enterprise is only going to send money they don't need. So why would you need a reserve? If they don't need it, the reserve is already done in the enterprise. So there's just too many openings here for me, too many ways that this could weaken what we do, and too many ways that we could have fraud and abuse in this. So that's why I'm a no vote.

Thank you, and I want to thank the sponsors. This is a creative way to get to this. But this is more of a long-term way to get to this. This doesn't address the problem at hand. And I think after talking to others about this and people that approached me about this. They're thinking that this is risk-free, that it's something overnight once this is set up, and it really isn't going to be. And I'm not sure that the way our child care system is set up, whether in this state or in other states, that it's really sustainable. The cost of it, even with some form of assistance, is really tough, that we have to be looking at the bigger thing. And I think from what I heard from witnesses, I probably disagree, and I need to look into it more, about the risk that these enterprises that invest money, if it does in fact risk their enterprise status by doing this or not. What I heard from at least one witness was that the language that was setting up the particular enterprise, enterprise that it could be some or all of the funds that they have in there, which would include interest, has to be for a specific purpose. If this is not considered within that specific purpose, that does put that enterprise at risk at some point. But I guess, you know, we're the ones that would take the enterprise status, so we'd have to figure that out if we did it. The other issue is I heard a couple of people, the head of OSPB talk about where they looked at other entities that... Seriously?

Thank you all. And I'm trying to remember where I stopped. I said about the enterprise, potentially their dollars could be at risk because on page 15 of the bill, it talks about they can put some or all of their money, not just limited interest, into this. So there are some risks associated with this for them, and I don't know how extensive that is. I was glad to hear from, I think it was the treasurer and somebody else, OSPB, had, that they had looked at other ways. I think he said there were discussions with Para, but they had talked about College Invest and other colleges as far as models to invest. And even if we wanted to change the Constitution for his office to invest, at least a portion of it, there would be a means to do that as well. I am thankful, though, to the bill's sponsors and the proponents sitting out there, as I understand there's going to be another amendment because I was concerned of how this was set up as far as how it would operate on the investment side and any controls put in for those monies and all of those things and I'm told they looked at the para model and there will be another amendment. But for right now, for all of those reasons, I'm not going to be able to support the bill. But with other things, I could change. But right now, I'm a no.

Thank you, Madam Chair. And I really appreciate the effort. I appreciate thinking outside the box, looking for different avenues to address our fiscal crisis. And we're hearing real time who it's hurting and how badly it's hurting people. I just fundamentally believe that enterprises should be left alone and they should be operated as they were intended. And if they realize interest gains or investment gains or whatever, it should be either plowed back into the enterprise or, in the case of family, use the lower fees on people. So I appreciate it. I think there's some meat on this bone, but I'm not going to be able to vote yes today. Thank you.

Senator Marchman. Thank you, Madam Chair. I move Senate Bill 180 as amended to appropriations.

No.

Giselle.

Mrs. Meyer.

Colker.

Mullica.

Snyder.

Marchman.

Madam Chair. No. With a vote of five to four, this is on its way to appropriations. okay thank you very much and that brings us to our second bill of the day SB 26 178 Okay. Okay. We are on to Senate Bill 178. Who would like to go first?

members of the committee. My co-prime has explained to you the proposed funding mechanism of SB 178 and the amendment we will be bringing. However, I want to focus on what will happen if we do not pass this bill. Because we passed legislation in a special session last year, we were able to maintain 20 percent, we were able to maintain the 20 percent impact from the reinsurance program, keeping 6,700 people on the Omni Salute program and help thousands of low-income Coloradans through the premium assistance program. But if we do not pass this bill there will be a drastic cut to all three of these programs The impact on reinsurance translates into an average of annual increase in premiums for individuals with incomes below the 400 of the federal poverty level A family of four with an income above 400% of the FPL will see an increase of over $2,000 a year. In my district, in Arapahoe County, a family of four will have to pay on average almost $1,700 more in annual premiums. And at least 22,000 people will lose coverage completely. Right now, the premium assistance program for low-income Coloradans is $80 for the first family member and only $29 for the other family members. Without this bill, if we do not pass this bill, that assistance will be reduced substantially to $10 and $4, respectively. That's an 80% to 90% cut in the program, and that means loss of coverage for almost 20,000 Coloradans. Finally, we have already cut the Omni-Salud program almost in half, from 12,000 in 2025 to 67 in 2026. And now, if we don't pass this bill, that program will be cut almost in half again to 3,900 people. The bill contains a requirement that the HIAE undertake a steady amount restructuring the HIAE programs to increase affordability and maximize enrollment. That analysis can help us figure out a long-term plan for these programs. I want to thank the committee members and, of course, our stakeholders for considering this bill and hope that you will vote yes to keep these people covered. I'm confident questions that you may have about this funding mechanism, the commissioner along with many others who will be testifying today, will be happy to answer any and all of your questions. With that, I ask for an aye vote. Thank you. Questions for our sponsors?

Thank you. Thank you, Madam Chair. So I'm just curious, why isn't there a, as you're trying to look for ways to fix this issue, why isn't there an insurance premium on Omni Salud? Is that zero?

Thank you, Madam Chair, and thank you, Senator Kirkmeyer. Yeah, you know, those conversations have come up, and I assume you're talking about co-pays with Omni Salud. I don't know premium. And so I think really what we're looking at right now is how do we get the dollars into the system that can keep the levels of service at what they were in 2026. You know, over the summer, we worked really hard to figure out what that long-term solution was going to be. Unfortunately, we couldn't get there, and that's where we are here with 178. but with what we have in front of you with the $140 million being generated we feel like we can keep the train on the tracks

then that bill would be null and void. As you said, that did not happen. The way that bill was drafted was, in fact, just for this plan year. And so we knew that we had to come back this session and find another solution for 27 and hopefully longer. Senator Mullica. Thank you, Madam Chair. And thank you, Senator Kirkmeyer. And I think it's a valid question. And I remember our conversations during the special session. You know, I think at the end of the day, this is the hand we were dealt from the federal government. when the health insurance affordability enterprise was created. It was created with insurance fees coming in to the state and then the premium tax credits funding the other half. And those premium tax credits, you know, were not renewed, and that, you know, has a large impact on the program, and it funds half of the program. And I think really where we're at is that, you know, we have been trying to find this long-term solution. and in my opinion I think that if you are going to make a change you should have some sort of runway for folks who are relying on especially vulnerable folks who are relying on on these programs to receive health care and I think what we are trying to do is to try to make sure that that the rug's not being ripped out from underneath people and that if there are changes that we create runways I think that's what we were trying to do in the special session with the hopes that the federal government would act. They still have yet to act. And so I think our goal here is being that we couldn't come up with a long-term solution, that we don't just rip the rug out from underneath folks and at least give some sort of runway. Senator Kirkmeyer. Thank you, Madam Chair.

Senator Mullica. Thank you, Madam Chair. Thank you, Senator Kirkmeyer, for that, and I think it's a valid question. I think when you look at this program and the program that we are funding with the Health Insurance Affordability Enterprise, the bang for our buck and the amount that it keeps premiums down far outweighs the numbers that you just said. And we heard those numbers from my co-prime sponsor. And so I think without this, we will see insurance rates increase for a family of four upwards of $2,000. And so I'm not sure where those numbers that you have are coming from. But I know that if we don't do anything and we let the health care affordability enterprise, you know, fail, we are going to see higher rates in the thousands of dollars for families. And so I think that, you know, that's where my thought process is coming from. But I greatly appreciate your question.

Senator Mullica. Yeah, thank you, Madam Chair. Thank you, Senator Kerr. I've heard the same argument, and I have the legal memo in front of me. And, you know, I think I will say that, you know, conversations will continue to try to address some of these concerns. But at the end of the day, if we want to talk about benefits, which, you know, I think that's the key word, you know, from these folks. Everyone who's paying this fee already pays into this enterprise. We're not bringing anyone in that doesn't pay. But if we want to talk about benefits, the entire market benefits from the health care affordability enterprise. The entire market benefits from lower premiums. And so it's not just, you know, it's not just when we are looking at that, that's a direct benefit. And so obviously, you know, you're going to probably hear from some people that are smarter than me maybe that's sitting right behind me. that is going to tell you something, and maybe we're going to be looking at, there's going to be an argument that this doesn't meet TABOR requirements or whatnot. I think there's a valid argument to say it does, though, and I think there are direct benefits that these folks receive from the healthcare affordability enterprise.

Senator Mullica. Thank you, Madam Chair. And thank you, Senator Frizzell. Yeah, I think that's going to be a lot of the conversations. You know, the program was created, you know, with half the money coming in from federal dollars that are not there anymore. And, you know, with the special session with this bill, you know, we are trying to find a way to keep the train on the tracks. I will say that during the summer and whatnot, a lot of the conversations were around what a permanent fee increase would be, you know, and how do we do that and what are some gives and takes that we could have? How do we build that partnership up with the industry? and unfortunately we couldn't get there. But that would be in the $150 million range in additional fees that we were talking about in perpetuity. And so this is really trying to be in response to the fact that we couldn't find that long-term solution, having it be a one-time fee, and then having the predominant amount of the dollars we need come from a bond rather than on the plans, really trying to listen to the feedback we've gotten. And so I do think there's going to be additional conversations of what it looks like long term and what feasibility does that do we have? And do we see, you know, any federal dollars, you know, on the horizon potentially that can help with this program? And those are all going to be a part of the conversation around the feasibility.

Senator Mullica. Thank you, Madam Chair, and thank you, Senator Frizzell. Well, so with the amendment that you all hopefully should have gotten, we are actually bonding against within the enterprise. And so the enterprise has a baseline of dollars coming in from fees from the insurance industry. And so we're issuing a bond against that revenue. So it's not tax credits. But, yeah, I think, you know, we want to make sure that through that bonding process that we are getting the best deal for that enterprise and for those dollars. and look, I'm not going to blow smoke. We're not in a great situation. This isn't a fun situation to be in, but it's the situation we're in and I think that we are trying to do the most responsible thing we can and make sure that some really vulnerable people in our state don't lose coverage or at least don't see large increases in the cost of their healthcare coverage. That's our goal and our intent.

Yeah, please, dialogue. Is that correct?

Oh, yeah, we're dialogue. Thank you. Sorry, Madam Chair. So essentially what we're doing here, Cinder Colker, is we have a baseline of about $140 million coming in in fees. Previously, before they expired, we had about $150 million in premium tax credits coming in, roughly, and that could fluctuate. And that covered all of the programs in the health care affordability enterprise, the three programs that fall under that umbrella. And so what we're trying to do here this year is try to keep a status quo of the same coverage and the same programs that we had in 2026 going into 2027. And so that's where this $140 million is coming from. It's what the commissioner and the division of insurance said we needed to keep those trains on the tracks.

$100 million.

Not necessarily leverage. I think it's just buy-in from the insurance industry.

And so, you know, I think that when we were looking at it, we were trying to figure out, you know, just the best path. and I think not having the industry pay the majority of those dollars but pay some of the dollars that we needed.

million a year is coming into the enterprise baseline And our net need per year is million Is that what you said Roughly It fluctuates but roughly yeah So this money is trying to be used for a one coverage of expenses

I mean, who knows whatever the bond market says, how long that bond is, the term. Yeah, it could fluctuate. You know, there's an enterprise board that this gives that authority to. I think you can even see terms in the 20 to 25 year range as well.

Senator Colker. I think that, you know, similar to what we had to do with UPTF, and there were some strong feelings on, you know, taking a loan on UPTF. I think there's similar strong feelings on reserves in this building in both chambers. And so that's just, we have to navigate that and where members are and how they feel about using those reserves. And so it's just a calculation we had to make to go this path in regards to, I think, how some of our colleagues feel about utilizing the reserves.

Senator Mullica. Thank you. Thank you, Madam Chair. Thank you, Senator Snyder. The insurance industry pays into the enterprise. There's a fee, and it's different based on if you're a for-profit or non-profit baseline. In this, with 178, we are calling out a $100 million bond that the enterprise pays and then $40 million to the insurers. And I think that obviously the insurance industry benefits. I think that this helps try to keep insurance premiums at a reasonable rate in Colorado. I think reinsurance program is a valuable program to our state and a valuable program to the industry. And I think the people of Colorado benefit as well in really trying to make sure that affordable coverage is accessible and that we don't see a massive change this year.

Senator Mullica. Thank you for that. Thank you, Madam Chair. Thank you, Senator Snyder. Not necessarily. There's a baseline of dollars coming in from the fee on the insurance industry. You're also seeing the bill that I spoke about a little bit in my opening statement around the Connect for Health Colorado that the insurance industry are able to donate around tax credits. And so those dollars can also be coming into the enterprise. but the bonding payment, the bond payment will come from that baseline of the fees in the enterprise.

Senator Mullica. Thank you, Madam Chair. Thank you, Senator Snyder. Yeah, that was the bill that we ran in special session. I believe it's later this year, early next year. The commissioner can probably say better to that. But, yeah, we had pretty robust language in there on auditing the program, making sure that it's being as efficient as it can from that special session bill.

Senator Bright. Thank you, Madam Chair. Just one question. We're dealing with a competitive market of health insurance, and so the injection of this arbitrarily might upset that. How can we be assured that we're not upsetting a competitive marketplace with this injection?

Senator Mullica or Senator Judah, so I've been having a lot of conversations about your bill the last couple days. And one of the things that, I mean, so you have $140 million that's coming in annually. That's payments from the insurance company. We're coming up with another $140 million here. $40 million is from the insurance companies. $100 million is from the bonds. And the bonds, my understanding, is the length of 20 years. Is that correct? so we're going to use 20 years of bonding and this $40 million one-time payment to pay for the expenses for this program for one year in hopes that we can find a long-term sustainable solution which I've always been all about a long-term sustainable solution we need to figure that out that's why I've been very challenged with this bill but part of the way that we pay back that bond is we right-size the program. And so the money that's going in for that $140 million, we're going to have to use some of that in order to pay it down, which means that we're going to be covering ultimately fewer people even while we're trying to shore up the health insurance. And so can you, I mean, do you have any idea how many fewer people we'll be covering when we right-size that program?

So in my conversations with folks about this bill is that the way that we pay back the bonds, because you need that $140 million of revenue every year if you're going to keep covering the same number of people. So basically we're going to be covering fewer people in order to use that money to pay back the bonds. Does that make sense? Because that money has to come from somewhere. And so over the next 20 years, if we reduce that by $20 million a year to use that to pay back the bonds, we're covering fewer people. So how many fewer people, I mean, how many people would we expect to lose under the scenario that the bill didn't pass versus how many people will we lose under the scenario that the bill does pass? I guess that's my, you know, sort of the delta there if that's the question.

Thank you. Senator Judah. Thank you, Madam Chair. And thank you, members of the committee, for all the questions and to my co-prime for handling all that. I think here's what it comes down to, is that over the past seven months, when we have been stakeholdering this bill extensively with everyone, we had made it very clear that there was going to be growing pains for carriers, for advocates, for everyday Coloradans, and for us as lawmakers. It's not lost upon us. And as my co-prime said, we do not want to be in this situation. But the reality is we are stuck between a rock and a hard spot. If we do not pass something, then yeah, we're looking at 40,000 lives losing health care, using the ER as primary care, which will also drive up costs in their own way. One thing that really helped us navigate this process over the past seven months was leaning on DOI to understand the numbers that were going to come out. And so once those numbers were able to be reported and what the final numbers looked like if this did not pass, if we did not find a solution, that's what allowed us to come to these numbers. Senator Frizzell, to your point, this is not a long-term solution, and we recognize that. I'm not going to sit here and sugarcoat that we have found the solution. we wanted to come into this session with a three four year solution but i'm going to push some buttons here so please bear with me we are in a very unusual position as a state we are in a billion dollar deficit and we have tabor and there are constraints upon us that are not allowing us to be maybe as creative as we would have liked when it came to finding funding and solutions. Other states are finding themselves in the same position, but again, they are not finding themselves in a deficit the way we are. So props to JBC for helping us navigate that So this is where we at And I think you have the commitment of myself and my co the stakeholders whoever in DOI next year And I would hope my colleagues to say, like, yes, we have to come back and find a longer-term solution that will, in fact, be sustainable. We wanted that. We couldn't get there. and there were the policies and the politics behind it that we all had to navigate. I'm being completely honest with you because this isn't easy, and I need people to understand that the urgency of this moment is beyond something I think we are starting to... the urgency of this moment is something that's going to hit us very hard, very fast, if we do not pass a bill. And I'm incredibly worried about 40,000 plus lives that keep me up at night, who will find themselves not able to afford their medication or, you know, have a primary care doc or find any basic needs that they will need with health care. And I really do kindly ask that you put yourselves in their positions if you find literally overnight your health care was being yanked out from underneath you. Thank you. Senator Kirkman. Thank you. I appreciate the comments. I'm just going to say, first of all, we're not just in a deficit. We're in what's called a structural deficit, and it's because of one-time dollars going for ongoing programs and continually overspending. We're not in a recession. We have revenues coming in, increased revenues. In fact, this year we have increased revenues coming in. This is the first year, I think, in the last five years since we knew we were in a structural deficit, that this branch and finally the executive branch said, okay, maybe enough's enough. And we actually didn't spend more than what was brought in by inflation plus growth. Actually, we didn't increase by more inflation in our ongoing general fund spending, but we still didn't decrease. So this issue that we're in is one of our own doing. We knew about it in March of 2021. We knew about it then. So everybody needs to understand. It's not a deficit. It's not because of debt. It is because of overspending by this branch and the executive branch and the judicial branch. But that wasn't really my question. My question is this. Cigna just signaled that they are leaving the marketplace. That would be for individual and family plans. They're 12% of the total market share. How do we keep competitive in this state so that all the rest of us, not those 36,000 people who are on the enhanced premiums stuff and getting the reinsurance and that kind of thing, not those people. How about everybody else? How do you explain this to the people who are going to see their premiums rise to $420 a year additional on top of what they're paying now, which is already high? We already know about the affordability issue. We all do. How do we explain that, and how do you really continue to say that we're going to have a competitive marketplace? Cigna, 12%. They're the third largest in our state providing these insurance plans for individual and family plans. They're taking a walk. What do we do?

They couldn't afford a permanent fee. We couldn't do that. We tried to be creative. We tried to come up with avenues and paths, and we couldn't get there. And so that's how we got here. I think that there's probably a lot of folks you're going to hear from today that wish that we would have a more permanent plan. But we didn't. And I think that's working with the industry. And so, you know, I think there's going to have to consistently be conversations of what our health care system looks like in the state. I think we're going to have those conversations over the summer, and it's not just in Medicaid in our state. It's the private market as well, and we have to figure out how do we get costs under control and how do we make sure that this market is good for the people of Colorado and that we stabilize the cost of health insurance and the cost of health care. And so I don't have a magic wand before you right now, but it's a conversation and discussion that needs to continue happening to figure out what we can do. Okay, thank you. I think we have a lot of witnesses, so they can probably answer questions as well. Why don't we move on to the witness testimony phase? The sponsors have asked for the people in opposition to testify first, So I want to bring up Trey Rogers, Mark Reese, Kevin McFattridge, Carly Tibbet as our first four witnesses. I'm glad everybody made it back in the building. Okay. We're going to go from my left to my right. We are limiting testimony to two minutes. I'm going to let everybody know this was our upon adjournment committee. The other committees were theoretically scheduled to start at 1.30 p.m. If somebody else has already said what you are going to say, feel free to say ditto. Feel free to make your testimony concise. We do have 27 people, I believe, signed up. We will get through it as efficiently as possible, but I would like everybody to keep in mind, I know this is a big topic and we want to make sure everybody gets fully heard as well. So starting on my left, please introduce yourself, and you have two minutes. Thank you, Madam Chair. My name is Mark Reese. I'm the Executive Director for Public Policy for CVS Health, which owns Aetna, the insurance company. I'd say ditto to a lot of the things that were said previously about how important the programs are that you're talking about today. I have the privilege of having worked on these issues in the state for a very long time, dating all the way back to helping draft and pass Senate Bill 200 over 10 years ago that established the exchange. I chaired several work groups, and the exchange was being set up. I was on the board of the exchange for eight years from roughly 2014 to 2022, somewhere there. I understand what's at stake. I understand how important reinsurance is to making sure that our insurance market can be as affordable as possible. And so I say all that, and I probably can say ditto to 23 other people testifying later today. So I want to particularly frame it that way so when I say what's next, you understand the context. We support trying to figure out how to make insurance more affordable. What I can support as Aetna is specifically Section 4 Subsection 1 Part B because it takes a dollar fee and divides it equally amongst health insurers with 20 members or more what that means practically for aetna for my employer is actually not a 21 pmpm it was stated earlier is about a 40 pmpm that is a 480 increase in our enrollees' health insurance to pay for programs that are incredibly valuable, but that we will never be part of as Aetna as we're not in the individual market. And so I'm trying to figure out how to reconcile paying for important programs with telling our enrollees, you are basically having to increase your insurance by nearly $500 a year to support a program that you can't even enroll in. I don't know how to do that. I know that I have a lot of information and background. I'd be happy to answer any questions you might have. Thank you. Thank you. Sir, please continue. Thank you, Chair and members of the committee. My name is Kevin McBattridge on behalf of the Colorado Association of Health Plans. From the inception of the high fee in 2020 through 2025, an estimated $700 million has been paid by individuals and employers as an increase in their health care premiums due to the high fee. Nearly $125 million will be paid again in 2026. The proposed $40 million assessment on the top five insurance carriers will increase the cost of health care when people can least afford it. Coloradans have elevated concerns about affordability of housing, groceries, and of course health care. This $40 million assessment further burdens these families. We know that the cost of health care is skyrocketing and are sensitive to that. CAP's mission is to be an indispensable partner in our community and an effective advocate for our consumers. This is why CAP either opposes or seeks to amend legislation that increases premiums. It is why we are here today in opposition to this bill because of the increased cost that will be borne by consumers and employers. We understand that insurance companies are often blamed for high premiums but the reason behind the high cost of care is more complex than simply blaming one part of the industry. Premiums are not increasing because of health because health insurance carriers are making more and more profits. We have mandated caps on profit and loss ratios. For example 87% of premiums go directly to paying for health care services including doctor visits, hospital care, and prescription drugs. Also contributing to the cost of health care are the federal and state mandated benefits that have been passed into law. State policies enacted since 2019 are estimated to have increased fully insured premiums by approximately 10 to 12 percent annually. Based on current premium levels, that equates to roughly $600 to $700 million in additional annual costs for Colorado consumers and employers. This is why we ask you to oppose Senate Bill 178. Thank you. Thank you, ma'am. Thank you, Madam Chair, members of the committee. I appreciate the opportunity to testify. My name is Carly Tebbet, and I'm with America's Health Insurance Plans, also known as AHIP, and we are also opposed to this bill. AHIP is opposed because it would increase health insurance premiums and make coverage less affordable for many Coloradans. At a basic level, when the state raises premium taxes or adds insurer-specific fees, those costs get built into premiums, which are then paid month after month by people and employers who buy fully insured coverage, particularly in the individual and small group markets. We understand this bill is intended to fund additional subsidies, and we understand that we share that goal. But the funding comes from higher premiums paid by everyone in the fully insured market, including small business employees, early retirees, the self-employed, and many middle-income families who do not qualify for assistance. And importantly, taxing insurance coverage does nothing to lower the underlying cost of health care. Instead, it raises premiums without addressing what is driving health care costs, which is hospital and provider prices, prescription drug costs, and medical inflation. AHIP research shows that nationally more than 40 cents of every premium dollar goes to hospital care and nearly 25 cents goes to prescription drugs. Colorado's fully insured market is already under pressure from rising costs, and adding a new state tax on coverage on top of those trends makes it harder for families and small employers to keep up with premium increases. If the goal is to make health care more affordable, policymakers should be focusing on reducing health care costs, increasing competition in the market, and addressing the true cost drivers in the health care system rather than imposing additional premium taxes or fees that raise costs in the market. For these reasons, AHIP respectfully or does the committee to oppose this bill? Thank you for your time. Thank you so much. Sir, you have two minutes. Madam Chair, committee members, my name is Trey Rogers. I'm here on behalf of CVS Aetna. I've been in private practice in Colorado for 29 years, except for three and a half years that I spent as Governor Ritter's chief legal counsel. In that role and since I've been intimately involved in crafting legislation and litigating cases that concern the application of TABOR in our state. There are several ways this bill is problematic under TABOR. First and most important, carriers like Aetna, and I understand Senator Kirkmeyer, Soon-Signa, sell in the fully insured small group and large group markets, but they do not participate in the individual market. This means, in this particular case, under this bill, Aetna would be required to pay approximately an $8 million one-time charge, but the company would receive no benefit from the enterprise. Second, some carriers participate only in the individual market. Those carriers would receive 100% benefit. So they pay $100, they get $100 in benefit. But for other carriers, the individual market is only part of what they do. So consider a carrier that has one-third of its business in the individual market and two-thirds in the small or large group markets. That carrier gets a value of about 33 cents on the dollar. These kinds of disproportionate benefits are not permitted under taper. Now, Colorado courts have found that in some circumstances it's okay that some who pay the fee don't participate in the benefit. For instance, in the bridge enterprise case, the court of appeals held that the program's charges were fees, despite the fact that some cars pay registration and may never use a bridge repaired by the enterprise. But that case doesn't save this bill for two reasons. First, no Colorado court has held that it is permissible for an enterprise to collect a fee from a payer who cannot ever participate in the benefit of the program. second again in the bridge enterprise case the court held that a fee may be quote imposed on those who are reasonably likely to benefit from or use the service close quote that's not the case here and it does not participate in the individual market it is not reasonably likely to benefit from the enterprise moreover in the bridge enterprise case uh the court required i am very sorry but you are over time can you wrap up you bet um Yeah, let me just stop there. Maybe we can pick some of that up in questions. Thank you. Thank you. Appreciate it. Members do we have questions for this panel Senator Snyder Thank you Madam Chair and thank you all for being here on this lengthening afternoon Mr Rogers I don have a great understanding of insurance but does this bill include stop loss insurance? Mr. Rogers. Thank you, Madam Chair. Thank you, Senator. That's a great question. My understanding is the DOI has interpreted the bill to include stop loss. My view on that is that stop loss is not health insurance and that it should not be counted in the calculation of how many are covered under the particular plan. So that's also problematic. I just didn't have time and two minutes to get into that. I think Mark may have a better answer than that, by the way. I'm sorry. And Mr. Reif, there you go. Thank you, Madam Chair. According to the statutory definitions in place in the introduced bill, it would not include stop loss. As Senator Mollick has stated in the beginning, there's no new taxpayers under the bill. as part of his introductory remarks. Stop loss is more of a financial protection for employers. Stop loss is not sickness and accident coverage, and one of the conditions of the bill is that it is coverage offered for sickness and accident. That said, if there is a broader interpretation, I do think that raises a significant number of questions pertinent to what Trey was just talking about. Thank you. Senator Snyder. Thank you. So I'm trying to establish what's the nexus between the fee and the payer in the stop-loss market? Sorry, Mr. Reese. Thank you, Madam Chair. Thank you, Senator. Right now there is no nexus in the sense that stop-loss insurance, which is not a health and accident product, those who benefit from stop-off insurance do not pay the fee today. So if it was interpreted to include stop-loss insurance under a new interpretation of existing definitions, then there would be questions about how they would benefit, given that, by definition, an employer could never buy individual market coverage. But I will defer to the lawyer on that one. Thank you, Mr. Rogers. I agree with Mr. Reese's statement. The answer, Puch, in a simpler term, Senator, is there is no nexus. if a carrier is required to participate in the enterprise because of the sale of stop-loss coverage. And one final. Yes, Senator Steiner. Okay, so I'm trying to get an understanding of how these revenue bonds are going to work. So maybe one of you has better familiarity than I do. How? Is there a stable funding source in this enterprise that would be sufficient? I think we heard the bill sponsors say it would be about $10 million a year for 20 years or something like that. I don't know that this panel is the panel to ask that question of because you guys are the insurance market, so I don't think you're the bond market. But would any of you like to take a stab at that or should we defer it to a later panel? Okay, we'll defer that to a later panel if that's okay. Senator Benavides. Thank you, Madam Chair. And my question is for Mr. Rogers. I'd like you to explain what you think are constitutional impediments in this bill, specifically with regard to Tabor and whether this is a fee or a tax, and that if this would be considered a penalty at some point, since it's not a direct benefit to the insurance companies, the potential due process claims. So if you could explain those. Mr. Rogers. Thank you for the question There a simpler answer than the penalty and that is because there is no nexus between payers who do not participate in the individual market and the benefit received this bill is simply noncompliant with Tabor The problem with that is not only could the state be required to refund the money paid under this bill, and in fact paid to the enterprise over the last five years, plus a 10% penalty, we could get an opinion out of a court that would make it much more difficult for this body to use the enterprise tool to address important needs in the future. And then finally, with regard to the infirmities, I appreciate Senator Mullica's argument that the bill will benefit carriers not in the individual market in the form of a more stable insurance market. And I think it's important to keep in mind that under Tabor, an enterprise is a government-owned business. It must provide a good or service in exchange for a fee. Here, a business that charges a fee to provide some nebulous and abstract stability in the insurance market simply doesn't qualify. This just isn't the kind of entity that qualifies as an enterprise for TABOR purposes. So those are the key ways in which the bill creates a TABOR problem. Can you help me understand, and maybe I'm just wrong here, but my understanding was that the companies that are paying into the $40 million are also the companies that are paying into the $140 million. Is that correct? Okay. If that is correct, then how do you differentiate the $140 million from the $40 million? Mr. Reese. Thank you, Madam Chair. I specifically brought up Section 4-1B previously because it divides it equally, and in doing so, that's where we get our about $40 PMPM impact. For reference, Aetna has, according to 2024 DOI premium market share data, granted this bill talks about 2025, but that report's not out yet, Aetna has 16,000 members in the market. There's been an underlying assumption that the cutoff, wherever it may be placed in the final legislation, would include Aetna as the fifth largest carrier. And so if you take an $8 million liability for Aetna divided by the 16,000 members, it works out to about $40, actually $40.40, if we want to get very specific, per member per month. For context, the top four carriers above Aetna who have substantially more membership, $370,000, $288,000, $132,000, and $254,000 individually, would have a PMPM impact of $1.82, $2.33, $5, and $3.34, respectively. So that is why I'm here specifically opposing this bill as Aetna. I can't compete if I enter the equation with a $35 price differential. I'm sorry, and my brain may be exploding right now because I'm trying to just understand, and sorry, it's already been a long day. Of course. So you do participate right now, but you participate on a more proportional basis than an equal share. Yes. Thank you. That is very helpful. Mr. Rogers, did you wish to weigh in as well? Thank you, Madam Chair. Yes. The infirmities in the bill have been present since the beginning The fact that no carrier has chosen to litigate those fees is fortunate for the state This bill however exacerbates the TABOR difficulties or the TABOR violations of the bill So I think you've had exposure from the beginning. This bill will magnify that exposure substantially. Understood. Thank you. Senator Kirkmeyer. Thank you. And that was part of my question, and then I also have another one for Ms. Reese. But it's essentially this bill gets litigated because there has been exposure in the past. Because, again, if the fee that is charged doesn't go to a benefit to the people who are paying the fee, that's a violation of TABOR because now it's not a fee, it's an actual tax. So that's the issue. So if this bill passes, we are at greater risk of litigation and totally losing the whole enterprise. Is that correct? Mr. Rogers. Thank you, Madam Chair. Thank you, Senator Kirkmeyer. You are exactly right. Thank you. I love to hear those words. Can I ask my other question? Please, Senator Kirkmeyer. Thank you. This is for Mr. Reese. We heard the argument that the fee benefits the entire market, not just those in the individual market. I'd like you to discuss that. You started into it, but I'd like you to go a little bit further. And then I'd like you also to, in your best estimate, how solid is the market here in the state of Colorado? Like I said, Cigna's leaving. Are others on their way out the door, too? Sorry, was that for Mr. Reese? Yes. Mr. Reese. Thank you, Madam Chair and Senator Kirkmeyer. I'll come back to the second part of the question. I think there is a natural assumption, and it makes sense. If I say hospitals, they're the largest portion of any health plan spending. That's unequivocally true for any health plan, has been forever. And if hospitals have a steadier revenue stream and have less uncompensated care and have a more predictable revenue stream via commercial insurance, that does provide stability. However, with the specific context of the individual market, when I left the exchange board a couple of years ago, there was roughly 180,000 to 220,000 enrollees. Today, the C4 enrollment report for this year indicates $280,000, a little bit more than $280,000. And in large part, because of the affordability, has gotten better. We have had additional federal subsidies in the market. We have had additional state subsidies in the market. Insurance is cheaper. More people have bought insurance. Pretty basic straight line economic math there. If there was a direct correlation that was greatly benefiting the employers from this, employer costs should have gone down. Right. More people insured. Hospitals have a greater, more predictable revenue stream. I can unequivocally say hospital costs have not gone down in the last five years. Now, there's a million different reasons for that. I'm not trying to belittle all the things hospitals have gone through. What they did during the pandemic was God's work. And they have been trying to keep up with all sorts of adverse economic forces against them since. But we have never seen a correlation of when enrollment ticking up in the individual market. and hospital costs going down for the rest of the market. Now, in the inverse, you think, okay, enrollment might go down in the individual market, and therefore hospitals will have less insured members come in their door. Maybe they'd have to then cost shift up, right, kind of the inverse of my point. My response to that is, one, even before reinsurance and even before some of the state subsidies we have in place now, we had a pretty robust individual market, and hospitals were not shifting dollars around at that point. So if we had some marginal loss of enrollment, hospitals are used to that payer mix that existed five years ago. But more importantly, and again, I'm not trying to belittle anybody, it's just healthcare economics. If hospitals had the unilateral leverage to raise costs based on a marginal change in enrollment in the individual market, I can promise you as somebody who's worked for a health insurance plan for 15 years, They'd already have done it. They don't sit around and wait and say, oh, now our cost structure has to change. Now we're going to try and change our revenue and our contracting approach. To their credit, hospitals are very good at negotiating. We try and do our best. Sometimes we succeed. Sometimes we don't. Certain health plans are better at it than others. But to say that a decrease on the margins in the individual market would suddenly mean hospital costs would spike for the employers, if the hospitals had that leverage, those employers would already be paying that cost. And if you look at current rates for hospitals, I'd say we already are. Okay. The second part. Oh, market stability. Thank you, Madam Chair. I'm not 100% sure directly how to answer it. I would say the group market is very stable. It's been, quite frankly, pretty stable amongst the same set of carriers for a number of years. The individual market has certainly had more ups and downs. There's been a couple of insolvencies that have impacted the individual market. There's been some market entries and exits. There's just inherent volatility in the individual market that doesn't exist in the group market because there is such price sensitivity. If you look at any one year, if there's a major plan that changes its pricing downward in a given year, they can pick up significant market share. But with that comes, you better know how to control your cost. If your enrollment goes from zero to 100,000 overnight, you better know how to control your cost. And unfortunately, the state has experienced a couple plans that grew too fast and went out of business. I'm not sure why Cigna is leaving the market. According to some statements earlier today, it's kind of a national trend around cost issues for Cigna. As somebody who works for Aetna, who left the individual market nationwide last year, it was because we lost a couple billion dollars. It is a highly volatile market, and that's why we want stability, but it is just inherently less stable from a carrier participation standpoint than the group market. Thank you. That's very helpful. Okay. Do we have any further questions for this panel? If not, thank you so much for being here. Thanks for hanging out with us all day to testify. And let's go on to our next panel. We are going to bring up, oh, I believe she didn't need to testify. Okay. So, Mission Smith and, oh, I'm sorry, I couldn't read that Michael Smith and Aaron Meshki and okay and if anybody else is here in an amend or an opposed position this is your moment come up on come on up and fill one of these chairs and we'll have you sign up later but with that Ms. Meshki please go ahead Madam Chair, members of the committee, thank you for the opportunity to speak. My name is Erin Meshke. I live in Boulder and represent myself. Initially, I had two main objections with SB 26178. First was any use of the unclaimed property trust fund, and second was the fallacy that taxing insurance companies $40 million wouldn't increase costs for Coloradans. While the funding source has changed to use bonds and premium tax credits. We have already seen the shortfall from the special session premium tax credit scheme so I have no confidence this amendment will work Also it seems like common sense but it important to note that any sustainable solution cannot be based on borrowing money The medical and insurance costs being funded by the state have grown leaps and bounds above all projections when previous bills were passed. So the solution must be found in reevaluating programs and ultimately to not offer such broad coverage. We need another approach, but SB 26178 will only raise costs and push the problem off for another year, so I ask for your no vote. Thank you. Thank you, and I'm sorry, Vanessa Martinez is from Vanessa here. Yes, anybody who is an amend or oppose, this is your moment. Please come on up. Sorry about that. Please hold for questions, Ms. Meshke. Ms. Martinez, please proceed. Thank you. My name is Vanessa Martinez. I'm testifying on behalf of COLOR, the Colorado Organization for Latina Opportunity and Reproductive Rights, in an amend position on Senate Bill 178. This bill is critical for the health and stability of families and communities across Colorado. Without legislative action, as you've heard, programs that Coloradans depend on will be underfunded and face cuts, forcing thousands of families to choose between rent, food, and health care. This is already happening. Last fall, even after the passage of 1006 in special session, more than 5,000 Coloradans lost their omni-slead coverage because their name wasn't drawn in a lottery. No new enrollees were accepted. Since, Colord has spent hours on the phone with people who lost coverage. Coloradans who can no longer afford medication to manage their diabetes, who have been injured and can't get proper care, who are navigating a cancer diagnosis and had to stop treatment. For those who kept coverage, out-of-pocket costs doubled. Many didn't realize it until it was too late, delaying care or facing bills they don't know how they'll pay. We owe it to these community members to do better. We urge you to support the sponsors' amendments to strengthen input from directly impacted communities. And while we remain concerned about the one-time nature and debt implications of bond funding, we also urge you to support the amendment designating these resources to keep the program alive another year so we can continue working toward a viable long-term solution. We are grateful to the sponsors for their efforts and remain committed to that work. Thank you. Thank you very much. Okay. Do we have any questions for this panel? Senator Kirkmeyer. Thank you. For you, ma'am, and I'm sorry I didn't catch your name. Ms. Martinez. Thank you. Do you think that everyone getting insurance should at least pay some kind of insurance premium for that insurance? Ms. Martinez. I think that health insurance should be affordable to everyone, and so I don't think that that means that everyone should pay some type of premium because I think that it's a right and everyone should have access to health insurance. Thank you. Seeing no further questions, thank you so much for testifying. We really appreciate your time today. We're going to go to in support witnesses. We're going to start with Kevin Patterson, Isabel Cruz, Tony Sarge, Christina Walker, David Navas. I think several of them are in the hall. Well, hopefully they'll come in. Yes, we're going to start with you. And are we okay? I think we have everybody. Please go ahead. Thank you, Madam Chair and members of the committee. My name is Christina Walker I the Senior Director of Policy at Healthier Colorado a nonprofit organization dedicated to providing every Coloradan with the opportunity to live a healthy life Thank you for the opportunity to testify in support of Senate Bill 178 As a part of our mission at Healthier, we want to ensure that folks can access and maintain their health care coverage. Research has shown time and time again that access to preventative care saves us money down the line, strengthens public health outcomes, and makes our communities healthier. Without health care coverage, people put off accessing care, become sicker, and utilize emergency rooms for more routine care, which is far more expensive. Moreover, when Coloradans have health insurance, our health care providers can get paid. As we learned during the Medicaid unwind, Colorado's providers saw an increase in uninsured rates that rivaled pre-Affordable Care Act levels, and we put an intense strain on our safety net providers. If the number of uninsured continues to rise, leading to increased uncompensated care, Colorado's health care providers will be faced with more challenging decisions, such as making service line cuts or to close altogether. During last year's special session, the legislator passed the bill to secure these one-time funds for the health insurance affordability enterprise, and it really made a profound difference. The state's reinsurance program was able to decrease premiums by 20%. 69% of Coloradans who purchased their health insurance on Connect for Health received premium subsidies and overall saved $75 million through initial enrollments. And initial enrollments only dipped by 2% when they were originally expected to dip by double digits. Also, the bill preserved 6,700 Omni-Salud spots for eligible immigrants for 2026. Without this stopgap funding, only 2,000 subsidized plans would have been available. While Healthier Colorado is disappointed that a sustainable long-term funding source has not been secured, We appreciate that the sponsors work to find another one-year solution, and we believe Senate Bill 178 is a reasonable step forward to maintain folks' access to health insurance and support our health care ecosystem. Thank you so much. I'm happy to answer any questions. Thank you. Please hold for questions. Please proceed. Thank you, Chair and members of the committee. My name is Toni Sarge. I'm the Director of Health Policy at the Colorado Children's Campaign. Colorado Children's Campaign is a nonprofit, nonpartisan policy organization committed to making Colorado the best place to be a kid and to raise a kid. We use data and we use research to identify what kids need across our state, and we advocate for policies that strengthen their well-being and help them thrive. That is why I'm here today in support of Senate Bill 178. We know with absolute clarity that when families have health insurance, their kids do better. Research consistently shows that ensured children receive preventative care, developmental screenings, and treatment for acute and chronic illnesses earlier. Just last year here in Colorado, 29,000 families with kids received Colorado premium assistance subsidies, and 20,000 of those enrollees were children themselves. This premium assistance program, along with reinsurance and OmniSalud, are critical programs that this affordability enterprise that Colorado families depend on. These programs help families say yes to the care that their kids need. If this bill does not pass, we know that premiums will rise sharply, especially in our rural and mountain communities. We know families will lose coverage, and we know that parents will skip care, kids will miss appointments, and medications will go unfilled. I urge your yes vote on Senate Bill 178 to maintain the work that we have already built so that kids don't get sick because we couldn't figure out a funding source, and that Colorado's kids can just be kids. Thank you. Thank you. Ms. Cruz. Thank you. Good afternoon, Madam Chair and members of the committee. My name is Isabel Cruz and I'm the policy and advocacy director for the Colorado Consumer Health Initiative. CCHI is a nonpartisan, nonprofit, membership organization whose mission is to ensure all Coloradans have equitable access to affordable and high healthcare I here today to express our support for SB 178 and ask for your yes vote We appreciate the sponsors for bringing this policy forward and the work over the last year to navigate challenging politics to protect vital coverage programs for Coloradans. Colorado cannot afford to risk leaving people uninsured or forcing families' premiums to go up with the current shortfalls facing the enterprise next plan year. Lack of insurance has a ripple effect on our economy and all residents. it negatively impacts education, career prospects, and overall health. Uninsured Coloradans are forced to rely on costly emergency care, driving families into medical debt, and driving up uncompensated care for providers. Investing in reinsurance, subsidies for low- and middle-income enrollees, and Omni Salud is not just about health care. It's about Colorado's economic future. We urge you to move SB 178 forward to advance needed changes in the waterfall, address transparency and process improvements in the enterprise, and to keep working on a funding source that doesn't risk the future viability of these programs on an expensive temporary solution. It's important to remember that the health insurance fee that funds the enterprise is simply an extension of what insurers previously paid at the federal level. This was not a new fee. The current rate, even adding the proposed one-time assessment, is lower than what carriers were paying under the original ACA provisions. Individual independent evaluation of Colorado's programs has shown that state-based subsidies can lower costs and improve affordability while maintaining a stable insurance market. We urge you to consider returning carrier fees and pursue other long-term funding sources to sustain these programs long-term. At a time when immigrants' access to coverage and rural access to health care are under attack nationally, Colorado must lead in ensuring that health coverage and health care remains accessible to all. Thank you and please vote yes. Thank you. Madam Chair, members of the committee, thank you for the opportunity to testify. My name is David Navas. I'm the policy and campaigns manager at the Colorado Immigrant Rights Coalition. CERC represents thousands of Coloradans who depend on the health insurance, affordability, enterprise, and Omni Salud for coverage they cannot access anywhere else. We are here today in support of the committee's work and to offer our perspectives as you consider the amendment that will shape this bill. First, we are grateful. In a moment when the federal government is making decisions that will strip health care from millions of Americans, Colorado is choosing a different path. The decision to find sustainable revenue for the HIAE is the right one. We appreciate the work of the sponsors to find a viable path forward on what is fundamentally a financing problem, and we are grateful this committee has given it a hearing. That said, we want to be honest about what we're watching closely. Our members have one core ask, preserve Omni Salute at its current enrollment level and actuarial value. These are not abstract numbers. Every slot represents a Coloradan who would otherwise rely on emergency rooms whose uncompensated care costs a lot more for all of us than the subsidy does. The cost avoidance argument is real and it is documented. Protecting slots is not a charitable act. It's a fiscally responsible one. We also want to name something directly. We know this bill will continue to evolve as it moves through the process, but the precedent being set here around how the enterprise takes on obligation and repays it will shape this program for decades. Colorado has seen what happens when that service is built into a program without the right guardrails. We are asking this committee to move this bill forward. Let us be clear about where we're here. The $140 million gap this bill is trying to close exists in large part because federal matching funds that the enterprise depended on where rubric pulled without warning by the current administration and HR1 is compounding that damage driving up premiums and pushing Colorado's coverage in real time Colorado did not create this crisis, but we do have the opportunity to respond to it by building something more durable and less dependent on the federal government and decisions that we cannot control. Healthcare requires consistency, continuity, and funding stability. Let us not solve a federal problem by creating a structural one here at home. We look forward to continuing to work with you, and thank you. Thank you. And please hold for questions. Mr. Patterson, you have the floor. Thank you, Madam Chair. Can you hear me? Yes, we can hear you. Great. Again, thank you, Madam Chair, members of the committee, and I appreciate the opportunity to testify with you today. My name is Kevin Patterson. I'm Chief Executive Officer for Connect for Health Colorado, the state's official health marketplace. Our board has taken a position in support of Senate Bill 178 because we see clear value for the customers we serve. As the entity responsible for implementing these programs, I'm here to share what we are seeing on the ground. The past open enrollment was unlike recent years. After five years of growth, we saw enrollment decline and clear signs of affordability strain, largely driven by the expiration of the enhanced federal premium tax credits. As a result, Coloradans are paying an estimated $19 million more per month in premiums than last year. So from our vantage point, we saw fewer customers, increased plan cancellations, and declines among older Coloradans and those in rural communities. At the same time, state action made a meaningful difference. The Colorado Premium Assistance helped stabilize the market and keep coverage within reach. More than 176,000 customers received this support for the plan year 2026, and many who lost federal assistance were able to stay covered and enrolled because of it. We also saw this reflected in our customer experience. The satisfaction was higher among those receiving financial help, 74% compared to 64% for those without. So for customers receiving that assistance, premiums remain relatively stable year over year. Without support, we saw significant increases, nearly 30% in some counties. That contrast directly affects whether someone enrolls, renews, or goes without coverage. We're also seeing early signs of this pressure continue with a fixed rate of enrollment down about 4%. But looking ahead, uncertainty at the federal level remains, and that creates an ongoing pressure for affordability and market stability. What we learned this year is that state-level support plays a critical role. It helped mitigate federal changes, it maintained enrollment, and preserved access to coverage. From an implementation standpoint, this bill allows us to deliver stability for customers in an otherwise uncertain environment. Thank you, and I'm happy to stay on for any questions that you have. Thank you. Members, we have questions for this panel. Senator Kirkmeyer. Yes, I'd like to know from everyone if you think that everybody should at least pay some insurance premiums. I'm sorry, Mr. Novice. Thank you, Madam Chair. Thank you, Senator, for that question. I represent an organization, a coalition of community members that benefit from this program, and we have a health steering committee where our members give us the directives as to how to respond to these diseases here in the legislative body, we definitely discussed what it would be like, or in fact, that we would prefer to see some cost share upfront and be part of the money that goes into the enterprise as long as we are able to keep the integrity of the enterprise and continue the enterprise for the longevity. That requires modeling. I don't think the JBC would have been able to pay for a study to support the modeling necessary to build the premiums this year, but it is something that we are considering for the long solution but we need this bridge to get to that point where we can do so I just 6 people on the Omni Salud program can really close it would take a million of premium a million dollars per member of premiums to get us to close that $140 million gap at the moment. So yes, for the long-term solution, for long-term stability of the program, for increasing slots, absolutely, we want to consider that and we want to advocate for that, but this is not the moment for us to do so. Thank you. For the questions for this panel? Well, okay. Ms. Cruz. Thank you, Madam Chair. Thank you, Senator Kirkmeyer, for the question. Just echoing what Mr. Navas was saying, we've heard directly from Omni Salud enrollees that they are interested in the prospect of paying premiums, but that was not structurally possible. according to the Connect Colorado platform. That was where people got that coverage last year, and so that was something that could be built moving forward and something that community is actively talking about. And just to put it in perspective, this year Omni Salud enrollees are paying $90 at a copay for specialist visits versus $40 last year. They had a 275% increase in their deductible, almost 500% difference in out-of-pocket maximum and two times the coinsurance based on the current model. We also do know just for the broader marketplace that people can be really price sensitive and it is really important for us to be thoughtful about how we keep healthy risk in our market with our premium choices. Ms. Sarge. Thank you, Chair. Sure. Thank you, Senator. Ditto. I'll just add that at the Colorado Children's Campaign, we've paid attention for many, many years about how co-pays impact how families use and pay for and access health care. And we are just extremely cautious about ensuring that families who can't and won't pay those co-pays don't have to so that that cost doesn't then burden the health care system and the providers in general. So we just want to say that we pay deep attention to families of certain incomes and low-income ability to pay co-pays. Ms. Walker. Yes, thank you for that question. And to go off of what Ms. Cruz said, the Omni Salute, the high board, the Health Insurance Affordability Enterprise Board this year changed the Omni Salud value from a 94% actuarial value down to a 73% actuarial value. So they dropped the value. That's why those co-pays and those out-of-pocket costs went up. And so what we're doing is just having folks pay on the back end. And so really what they're having to do is try to think through, which is always something that we all have to do when we're thinking through our health insurance, is like, what costs do I have this year? So not only are some folks paying premiums, but they're paying higher out-of-pocket costs because of the option that they chose. And they're just hoping that they're not going to get sick. And then when they do, they can sometimes forego care because they can't afford that out-of-pocket cost, such as a higher out-of-pocket cost overall. And so I do think that there is a cost sharing there that is really important, and that actually went up and increased by a lot in the past year. Mr. Patterson. Thank you, Madam Chair. Senator Kirkmeyer, I just want to ditto everything my fellow panelists said. But we do have $0 premiums that are on bronze on the exchange, and they've been there for some time. But it is about not just premium, it's premium cost share coinsurance as we look at cost. Great. Thank you so much. Senator Benavides. Thank you Madam Chair This question is for Mr Patterson It good to see you But I was wondering do you think of the stability of your providers in the marketplace is somewhat unstable right now or how do you see that in the future? Mr. Patterson. Thank you. Thank you, Madam Chair. Senator Benavidez, good to see you as well. I think we know that some carriers are looking to flex their market share into the employer market. The individual market is very different. I think Mr. Reese was accurate in saying that they're very different markets. But as we have seen venture capitalists come in to try to buy the market, that has introduced some inconsistencies in our plans over the years. But as we know, we're losing one with Cigna. We are also talking about adding one for Colorado Access. So I think we're at a place where there will still be good options. You know, we will go from six to six. It'll just be a different one. And I think there are other states that would be quite happy to have this number of competition in a state. Thank you. Okay. Thank you so much, everybody. We really appreciate it. I'm going to let everybody know we have three more panels, just so everybody can judge their time. Gardenia R., Denise G., Javier G., Elise Kong, Damien De La Cruz Mayo, and Nicolette Torino-Springstein. Okay. Well, since you're here, we'll start with you. You have two minutes. Thank you. Thank you. Thank you, Madam Chair, members of the committee. My name is Summer Laws, and I will be reading Gardenia's testimony in English. My name is Gardenia, and I'm a leader with the Center for Health Progress. Today I would like to share something very personal regarding how Omni Salute has changed my life. As a mother of two children and a member of a family, I know how important it is to feel healthy and protected. However, I also know how difficult that can be when we don't have documentation. And I know that the options available to us are very limited. For a long time, I lived with constant worries. What if something happens? Where do I go? How will I pay for it? In 2023, I went through one of the most difficult periods of my life. Due to issues with my endometrium, I needed to undergo very expensive medical tests, including a biopsy to ensure that I didn't have a major illness such as cancer. At that time, I was not enrolled with OmniSlude, so I had absolutely no coverage. Because of the high cost, I delayed seeking care for a long time. I lived with fear, with uncertainty, and with that constant anguish of not knowing what was happening with my health. A mother's worst nightmare. It wasn't until 2024, thanks to Omni Salud, that I was finally able to begin getting checkups and medical tests and to properly manage my health as I should have been doing. That is when I felt true relief, not only because I could access medical care, but also because of the peace of mind that came from knowing that I was taking care of myself in a timely manner without having to choose between my health and finances. Today I feel calmer and more secure. Omni salute is not just affordable coverage it is a safety net a source of support and a real opportunity for those of us who feel as though we have no options taking care of yourself and your family should not be a luxury It should be a right Thank you for listening to my story Please consider voting yes to SB 178 so that we may continue to live healthy lives, not just for ourselves, but for our families. Thank you so much. Please proceed. Good afternoon, Madam Chair and members of the Senate Finance Committee. Thank you for allowing me to testify in support of Senate Bill 178. My name is Elise Kong, and I'm a 50-year-old high school sophomore at Denver School of the Arts. It is incredibly upsetting that a 50-year-old high school student has to take time off from school and testify in committee to defend affordable health care for Colorado families. Immigrants should not have to pay more for medical services or fear that they will lose coverage because access to health care ought to be a guaranteed right. I have been tracking the health insurance affordability enterprise bill since July, and the affordability of health insurance through programs like OmniSlude are especially meaningful to me because similar programs in the past allowed my parents to afford health care when they had immigrated from Vietnam to America. I myself am a first-generation Vietnamese American, and I am endlessly grateful for state programs since they are part of the reason why I have the privilege to testify in support of this bill today. Extending the funding for Colorado's health insurance affordability enterprise for another year allows for OmniSlew to be funded and ensures current OmniSlew enrollees can keep their coverage. Not only that, but providing funding this year is a crucial next step towards long-term solutions in which consistent funding and growth can become a reality. Healthcare isn't equitable today, and it is devastating to see some people in our state are protected while others are left without the same security. I cannot imagine going through the stress of being a high school student along with worrying that if anything were to happen to me or someone in my family, our health care would not be covered. That is why the passage of this bill is so significant. While the bill doesn't provide a permanent solution, it protects those who have coverage right now from losing it, and it is essential in ensuring that we have the opportunity to create long-term solutions that do not require policy debates and funding requests every legislative session. For these reasons, I urge you to vote yes on Senate Bill 178 because health care must become accessible for everyone. Thank you for your time and consideration. Thank you. Please proceed. Thank you, Madam Chair and members of the committee. My name is Nicolette Tenino-Springstein. I am the Youth Policy Fellow with Color, but today I am testifying on my personal behalf. I have been tracking the health insurance affordability enterprise since September of last year. As a focus on my fellowship project, coming into this work, I heard loud and clear commitments to the Coloradans most impacted by these programs. I believe that if you showed up consistently and built partnerships early on that you could meaningfully influence policy. What I have realized instead is that this process is more predetermined and less transparent than it appears, and that quickly discussions were less about people and more about dollars and whose bottom line could be touched or not. That disconnect is especially clear when we look at the original commitments of the HIAC. The state committed to improving health outcomes for all Coloradans and expanding access to affordable coverage for low-income and uninsured Coloradans. OmniSalud was an integral part of that commitment, and yet that was the only program that was cut last year, with the number of people who depend on OmniSalud to stay healthy dropping from $12,000 to $6,700 through a lottery system. We knew uncompensated care would strain hospitals. we knew that sustainable funding would be necessary to uphold the commitments the state made. And still we are here today trying to secure temporary funding for a program that should have had long-term support. protections in place from the beginning. You have heard from community today and many who tried to recenter people in this conversation, but there is a difference between hearing community and taking accountability for what they're asking. This bill is not a permanent fix, but it is necessary. Passing it means extending funding for high and preventing further harm by ensuring current enrollees can keep their coverage for the next year without being forced into another lottery system or worse. It also means taking one step closer to honoring commitments that were made years ago. I urge your yes vote. Thank you. Thank you. Please hold for questions. Javier, please go ahead. Good afternoon, Madam Chair and members of the committee. My name is Javier Garcia, and I am testifying on behalf of Center for Health Progress. I want to share my story about how OmniSalute changed my life. After losing my job, I also lost the ability to pay for private health insurance. I could no longer afford a full-time price coverage, and this took a heavy toll on me, both financially and emotionally. When I had private insurance, I had access to preventative care, mental health services, and treatment for an ongoing condition I developed after being bitten by a bug while hiking the Rocky Mountains. Losing that access left me feeling hopeless. OmniSalud gave me the chance to take care of myself and my family again. He restored my access to the doctors, medications, and the mental health support that kept me healthy. Having this coverage has been a gift. It has allowed me to live a full life, both physically and mentally. And for many of us who rely on OmniSalute, it is life-changing. It is the difference between stability and crisis, between health and the client. I am really grateful to have my spot in this program this year. Yet, I know how frustrating it is to continue to have the stress of losing health insurance coverage year after year. I continuously hear from my community the fear and frustration of continuing to share our stories of pain and change not happening. I am one of the 6,700 individuals that thankfully made it into the lottery. However, more than 5,000 lost their coverage. Everyone deserves the opportunity to care for their health and for their families. Healthcare should not depend on where you were born, but on the fact that you are part of this community. I know this is a temporary fix, so I look forward to continuing to this conversation and to share my story with you again next time. We are especially concerned with the funding source being a bond instead of being a fee increase on the carrier. Despite this concern, our top priority is to protect the Omni Salute program, so we are supporting this bill. I ask you to put yourself in the shoes of these 5,000 community members that last their coverage and to consider the real impact this program has on people like me. Thank you for your time. Please vote yes on SB 26178. Thank you. Thank you. Members, do you have questions for this panel? Thank you so much. We really appreciate you being here today. I'm going to call up our next panel. This is our county commissioner panel. Kristen Stevens, Larimer County Commissioner. Commissioner George Martin from Clear Creek. Commissioner Marcia Porter Norton from La Plata County Commissioner Tamara Pogue from Summit County and Commissioner Marta Loeschman from Boulder County and again I know it's late in the day and you've probably waited online all day to talk to us so we all have later committees so feel free to be concise if your points overlap So Commissioner Stevens please begin Thank you Madam Chair and members of the committee I thank you for the opportunity to testify today I'm Commissioner Kristen Stevens from Larimer County here on behalf of CCAT in support of Senate Bill 178. At its core, this issue is about whether Coloradans can afford to stay healthy. We know that when people have access to affordable health insurance, they are more likely to seek preventative care, manage chronic conditions, and avoid costly emergencies. That benefits not only individuals and families, but also our broader health system and economy. It really benefits all of us. The health insurance affordability enterprises played a key role in making that possible. It has helped keep premiums from spiraling out of control and supported coverage for hundreds of thousands of Coloradans. But today, their progress is at risk. We are already seeing the effects of federal decisions that have reduced support for affordability programs. Without a state response, many families will face steep premium increases, some by hundreds of dollars a month. For many, that simply isn't sustainable. When people lose coverage, the impacts don't stop with them. It affects hospitals, clinics, and local governments that are left to fill the gaps. It leads to higher uncompensated care costs and strained systems that are already stretched thin. Senate Bill 178 is about preventing that outcome. It provides a bridge to maintain coverage and affordability while we continue to work toward a more durable long term solution. We recognize that no single approach is perfect and we share the goal of ensuring long term sustainability, but the immediate need is clear. We must act now to protect coverage and prevent disruption. Colorado has come too far to lose this progress. Thank you for your consideration and your commitment to keeping Coloradans covered. Happy to stay around and answer any questions. Thank you. Commissioner Marlin. I'm sorry, Martin. I thought it was Marlin. I thought it was Marlin. It's on the sheet of Martin. I apologize. All good. Thank you. And good afternoon, Madam Chair and members of the committee. My name is George Marlin, Clear Creek County Commissioner. speaking on behalf of CCAT and the residents we serve, many of whom are already struggling to afford the health care system we have today and are deeply exposed to what comes next if costs continue to rise. Counties sit at the center of our health care system. We see what happens when coverage becomes unstable or unaffordable. As employers, we're facing rising health care costs that continue to outpace our budget constraints. As partners in administering public programs, We see working families who rely on the individual market and are now bracing for significant premium increases. And throughout our public health departments, EMS services, and in some cases, county-supported hospitals, we are the providers of last resort when people fall out of the system. As my colleague said, the health insurance affordability enterprise has been and can continue to be part of the solution to this problem. We know there are important long-term conversations about how to find a long-term funding structure. We urge you all to accept a one-year solution that keeps this program in place. We worry deeply for what happens to the system after HR1 without this enterprise in place. I am modifying my testimony to save you all some time, and so I will wrap up just by saying that when everyone in the system pays what they can afford, we can build a system that everyone can afford Thank you for your time Please vote yes and I welcome any questions Thank you Please hold for questions Commissioner Porter Norton Yes can you hear me You can Thank you My camera isn working today So Madam Chair and members of the committee, I thank you for allowing me to testify. I'm a La Plata County Commissioner. I live in Durango, and I am representing CCAT in support of Senate Bill 178. In rural and rural resort communities like mine, access to health care is not just about affordability. It's about whether care is available at all. We are operating in environments with fewer providers, long travel distances, and health systems that are often financially very fragile. Even when a small number of people lose coverage, it can have an outsized impact on the viability of all local health care, hospitals, emergency services, clinics, and the like. When people lose insurance, of course, they don't stop needing care. They delay it. And in rural communities, that delay often means traveling farther, waiting longer, and arriving sicker, which is more expensive for everybody as we know. The health insurance affordability enterprise has helped stabilize that reality by making coverage more attainable. It has supported more consistent patient volumes, reduced uncompensated care, and helped keep rural providers afloat. In communities and counties like mine, that stability can make the difference between keeping a type of healthcare service line open or losing it. Excuse me. This bill is about protecting access to care in places like where I live, like I said, where it is already fragile. It helps maintain coverage and stability. And without action, we risk more uninsured residents and more costs for everyone. I really appreciate the students that were here today talking. I think they told stories that are important for all of us to keep as we think about how to have a longer term solution. Thank you again. I know you've all had a very long day. I urge your support for SB 178 and I will take any questions. Thank you. Thank you. Commissioner Pogue, you're up next. Thank you, Madam Chair, members of the committee. My name is Tamara Pogue. I'm a Summit County Commissioner. I'm here today to testify in a support position on SB 178 as the chair of CCAT. Since our inception, CCAT has been deeply engaged in advancing thoughtful health care policy in Colorado. Our organization has supported major efforts to expand access and improve affordability, from the creation of the reinsurance program to ongoing work around the individual market and coverage stability. We've consistently shown up in these conversations because counties see every day how critical affordable health care coverage coverage is to the well-being of our residents and the stability of our local systems. The coverage supported through the health insurance affordability enterprise has made a measurable difference in our communities. It stabilized premiums, reduced the number of uninsured Coloradans, and ensured that more people can access care when they need it. That stability matters, especially in rural and mountain communities like mine, where options are already limited and costs are often higher. But that progress is fragile. With the loss of federal support and rising costs, we are at a tipping point. Without action, we'll see premiums rise sharply, coverage decline, and more pressure placed on local providers and safety net systems. This bill represents an important step to prevent that backslide. It helps us maintain coverage in the near term and continue the conversation about a long-term sustainable solution. And that's critical because while we recognize concerns with any financing approach, doing nothing will cost our communities more. From a county perspective, the stakes are simple. When people lose coverage, costs don't disappear. They shift. They show up in our emergency rooms in our public health systems and in our local economies Colorado has been a leader in expanding access to care SB 178 helps to ensure that we don lose that progress Thank you for your time and consideration. I respectfully ask for your support, and I'm happy to answer any questions. Thank you very much. Please hold for questions. Commissioner Loachman. Thank you. Buenas tardes, Madam Chair and members of the committee. and I also want to say it's so great to see some CCAT colleagues from around the state. My name is Marta Lochemin. I'm a Boulder County Commissioner testifying also in support of SB 178 on behalf of myself, my fellow commissioners, and Boulder County. We're grateful to the Senators Mollica and Jode for working diligently to bring this bill forward. As an elected official in Colorado, I'm committed to ensuring for my constituents access to health care and to care. For community members who are contractors, gig workers, small business owners, as well as individuals with limited coverage options, the health insurance affordability enterprise is not only essential, but in some cases, it's the only option. Here in Boulder County, bilingual and bicultural health coverage guides assist hundreds of people in enrolling in health insurance coverage each year. And without this bill, people in Boulder County and thousands of people, as you've heard, across Colorado could lose coverage, including more than 3,000 people that get their coverage from the state's Omni Salud program. Right now, our country feels in crisis. Today, we're hearing about removal of voting rights. In Boulder County, we continue to be concerned about wildfire risks. And I'm here with a gentle reminder. Throughout Colorado, health care coverage can't be a luxury. Healthcare coverage allows people to get necessary prevention and medical treatment. And I just want to share with each of you that previous to this role of where I am sitting today, I was a single mother and I was self-employed for many years. I had a few jobs, but none of them provided affordable health care for me and my two sons. I was forced to choose paying our housing and basic needs. At that time, I could not financially commit to health insurance and I did not have that money up front every month. And so our health plan was like so many other Coloradoans. It was the emergency room plan. And that is not sustainable, and it is not a cheaper option. Coloradoans need your help to continue to access health care. Boulder County respectfully request your yes vote today. Thank you. Members, we have questions for this panel. Thank you all for hanging out so long to testify before us today. We really appreciate you taking the time. Have a wonderful afternoon evening at this point. Okay, we're going to call up our last panel. Josh Hannes, Katie Ryan, Monica Van Buskirk, and Michael Conway. Okay. I think Mr. Conway wants to go last, so ma'am, if you wouldn't mind introducing yourself. You have two minutes. hello committee and thank you madam chair my name is monica van buskirk i am a small business owner with clients all over the country when i started my business i was able to take on the risk of a new venture because i had subsidized health insurance through the exchange so this state investment a healthy person was able to bring in income from multiple other states that i use here in Colorado. It just so happens that my business can't be here, including how health insurance companies are built. And while today's discussion has been about a very small part of this, we are not discussing or scrutinizing numbers. It increases because mortality complications. We're a little bit less. Or when a health insurance company takes on a PN, and their drug cost increases. Actually, if you don't mind pausing, we're going to switch out that mic. It's being a little bit weird. Thank you. All right, can you hear me now? Please continue. So we're not scrutinizing these other things that are increasing premiums every year, depending on decisions that insurance companies make, because we leave that to the expertise of DOI during rate review. And that trust in expertise on behalf of Coloradans like myself should also be true today. I also happen to have some of this expertise because I'm the former chief policy officer for Connect for Health. And if you listen to nothing else today, please hear that the premiums we are talking about are not what the vast majority of people pay every month. Federal subsidies that come into the exchange are complicated in how they are calculated, but they number in hundreds of millions of dollars. Connect for Health is the only entity that knows what customers are paying because they calculate those tax credits. So if you are looking for accurate data about what the final cost when subsidies are included, look to Connect for Health for that source of truth as they have been for you for years. With that, thank you for listening to a small business and to experts on costs of care. I urge you to vote yes to keep the market stable and affordable. Thank you. Sir, please introduce yourself, and you have two minutes. Thank you, Madam Chair and members of the committee. My name is Josh Hannes, and I'm the Vice President of Rural Policy and Strategy at the Colorado Hospital Association. I want to start quickly by thanking the sponsors for prioritizing access to affordable health coverage, and we are here in support of this legislation. You've heard from a number of people already about the consequences of not having access to coverage. They'll end up in hospital emergency rooms, often sicker, driving up costs across the system, and that leads to worse outcomes for the patients. And so that should be kept number one, the patient's perspective and the negative consequences of that. And we've been seeing this lack of coverage across Colorado since the public health emergency with the Medicaid unwind, and we're also staring down the coming impacts of H.R. 1. I do want to talk a little bit about and put into context what you've heard about uncompensated care and the costs on hospital systems, and certainly particularly around our rural hospitals who feel this pain most acutely in our safety net hospitals. So since 2024, charity and uncompensated care have increased by $56 million, about a 17% increase. Compared to 2021, that's a $208 million increase, or 112%. This represents care delivered without reimbursement, and again, the strain is felt most acutely in our rural and safety net hospitals. Meanwhile, and we should be clear about this, insurance companies have nothing that goes uncompensated, and insurance premium increases far outpays hospital cost price increases over the last 10 years or so. The health insurance affordability enterprise is one of the most effective tools we have to prevent further coverage loss. It directly offsets rising premiums and keeps coverage within reach for families in Colorado. This legislation strengthens that tool, granted in a short period of time, and it helps maintain coverage, stabilize the market, and reduces growth in uncompensated care that threatens hospital sustainability once again, especially in rural Colorado. So I appreciate the time. I know it's been a long day, and I'm happy to answer questions. Thank you. Ms. Ryan, I presume? Yes thank you Madam Chair members of the committee Katie Ryan on behalf of Denver Health today here to testify in support of Senate Bill 178 We appreciate the bill sponsors for their continued work and stakeholding on this timely and important issue As we all know, Congress did not renew the premium subsidies earlier this year, which has created a larger uninsured population at a time when the safety net can least afford it. These federal premium subsidies were a crucial tool to help keep the cost of health insurance more affordable for Americans, particularly from marginalized populations. The passage of HR1 puts Denver Health's future in an unprecedented state and we need to protect as many of our patients from losing health insurance coverage as possible. Bolstering the state's health insurance affordability enterprise has never been more important. This issue is significant to our health system but also to Denver Health Medical Plan as we ensure Coloradans through Connect for Health Colorado and OmniSalud. We also understand that this is another temporary solution but it's critical to continue negotiations for a longer-term fix. Denver Health will continue to be at the table as a stakeholder for any future conversations in this area, but for today, this is the right solution to keep health insurance as affordable as possible in Colorado. Thank you, and I'm available for any questions. Thank you. Commissioner Conway. Thank you, Madam Chair, and thank you, Committee, for having us here today. My name is Michael Conway. I'm the State Insurance Commissioner. I'm here to testify in strong support of Senate Bill 178. So, Madam Chair, I heard you over and over again that you want us to say ditto as much as possible, so I'm going to do that for everything that you've heard from the supporters today. But I want to call out a couple of things. Obviously, there's a bit of a deja vu moment here, folks, that I was sitting in front of you all about eight months ago asking you to vote for a bill that was going to be a one-year solution. And we told you that it was going to give us time to find a long-term solution. And we're back here again asking you to vote yes, urging you to vote yes on another one-year solution so we can continue to find that long-term solution. So it's not the ideal conversation. It's not the ideal conversation that we wanted to have, but it is going to give us the time to make sure that we do find a solution that works for as many people as possible. The other component that I want to make sure that we tease out is to respond to some of the concerns from earlier about the impact of this bill and the impact of the enterprise more broadly. So this enterprise, its core purpose is to provide stability for the insurance market as a whole. And that's what it does. By providing stability in the insurance market, we do impact the individual insurance market. We have direct impacts on the rest of the commercial market. Let me tell you very briefly why that's the case, Madam Chair. So when I was here eight months ago, I told you that because of the federal government's failure to act, we were going to lose about 110,000 people in the individual market. I told you that I thought that the House Bill 1006, the bill that you heard during the special session, was going to keep 25,000 to 30,000 of those folks covered. I was wrong, folks. It kept 70,000 people covered. That means that 70,000 people would have lost coverage if you had not done what you did in House Bill 1006. That means that 70,000 people would not have just been uncompensated care for hospitals. It would have been lost revenue for hospitals as well. That means that those costs would have been transferred to the rest of the commercial market. And I know I'm at time, Madam Chair, so I would be happy to answer any questions. I would love to get in to cover Colorado with folks to provide a little bit of history on how that has worked for the state as well. Thank you very much. Members, do we have questions for this panel? Senator Kirkmeyer. Thank you, Madam Chair. Yes, Mr. Conway, I'd like to know a couple of things here. Do you intend to include stop insurers in the million fee Mr Conway I mean Commissioner Conway Mr Conway Mike whatever is fine Madam Chair Thank you very much Thank you for the question Senator So I believe that the structure of the bill as it exists now that the terminology in the bill would not include stop-loss covered lives. I think that's correct. I think that there is an intent to make sure that, as you heard some of the testimony earlier today, Senator, that there is an intent to make sure that all five of the biggest insurers in the state are part of the solution here. I also think, and it gets to the Cover Colorado piece that I was just touching on, because I think it's relevant to your question, Senator. So Cover Colorado was a program that was in place from the early 90s all the way through when the ACA came on board. And its intent really was to provide coverage for the highest-risk Coloradans in the state to make sure that we were able to keep them covered and not have the costs of those highest uninsured folks be passed through to the rest of the market. The fee structure for Cover Colorado, Senator, was broad-based, and it did include stop-loss. So I don't know that we're here today to have a conversation about including stop-loss coverage for an increased fee base, but I do think that there is long historical precedent in this state to recognize two things. One, that you can include the stop-loss market as part of a fee, but maybe even more important than that, Senator, that because when you actually do make sure that people have coverage, it has that direct impact, that broad-based direct impact across all of the health insurance market, including the stop-loss portion of the market. Senator Kirkmeyer. Thank you. Thank you, Commissioner. I'm not going to say whatever because that's what you said we could call you, but I'll call you Commissioner Conway. So I just want to make sure, though, Do you believe that the bill is broad enough that you could, as a division through rulemaking or whatever, include stop-loss insurers? Commissioner Conway. Thank you, Madam Chair, and thank you for the question, Senator. No, the term that's used in the bill does not include stop-loss coverage today, but like I said, I believe the intent is to make sure that the top five insurance companies are part of the solution moving forward. Okay. Commissioner, I mean. Thank you. I was a commissioner. I know you were. Senator Kirkmeyer. Yeah. So what is a long-term solution? Commissioner Conway. Thank you, Madam Chair. So, Senator, as I tend to say, I don't get to have opinions about legislation until my boss tells me what my opinion is. So I don't know that I have a direct answer for you as we sit here today. I think from a fundamental standpoint, there are some basic common sense components that can go into that long-term solution, and it's the folks that are going to benefit from the programs, right? It's the health insurance companies, namely. But there's other players in the healthcare ecosystem as well that do benefit from these programs. Finding that right solution, finding the right give and take, that's exactly what was attempted to be done in this last interim. I think the difference is that because we will have a full interim, right, not just what we had after the special session, there will be more opportunity to actually find that solution. And candidly, Senator, I don't know that there are a lot more one-time solutions that are out there to work. So I do think that we're at the place where we have to force that conversation. Thank you. Other questions for this panel? Senator Kolker. Thank you, Madam Chair. Thank you all for coming. The question I have for Commissioner Conway, how is this legal to do these bonds? I mean, as a state, we're not supposed to go into debt. How are we issuing bonds from an enterprise How is this legal Commissioner Conway Thank you Madam Chair and thank you Senator for the question I think the answer to your question is actually in your question itself. It's because it is an enterprise. And I think to get to the conversation about the enterprise and how the bond is going to work, because I know that there's a lot of conversation. There were a lot of questions about that earlier. So, Madam Chair, if it's okay, if I could just jump into that just to get it over with quickly. So, as Senator Mullica touched on in his opening statement, the bonds will be secured by the funds that are coming into the enterprise on a yearly basis. So, as we sit here right now, that's roughly $140 to $150 million in ongoing fees that we'll utilize to secure the bond. But on top of that, this bill does directly have the component in it now that insurance companies will be able to contribute a portion of contribution of their premium tax credit donation to the enterprise rather than Connect for Health Colorado to increase the ability for us to be able to make the payments on the bond. But to your direct question, Senator, the reason that we can do this is because it's an enterprise and the bonds themselves will be secured by those ongoing fees. Senator Kolker. Thank you very much. So the amount that's in the enterprise now is not enough to cover the bonding authority. Is that correct? I mean, that's why we're asking for the $40 million? Commissioner Conway. Why can't we just do $140 million in bonds? Commissioner Conway. Thank you, Madam Chair, and thank you, Senator. So why we can't do the $140 million in bonds, I think that could be part of a conversation. I think the key, though, Senator, is that in order to make sure that we have enough revenue to market the bonds and make sure that an entity is going to come and purchase those bonds, we need to have more money, from my understanding, coming into the enterprise, securing those bonds than the amount that we're bonding itself. So if we're going to go all the way up to $140 million, we would need more capital coming in on a regular basis than we have in the current fee structure. That's why the $100 million bonds, when we have $140 million coming in on an annual basis, works, and we think that we will be able to market those bonds. Once we get closer to the amount that we're bringing in every year, I think it could make those bonds less marketable. Senator Kolker. We're at a point where we could cut costs today, or we're going to have to cut costs next year. I made this comment before is that we're creating bonds, taking a loan to pay for our costs for this year, but we don't know where we're going to be next year why aren't we cutting costs this year, what's holding us back in the reinsurance especially say the reinsurance market what is the problem today because we do have I asked the question about the reserve if this is an emergency, to give us time to figure out how to make this cuts more permanent. What is the problem today? Commissioner Conway. Thank you. Thank you, Madam Chair. So I think there's two components to that, Senator Kolker. So if you're making cuts to these programs today, right, what you're fundamentally doing is you're making a choice that you're going to cover less people. There will be people that lose their coverage because the programs are cut. Now, the flip side of that coin is that we can figure out ways to find savings in the underlying costs of healthcare. That absolutely was part of the conversation. Senator Mullica put things on the table with the plans to try and figure out a solution along those exact lines. Let's have a conversation about the underlying costs of health care. Let's figure out ways that we can find cuts to those underlying costs of health care so that maybe we don't need the full $140 million. That's part of the conversation that I think this bill will give us the opportunity to continue and find those right solutions. I just don't think that there was enough time in the end term, in the shortened end term, this session, to really kind of really robustly figure those kind of components out. But you're right, Senator. there has to be a conversation about finding ways to control the cost of health care so that we can make these programs more affordable. Thank you. Seeing no further questions. Oh, Senator Kirkmeyer. Oh, and Senator Frizzell. Do you want to let her go first? I already asked a couple. Senator Frizzell, why don't you go first? Sure. Thank you. This is for Mr. Conway. So we've heard from the insurance carriers about the $40 million fee being applied equally regardless of market size. And some are great with it. Some are not great with it. It just depends on who you talk to. But with the announcement of Cigna exiting our market, how does that affect the $40 million being apportioned equally between providers? Commissioner. Thank you, Madam Chair, and thank you for the questions. Center, I'm really glad that you asked that question because it gives us the opportunity to clarify what is actually happening. So Cigna is not leaving the market. Cigna has made the choice to no longer offer plans in just the individual market nationwide, but they will still be offering plans in the small group market, the large group market, and the ERISA market. And that gets back to what I was talking about earlier, Senator Frizzell, that this enterprise does provide direct benefit and impact for those markets because it keeps the commercial market as a whole stable. And it keeps the commercial market stable so that you don't have uninsured costs being transferred out to the rest of that employer-based market. Can I follow up? Thank you. Senator Frithell. Thank you. Okay, so I do appreciate that clarification. But we heard earlier that the individual market tends to be more volatile. And so if we have a carrier who is leaving that portion of the market, what is that going to do with to the individual market as a whole. Commissioner. Thank you, Madam Chair, and thank you for the question, Senator. So the good news is that we have another carrier coming into the market next year, and we had an additional carrier come into the market two years ago. So it is true that the individual market, because it's still a relatively new market, right, it's only been around for all intents and purposes about 11 years. We're in our 12th year. and insurance companies have dealt with a large amount of fluctuations over that period of time. The biggest one being, Senator, last year, or this year rather, the loss of the federal enhanced subsidies. I don't think, it's not just Cigna that is making choices to pull out of the individual market across the country. That is happening with a number of insurance companies, whether they're pulling back or pulling out of the individual insurance market. And it's exactly what we warned about, Senator, that there were going to be huge ripple effects from the federal government's failure to act. that's what we're seeing now the difference is you all stepped up you all stepped up last year over the interim with house bill 1006 and we're able to create as much stability as possible in our market but Cigna's making decisions at the national level right they're making decisions at the national level because of the impacts that are happening at the national level so unfortunately what we thought was going to happen with those ripple effects are happening

I don't believe it's going to impact the state plan, the fee itself on the state plan, but let me make sure I hadn't thought about that question, Senator. Usually I do think about questions that are going to come my way, and that one just slipped my mind. So let me think about it and get back to you. All right, and then I do have another question. Commissioner Kirkmeyer.

I mean, Senator Kirkmeyer. I am getting so confused.

Thank you.

Commissioner Conway.

And then if I may.

That's okay.

And then some previous folks on panels testified about the ability to charge a premium for Omni Salute and that it's going to take some modeling, take some time. I appreciate it. I really do appreciate your comments. So I want to know, is that something that you can help figure out, and can you do that without additional FTE?

Thank you, Madam Chair, and thank you, Senator, for those questions. Yes on the second one. On the first piece of it, on the first piece. So the first bill, the original bill that set up what we now refer to, part of which was set up what we now refer to as Omni-Salud, that bill specifically prohibited the Omni-Salud program from having any premium. We changed that in the bill over the special session, in-house Bill 1006, and we opened up the ability for Omni Salud enrollees to pay premium. It was, again, a conversation that because we passed that bill so late in the year and Connect for Health Colorado was already building out their systems, already had their systems built, they didn't have the ability to actually build out that part of the system to include the ability to pay premiums. I do anticipate that that will be, again, part of the conversation with the Health Insurance Affordability Enterprise Senator and, very importantly, with the community itself to get their feedback and understanding, but it will be because we now have the ability that law has changed, I do think that it will be part of the conversation.

Senator Mullica. Thank you, Madam Chair. I move Amendment L-001.

Thank you, Madam Chair. This is a four-and-a-half-page amendment. This is in response to some of the feedback that we received from our colleagues in regards to using UPTF and is changing that to bonding from the enterprise which has been talked about extensively today And so this is what that amendment does Thank you Do we have questions concerns about this amendment

Senators Benavides.

No.

Polker.

Mullica.

Snyder.

Marchman. Aye. Madam Chair. Yes. Six to three, L01 is adopted.

Thank you. That's a proper motion. Senator Judah, tell us about it.

Why don't you pull up a different one?

Any one, Mike.

Just not that one. I thought I heard it as well.

Thank you. Is there any concerns, questions about L03? Is there any objection to L03? Seeing none, L03 is adopted. Do you have any further amendments? Committee, do you have any further amendments? Seeing none, the amendment phase is closed. Let's close. Who would like to go first?

Thank you.

Thank you. Members, comments?

Thank you.

So thank you.

Thank you. Raise my own hand.

So with that, Senator Mullica.

Ms. Rita Bush, will you please take the roll?

Yes.

No.

No.

No.

Yes, for today.

Yes.

Yes, for today.