Democrats said that the decision clears the path for Colorado's health plans and that Colorado more than other states would have been tripped up if the health law had been axed.
State lawmakers last year created the Colorado Health Benefit Exchange, which forms a virtual marketplace to allow individuals and groups the ability to purchase health insurance at discounts like those in larger risk pools. About 13 percent of the state, or 656,000 state residents, had no health insurance as of 2011, according to U.S. Census estimates.
Colorado's exchanges are expected to launch October 2013. The U.S. Supreme Court's ruling gave clarity to the implementation of the exchanges, which could have been thrown in disarray if the federal law was struck down in its entirety.
"It affirms what we have been doing all along in moving forward with the exchange," said Democratic Sen. Betty Boyd, one of the architects of Colorado's exchange.
Gov. John Hickenlooper said the ruling "simply keeps Colorado on the path toward reform we've been on."
Ten states and the District of Columbia have passed insurance exchange laws to establish exchanges, according to the National Conference of State Legislatures. The idea of creating something similar to an exchange was broached in Colorado in 2008 by a panel studying health care reform, long before Congress passed a law.
Republican Attorney General John Suthers, who was among the attorneys general challenging the health care law, called the ruling "extraordinary and unexpected."
Justices in the 5-4 ruling upheld virtually all of the law's provisions, including the divisive individual mandate, saying it can be construed as a tax allowed under the Constitution.
"I think this bill would've never passed if they had said, 'Oh we're going to tax everybody who doesn't buy health insurance. It's just the nature of politics in America," Suthers said.
Suthers said the debate now moves to the "political arena," where he believes it will become more volatile in the presidential election.
Republican Rep. Bob Gardner, the chair of the legislative panel overseeing implementation of the exchange, agreed with Suthers that Colorado was wise to implement the insurance exchange.
"I think that Colorado did the right thing by having a mechanism to do its best to impose a Colorado solution," he said. But Gardner said he was outraged by the ruling that the individual mandate can be interpreted as a tax.
"They have hoodwinked the American people," he said.
Republicans saw a bright spot in the ruling regarding Medicaid expansion, where the court ruled the federal government can't withhold states' entire Medicaid allotment if they don't take part in the law's extension. Colorado's GOP has criticized fast-growing Medicaid spending and called for Colorado to buck the federal government to trim costs.
Hickenlooper said Thursday that it was too soon to say whether Colorado would raise income caps for adults without children who receive Medicaid.
"We're certainly looking at it and trying to figure out a way to do that and still live within our means," he said.
Health care activists who backed the health care law said Colorado is in better shape because it was upheld.
Dede de Percin, executive director of the Colorado Consumer Health Initiative, said Colorado was ahead of the federal government on many of the new law's provisions, not just the exchange and expanded Medcaid eligibility but also on laws about preventive screenings and new guidelines for medical underwriting.
"There's been a lot of debate about the law, and I think now it's time for us to get together and move forward," de Percin said.