about 225,000 people received the enhanced subsidies<\/a>, according to the Division of Insurance.<\/p>\nAmong them is Colin Shadell, a Durango-based carpenter, husband and father of two young daughters. His family\u2019s monthly premium rose by about $400 at the same time they lost their federal subsidies, sending their costs from roughly $500 to $1,800 in a single month.<\/p>\n
\u201cThat was a huge blow,\u201d he said.<\/p>\n
Do you really want that pay raise?<\/p>\n
Federal premium tax credits \u2013 government subsidies that help offset monthly insurance costs \u2013 were introduced with the Affordable Care Act in 2014. They were temporarily expanded in 2021 during the COVID-19 pandemic and extended through 2025, eliminating the so-called \u201csubsidy cliff\u201d that had previously cut off assistance for households earning just over 400% of the federal poverty level.<\/p>\n
That change allowed some middle-income families to qualify for partial aid for the first time.<\/p>\n
Now, Colorado consumers buying their own insurance once again face \u201cthe cliff.\u201d Premium tax credits are now available only to people with incomes up to 400% of the federal poverty level \u2013 about $62,600 for an individual and $95,000 for a household of four, said Merida Short, health insurance broker and owner of J-Short Insurance in Durango.<\/p>\n
Families just $1 over that line lose all federal premium subsidies.<\/p>\n
There\u2019s this cliff, and if you go $1 over the cliff, no more tax credits,\u201d she said. \u201cIt\u2019s just another example of the squeeze on the middle class.\u201d<\/p>\n
The cliff is so steep that some clients are forced to think twice about promotions, Short said. She now explicitly asks people who are near the threshold to run the numbers before accepting a raise.<\/p>\n
\u201cIf you\u2019re that close to the cliff and you get offered a raise, it is worth calculating how much that raise will cost you,\u201d she said. \u201cIs the raise more than the subsidy you qualify for? Because if it\u2019s not, you\u2019re going to shoot yourself in the foot.\u201d<\/p>\n
In her view, the result is a system that can discourage earning more and push some middle-class Coloradans to go uninsured altogether.<\/p>\n
In January, Short said the most recent open-enrollment period was unusually difficult, with many clients losing assistance.<\/p>\n
\u201cI\u2019ve been doing this a long time, and this is one of the hardest open enrollments so far,\u201d she said.<\/p>\n
Shadell, in his late 40s, said he went without insurance for nearly half his adult life because he couldn\u2019t afford it. The ACA made coverage attainable for his family \u2013 until the enhanced subsidies expired.<\/p>\n
He describes his household as \u201csolidly middle class,\u201d earning just over 400% of the federal poverty level, roughly $95,000 for a family of four.<\/p>\n
\u201cWe\u2019re in that no man\u2019s land, where we make too much to qualify for any help, but we don\u2019t make enough to really afford everything that we need as a family,\u201d he said. \u201cThose subsidies were huge.\u201d<\/p>\n
Both he and his wife work \u2013 she is a teacher \u2013 and they pay for two day cares. When their premiums jumped, they ran the numbers to see whether one parent staying home would save money. It wouldn\u2019t.<\/p>\n
\u201cI chose day care instead of health care,\u201d Shadell said. \u201cWe did come up with a different solution, but it\u2019s still an unaffordable solution. We\u2019re just by the skin of our teeth every month.\u201d<\/p>\n
The family ultimately switched to the school district\u2019s health plan administered by UMR. His wife and daughters are covered for about $600 a month, while another $600 covering Shadell is paid by relatives. Altogether, the policy costs about $1,200 monthly, replacing their former marketplace plan through Anthem.<\/p>\n
They\u2019ve cut extras, buy the cheapest groceries and rarely spend money on themselves.<\/p>\n
\u201cWe\u2019re getting hit from all sides, as a lot of families are in America,\u201d Shadell said. \u201cWhile President Bone Spurs is building a ballroom, we can\u2019t afford health insurance.\u201d<\/p>\n
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\u201cI mean, the system is broken. The government can\u2019t fix it,\u201d said Paul Kersch, a Durango resident whose monthly insurance premiums skyrocketed after the expiration of enhanced premium tax credits. (Jerry McBride\/Durango Herald)<\/p>\n
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<\/p>\n
Is there an alternative to traditional health insurance?<\/p>\n
Some residents, have responded by leaving the traditional insurance marketplace altogether.<\/p>\n
After paying the quadruple amount in January, Paul Kersch and his wife, Catherine McCarthy, turned to CrowdHealth, a medical cost-sharing program.<\/p>\n
The program is not insurance. Instead, it operates as a membership-based community where participants contribute monthly and help cover one another\u2019s major medical bills. It\u2019s a model similar to GoFundMe, but structured, ongoing and limited to health expenses.<\/p>\n
\u201cIt just seemed to make a whole lot of sense for us, because we\u2019re healthy,\u201d Kersch said.<\/p>\n
Members must meet certain eligibility standards, including basic health criteria. They pay a monthly fee \u2013 Kersch and his wife pay about $268 combined \u2013 and are responsible for the first $500 of medical costs per incident. For larger procedures, the organization negotiates prices with providers and then requests contributions from other members until the bill is covered.<\/p>\n
The program also offers a $300 annual wellness credit for services such as physicals or screenings, though unused funds don\u2019t roll over, Kersch said. He added that the most he and his wife would pay in a month is about $680, far less than the more than $2,000 they were quoted for a traditional plan.<\/p>\n
For Kersch, the switch reflects broader frustration with the health care system.<\/p>\n
\u201cI mean, the system is broken. The government can\u2019t fix it, so this is an option to say, \u2018To hell with you guys. I\u2019m doing my own thing,\u2019\u201d he said.<\/p>\n
For others, dissatisfaction runs even deeper, and they\u2019ve chosen to go without insurance altogether, arguing that financial risk exists either way.<\/p>\n
One Durango business owner who has been uninsured for several years said even when he previously had coverage, he struggled with delays and unexpected costs, including once paying out of pocket for a prescription while his insurer negotiated pricing.<\/p>\n
It reinforces Shadell\u2019s point: The loss of subsidies didn\u2019t create his family\u2019s financial strain; more so, it exposed it.<\/p>\n
Last year, for example, he said his daughter\u2019s tonsil surgery was initially estimated to cost his family $1,000. But their insurance provider ended up reneging on its promise to cover the procedure and he ended up paying $8,000 out-of-pocket unexpectedly.<\/p>\n
\u201cWe\u2019re middle class. We make six figures between the two of us. It\u2019s that weird middle ground where you just can\u2019t get ahead,\u201d Shadell said. \u201cIt boggles my mind that we\u2019re making over $100,000 a year and we almost have to put our child care on a credit card.\u201d<\/p>\n
As of early January, about 1.5 million people had dropped their insurance because of the expiration of enhanced subsidies. Many experts predict the final numbers will be more than triple that, but say it is too early to tell definitely.<\/p>\n
Local providers say it\u2019s still too early to see system-wide effects. CommonSpirit Mercy Hospital CEO Josh Neff said patient patterns haven\u2019t shifted noticeably yet.<\/p>\n
\u201cThis just happened Jan. 1, so it\u2019s still pretty early for us to understand whether we\u2019re truly seeing anything,\u201d he said.<\/p>\n
Neff said estimates suggest roughly 75,000 to 100,000 covered individuals have dropped from insurance enrollment overall. However, he noted that many people, particularly those nearing Medicare eligibility, appear to be continuing to pay their premiums despite higher costs.<\/p>\n
\u201cSo that, to me, tells me that the changes haven\u2019t necessarily hit the market yet,\u201d he said. \u201cIs there potential for that? Probably so, but we haven\u2019t seen it here locally yet.\u201d<\/p>\n
jbowman@durangoherald.com <\/p>\n
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