The Budget Reconciliation Package, formally titled the One Big Beautiful Bill Act (OBBBA), passed and was signed into law by the President in the first week of July, leaving many concerned about its projected impacts on children and families. We at Illuminate Colorado are diving into the bill’s final provisions to understand how they impact Colorado children, families, and those who serve them.

The Strengthening Families Protective Factors and OBBBA

At Illuminate, we recognize the vital role of federal programs in promoting the Strengthening Families Protective Factors:(1)

• • Parental Resilience
  • Social Connections
  • Knowledge of Parenting & Child Development
  • Social & Emotional Competence of Children
  • Concrete Supports

Programs, such as SNAP and the Child Tax Credit, serve as evidence-based concrete supports, ensuring families have access to basic food and nutrition and financial supports, while other programs like Medicaid, CHIP, and premium tax credits for marketplace health insurance plans increase access to healthcare, which plays a role in promoting all five of the protective factors.(2) Although OBBBA made several updates that could promote protective factors, the bill largely made cuts to vital programs and instituted more intensive requirements that decrease access to needed supports and harm children and families.

Learn more about our guiding frameworks and the Protective Factors here.

Cuts to Programs that Enhance the Health and Wellbeing of Children and Families

Unfortunately, OBBBA cuts funding and institutes more intensive eligibility criteria and verification requirements that decrease access for several federal programs that strengthen families.

Medicaid and the Children’s Health Insurance Plan (CHIP)

As passed, OBBBA will result in over $1.02 trillion in cuts nationally to Medicaid and CHIP between federal fiscal year (FY) 2026 and 2034. The bill establishes work requirements for the Medicaid expansion population (adults under age 65 with an income above 100% and at or below 147% of the Federal Poverty Level), requiring redeterminations for Medicaid members in this population every six months. These requirements will go into effect on January 1, 2027. Exemptions will exist for certain populations, including children, parents and caregivers with custody of a child under the age of 13, and those who are pregnant.

In Colorado, 75% of adult Medicaid members are already working, 13% of Medicaid enrollees are adults age 65 + or are disabled, and 36% of Medicaid enrollees are children.(3) Of the 25% of adult Medicaid members who are not working, some will qualify for exemptions to requirements.

OBBBA also reduces retroactive coverage from three months to one month. Under this reduction, Medicaid members would only have coverage for services received one month before Medicaid approval, greatly reducing retroactive coverage.

The Colorado Department of Health Care Policy and Financing expect more intensive eligibility requirements, reductions in retroactive coverage, and other Medicaid-specific components of the bill will result in many direct and downstream consequences, including: (4)

• • An estimated increase of at least $57 million in unfunded administrative state costs to implement work requirements
  • An estimated increase of 3,700 new case workers needed to implement Medicaid work requirements, nearly doubling the current number of county caseworkers in this role.
  • Loss of Medicaid coverage for 116,000K-193,000 Coloradans
  • Unpaid claims for providers
  • An increase in uninsured Coloradans
  • Reduced state revenue to cover the costs of care for uninsured Coloradans and unpaid claims
  • Health care facility and hospital closures, especially in rural areas that have higher rates of Medicaid members
  • Lay offs within Colorado’s healthcare workforce
  • Reduced capacity to serve the healthcare needs of Colorado children, individuals, and families regardless of insurance coverage

Premium Tax Credits for Health Insurance

OBBBA also cuts $193 billion nationally through FY2034 by restricting premium tax credits, which subsidize the cost of marketplace health insurance plans to individuals who are not eligible for Medicaid and do not receive employer-sponsored health insurance. The bill makes those who enrolled in a marketplace plan during a special enrollment period ineligible for premium tax credits. In addition it requires enhanced verification of eligibility factors, such as household income, documentation status, place of residence, and family size.

Connect for Health Colorado and other healthcare policy experts project that increased administrative burdens and restricted eligibility requirements will likely result in direct and downstream consequences, including: (5)

• • An estimated loss of $620 million in premium tax credits to Coloradans
  • Loss of health insurance coverage for an estimated 112,000 Coloradans (43% of those currently enrolled in marketplace plans) who are unable to afford health insurance without the support of tax credits
  • Increased costs to states who must implement verification requirements
  • An increase in uninsured Coloradans
  • Reduced revenue that covers uninsured Coloradans and unpaid claims
  • Health care facility and hospital closures
  • Lay offs within Colorado’s healthcare workforce
  • Increased barriers to access to needed healthcare services for children and families

Supplemental Nutrition Assistance Program (SNAP)

OBBBA also cuts the federal SNAP budget by $186 billion nationally through FY2034. To accomplish these cuts, OBBBA removes exemptions to work requirements for veterans without a qualifying disability, people experiencing homelessness, former foster youth aging out of the system, and adults ages 55-64. In addition, it institutes a time limit on benefits received by parents with children ages 14-17 who do not fulfill the work requirement under the exemption. Under OBBBA, many immigrants, including refugees and asylees, will no longer be eligible for SNAP due to narrowed eligibility criteria.

The bill also eliminates the SNAP Education program, which funds cooking, grocery shopping, nutrition, and other skillbuilding classes for low-income individuals, children, and families.

Experts project that OBBA will result in:(6)

• • Loss of some or all SNAP benefits for 298,000 Colorado families
  • An average cut in SNAP benefits of $49 per month for 49,000 families with children
  • $175 million in new, unfunded Colorado state costs

Increases in Tax Credits for Families and the Professionals Who Serve Them

Although OBBBA makes unprecedented cuts to vital family strengthening programs, the bill made updates to several tax credits that will likely have mixed impacts for Colorado children and families.

Child Tax Credit (CTC)

OBBBA makes several updates to the Child Tax Credit that will result in increased benefits for some families and a loss of access for other families. The bill extends the CTC by eliminating an end date to the refundable and nonrefundable CTC, increases the non-refundable credit amount to $2200 (a $200 increase), and requires cost-of-living adjustments to the credit amounts.

However, the bill also requires that a family claiming the credit provide the Social Security Numbers of at least one caregiver with custody and the child. Although not explicitly named in the bill, this excludes many lawfully present families from receiving the federal CTC, creating a barrier to this evidence-based financial wellbeing support for many.

Additional Updates to Tax Credits & Exemptions

OBBBA also updates several federal tax credits that can be claimed by businesses, employers, and family-serving professionals, including:

• • Increasing the Child and Dependent Care Tax Credit
  • Increasing and expanding the Employer-Provided Childcare Credit
  • Extending, updating criteria, and increasing opportunities for employers to claim the Paid Family and Medical Leave Employer Tax Credit
  • Increasing allowable exemption amounts under the Dependent Care Assistance Program

Fiscal Responsibility and Prioritizing the Health and Wellbeing of Children and Families

Although many of the cuts and updates to federal programs that strengthen programs were framed as fiscally responsible, it is important to note that the fiscal and social costs of OBBBA are more complex than simple budget cuts. Many of these cuts will directly and indirectly result in increased costs to states, shifting the cost burden to Colorado taxpayers. The downstream consequences of Medicaid work requirements, cuts to health insurance premium tax credits, and cuts to SNAP will likely result in family entrance into other more costly systems, such as child welfare and emergency healthcare, due to reduced access to the supports and care needed to remain healthy and well.(7) Although enhanced eligibility criteria and verification requirements, including those associated with Medicaid work requirements, may seem like cost-saving, fraud-busting measures, they can do more harm than good.(8)

Recognizing the direct and downstream impacts of these policies, as included in OBBBA, the reduction in federal costs will result in immediate increased costs to states, harms to children and families, and longer-term federal and state costs resulting from downstream consequences.

Moving Forward with Gratitude, Creativity, and Hope

We at Illuminate Colorado are grateful for the collaboration, energy, and countless hours our partners in prevention dedicated to educating our Colorado Congress members about the impact of proposed cuts and the importance of federally funded family strengthening programs. We were proud to co-author two letters alongside The Kempe Foundation, supported by additional organizational partners, which reached all Colorado Congress members and highlighted the role of these programs in strengthening Colorado families and preventing child maltreatment. In addition, we signed onto several letters authored by our state and national partners and engaged our Colorado Congress members on numerous occasions.

Moving forward, we will lead with creativity and hope, continuing to educate our Colorado Congress members on the vital role of federally funded family strengthening measures in preventing child maltreatment. In addition, we will collaborate with our local, state, and national partners, lived experience experts, and research partners to understand the impact of OBBBA’s policy changes and consider creative, responsive next steps to protect the health and wellbeing of Colorado children and families.

Want a place to come together with others to navigate these changes to our field? Join the initial Keeping Families Strong Town Hall hosted by the Colorado Partnership for Thriving Families on August 4th from 10-11am. This town hall (planned to be a monthly series) aims to bring the early childhood family-strengthening field together to navigate the federal funding changes by identifying emerging needs and getting creative about addressing those needs.

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At Illuminate Colorado, we work across systems to strengthen families and prevent child maltreatment. One integral piece of this work is advocating for children and families under the dome. This Colorado state legislative session, which ran January through May, we worked alongside our partners in prevention to promote policies that strengthen families by defending funding for family strengthening programs and engaging with legislators and partners on long term strategies to build and maintain the foundations for families to thrive.

Rooting in Protective Factors and Our Policy Priorities to Strengthen Families

At Illuminate, we recognize the importance of making policy decisions rooted in evidence. The Strengthening Families Protective Factors are one of the guiding, evidence-based frameworks that guides our policy work.

Strengthening Families Protective Factors

• • Parental Resilience
  • Social Connections
  • Knowledge of Parenting & Child Development
  • Social & Emotional Competence of Children
  • Concrete Supports

Learn more about our guiding frameworks and the Protective Factors here.

At the end of 2024, Illuminate engaged in an intensive process to establish our 2025-2028 Policy Priorities. Although the policy and political landscape may shift and change over time, we recognize the importance of remaining rooted in our long-term priorities, which are more important now than ever.

2025-2028 Illuminate Policy Priorities

• • Advance an aligned and comprehensive family strengthening ecosystem
  • Establish clear and family-centered systems of support for families with infants in order to ensure Colorado infants have the best start possible
  • Foster family financial wellbeing and independence by increasing pathways to economic security for families
  • Promote strengths-based information and support for families impacted by substance use including those impacted by Fetal Alcohol Spectrum Disorders (FASD)
  • Establish and connect long-term funding pathways to sustain and scale Illuminate Programs

Interested in learning more about our policy priorities? Dive deeper here.

Navigating a Complex Policy Landscape

This state legislative session, the Colorado General Assembly (state-level Representatives and Senators) were met with many challenges that impeded their ability to introduce and pass a wide array of measures that promote family strengthening. These challenges included the state budget deficit, enhanced and time-intensive focus on federal action, and the introduction of many new legislators.

As many likely saw on the news cycle throughout the past five months, Colorado is experiencing a substantial state budget deficit, with legislators needing to cut approximately $1.2 billion in state spending for the 2025-2026 state fiscal year. Due to the constraints that TABOR puts on state spending of collected tax revenue, increased cost of Medicaid, reduced spending of many Colorado households in anticipation of a recession resulting in reduced tax revenue, and fewer federal dollars entering Colorado due to the end of the public health emergency, legislators were not only unable to pass new legislation that would cost additional funds, but needed to cut spending within all state agency budgets. 

Colorado legislators also spent increased hours and capacity to respond to anticipated and actual actions made by the Executive Branch and Congress. This included intensive conversations focused on civil rights, healthcare and Medicaid, taxes, and state legal action and response, which resulted in many debates and the introduction and passage of several bills.

Finally, the Colorado General Assembly saw an influx of new legislators in the House and Senate, including throughout the session. This required many new legislators to learn the “how” of being a state legislator in the midst of the legislative session. New legislators expressed experiencing many challenges and opportunities in learning the positions, including building confidence, understanding the nuances of the legislative process, and developing collaborative and mentorship relationships with experienced, returning legislators across the political spectrum.

Defending Family Strengthening Programs

Due to the challenges experienced by the Colorado General Assembly to introduce and pass new legislation, and especially legislation that would require additional funds to improve, expand, or establish family strengthening programs, Illuminate’s focus and the focus of many advocates shifted to maintaining and defending proven programs at risk of funding cuts. Starting in November, Illuminate devoted our budget advocacy efforts to defending two programs at risk of funding cuts and elimination: Family Connects and Illuminating Child Care.

Family Connects is an evidence-based universal home visiting program designed to ensure every family with a newborn has access to strengths-based information, support, and resources. Currently implemented in Eagle, Boulder, Broomfield, Denver, and Jefferson counties, Illuminate serves as the state intermediary to support the planning, ongoing implementation, and evaluation of Family Connects in local counties and communities. In 2024, the Colorado Department of Early Childhood (CDEC) requested state general funds for a five year pilot to support expansion and cost-savings evaluation of Family Connects, which was unanimously approved by the Joint Budget Committee.

This year, Illuminate worked diligently to inform Joint Budget Committee (JBC) members of current implementation, preliminary results, and the need for maintained funding for Family Connects and Illuminating Child Care. We at Illuminate are celebrating the inclusion of these programs in the state budget package, which preserved 90% of ongoing state funding for Family Connects and made no changes to Illuminating Child Care funding, resulting in maintained ongoing funding for the program.

We at Illuminate are immensely grateful to our implementation partners, program ambassadors, and advocacy partners for providing stories, data, and information to Illuminate and JBC members to support ongoing funding for these influential programs. With this, we, alongside many of our partners in prevention, are disheartened by cuts to other important and integral programs.

Highlighting Our Partners in Prevention: Promoting Family Strengthening through Legislation

While not all good news in regards to the state budget, we at Illuminate are celebrating our partners in prevention who led initiatives to strengthen families. By covering a wide range of topics, from promoting increased opportunities for family strengthening programs to serve families to ensuring continued access to care, our partners led creative and collaborative policy conversations to create ongoing change and protect proven programs in an especially complex and challenging legislative session.

HB25-1204 Colorado Indian Child Welfare Act: Led by the Southern Ute Indian Tribe in collaboration with the Ute Mountain Ute Tribe and Navajo Nation, this bill repeals current reference to the Federal Indian Child Welfare Act from Colorado statute and reinserts this and additional protections as the “Colorado Indian Child Welfare Act” to promote long-term Tribal sovereignty, support indigenous families and children involved in child welfare, and promote Tribal practices and leadership in child welfare court proceedings. This bill will promote better outcomes for indigenous children and families by working to keep families together and children within their communities.

HB25-1279 State-Level Data for Colorado Works Program: Led by Colorado Children’s Campaign, this bill updates TANF data reporting requirements to ensure clarity of how TANF funds are spent throughout the state, understand outcomes of recent changes to TANF, and understand general outcomes of TANF spending. This bill will promote fiscal responsibility and data-informed decision making to ensure TANF, a concrete support, benefits families.

SB25-017 Measures to Support Early Childhood Health: Led by Healthier Colorado and Colorado ABCD, this bill codifies HealthyStart into statute to provide a clear mechanism and opportunities for federal, state, and local funding for the program. This bill will promote family strengthening by setting families with newborns up for success, promoting knowledge of parenting & child development.

SB25-290 Stabilization Payments for Safety Net Providers: Led by the Save Our Safety Net Coalition, this bill establishes a clear funding mechanism and opportunities for additional streams for safety net providers. This bill will ensure continued funding for safety net providers, promoting continued access to healthcare for families who are under- or uninsured, promoting parental resilience, knowledge of parenting & child development, and the social & emotional competence of children.

What’s Next?

Moving into the second half of the year, we at Illuminate are ready and inspired to continue to engage in policy efforts that strengthen families at the state and federal level. In the midst of complicated federal budget processes, we at Illuminate are coordinating with our national affiliates and advocacy partners to advocate for continued funding for programs, such as SNAP and Medicaid, that evidence shows strengthen families and prevent child maltreatment. In addition, we are partnering with our national affiliates to inform innovative policy concept development and advocate for the introduction and passage of policies that support Colorado families and those across the nation.

At the state level, Illuminate will monitor the implementation of bills passed this and past legislative sessions to ensure families and family strengthening advocates have a seat at the table. We will also monitor and engage with conversations or legislation arising from a special session this year, which the Governor may convene to address any decisions made by Congress to cut Medicaid funding to states. In addition, we will engage in stakeholder work to develop policy and practice recommendations and engage in thought leadership on policy concepts that strengthen families. Sign up to receive our Illuminate newsletter and email updates and follow us on social media to stay up-to-date with our policy work and learn about opportunities to get involved.

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