ACA tax credits set to expire

Gunnison Valley Health (Times archive)

Barring congressional action, Affordable Care Act (ACA) premium tax credits are set to expire at the end of 2025. This could mean a rise in health care premiums for individuals and families buying insurance through Connect for Health Colorado, the state’s official insurance marketplace. 

“We are definitely concerned about the end of the ACA tax credits because of how important the credits and subsidies are for those folks on the exchange to obtain health insurance at a reasonable cost,” CEO of Gunnison Valley Health Jason Amrich said. “Folks are going to have to figure out how to change or stretch their budgets or possibly make the really difficult decision to not choose health insurance.”

On top of the elimination of the enhanced tax credits, insurance rates are also continuing to increase. Rural areas like the Western Slope are facing higher increases in premiums due to factors like fewer insurance providers, higher incidents of health issues and higher utilization of healthcare. These combined factors are causing projected premium costs to rise significantly for many marketplace users next year — some as much as 200-300%.

Who is impacted?

Lauren Shondeck of Shondeck Financial Services and Insurance clarified that not all tax credits are set to go away, just the enhanced subsidies rolled out during the Biden era in the American Rescue Plan Act of 2021. 

“If you are above 400% of the federal poverty line, you are no longer eligible for tax credits as of January 1 [2026],” she said.

For an individual tax filer, that limit equates to a yearly income of $62,600. If your income exceeds that limit, you’re no longer eligible to receive tax credits. 

“So [starting] at $62,601, it’s a pretty dramatic premium increase for most people,” Shondeck said.

Individuals making less than $62,600 annually will still qualify for tax credits.

“If you’re below those thresholds you’re still receiving tax credits,” Shondeck said. “[What we’ve seen is that] people below that threshold are in a good spot, with the same amount of tax credits if not better, it doesn’t feel like their premiums are going up dramatically. Some of them are even going down.”

Amrich provided an example of how these premiums could jump for policy holders. 

“I was looking at one person’s current monthly costs. Right now the monthly cost for their premium is $630,” he said. “The tax credit they received was $206, making the monthly payment $424. Their estimated monthly cost for 2026 is $783 and now that person is not going to receive a tax credit so potentially their payment will go from $424 per month to $783, which is a gigantic increase.”

Not only are those paying for individual or family insurance plans through the exchange potentially facing challenging financial impacts from this change, hospitals and healthcare providers are also bracing for impact as large jumps to insurance premiums may cause larger numbers of citizens to go uninsured. 

“Health happens no matter if we have insurance or not,” Amrich said. “We are also bound as a hospital to provide care in our emergency department regardless of ability to pay. We are concerned that we will see less people with health insurance and likely see more uncompensated care where the hospital is not getting paid for the services provided by our expert physicians, nurses and paramedics and that’s not good for anybody.”

Shondeck encourages people to consult the Connect for Health website to assess  potential changes in premium costs based on income, as opposed to letting policies autorenew.

“The Connect for Health Colorado website is the best in terms of explaining the financial changes,” Shondeck said. “Get on the site or call your broker and check in because a lot of people are on auto-renew and have been for awhile and so maybe you haven’t checked your income in a year or two. It’s really important to get on, check your income against those thresholds and get an idea of what your [new] premium is going to be.”

Shondeck explained that while you don’t have to work with a broker through the process of buying or renewing health insurance on Connect for Health, it doesn’t cost any more to do so and can provide the peace of mind of thoroughly understanding the policies and changes. Brokers can be sought out by zip code on the Connect for Health website. 

In an effort to offset the impact of rising healthcare costs, GVH has rolled out several  programs like low-cost blood drives and affordable radiology exams, as well as discounts and incentives for cash pay options. 

“We also have a pretty incredible screening fund that is a combination between GVH Foundation, Gunnison Tough and Living Journeys where folks can get really important screenings covered like mammography, colonoscopy or dermatology,” Amrich said. “A really important part of healthcare is not waiting until people get sick but doing everything we can to help with prevention. We’d like to see a higher utilization of the screening funds and I definitely encourage folks to pursue that.”

A guide on how to access these screening funds is available on all three of the non-profits’ websites.

Additionally, Amrich encourages people to utilize the financial counseling services available at GVH to get help navigating their bills.

Advocacy avenues

Congress has the option to extend the enhanced tax credits, let them expire or make structural changes to them. Amrich encourages concerned citizens to reach out to congressmen and other federal elected officials who have the ability to affect this legislation.

“I think individuals [should] advocate to their representatives with their direct screenshots of the changes to their premiums so that our legislators really understand the challenges facing their constituents,” Amrich said. “These tax credits are such an important mechanism of affordability, especially in a community like ours where we have a lot of gig workers and a lot of small employers that can’t afford a health plan.”

Regardless of how the tax credit situation plays out, Amrich feels that GVH is prepared to weather the storm and continue providing quality care to the citizens of the Gunnison Valley.

“We have a really strong and supportive foundation and GVH is well-positioned to navigate some of these difficult changes,” Amrich said. “We are trying to make sure that we are a part of the healthcare access and affordability conversation.”

For more information visit connectforhealthco.com.

(Gia Wright can be contacted at 970.641.1414 or jwright@orourkemediagroup.com.)