Kyle Brown: Factor in tax credits when buying insurance
December 18, 2013
Tax credits available through Connect for Health Colorado, our state's new health insurance marketplace, are making the cost of health insurance for many in Routt County less expensive than in Denver. So before you shop for health insurance for the coming year, take the time to find out whether you are among the one-third of Routt County residents who may be eligible for financial assistance to help you pay for health insurance.
Individuals and families who don't have access to affordable coverage through an employer, Medicare or elsewhere may be eligible for tax credits to help them purchase coverage through Connect for Health Colorado. Tax credits are designed to be taken in advance and will lower monthly premiums for many Coloradans.
Routt County residents with incomes between 138 and 400 percent of the federal poverty level may be eligible. That's between $15,857 and $45,960 per year for an individual and between $32,499 and $94,200 per year for family of four.
When insurance costs more, tax credits increase to help make up the difference. A 27-year-old nonsmoker in Steamboat making $23,000 per year will be eligible for a $172-per-month tax credit, more than twice the tax credit available for a similar person in Denver. A 64-year-old nonsmoker in Routt County making $40,000 per year will receive $522 per month. That's $250 more per month than they would receive in Denver.
Thanks to tax credits, the premiums for many insurance plans through Connect for Health Colorado are, on average, lower than the premiums in Denver. For example, a 40-year-old nonsmoker in Routt County who makes a little more than $17,000 per year will, on average, pay 25 percent less for a Bronze Level plan than if they lived in Denver. Silver plans for 64-year-old nonsmokers making nearly $46,000 are 2 percent less per month in Steamboat Springs than in Denver.
Surprisingly, younger adults who are eligible for tax credits may find that better coverage is cheaper than more limited coverage. People younger than 30 can enroll in catastrophic coverage, offering the most limited benefits with the highest out-of-pocket costs, but tax credits cannot be used to purchase these plans. For that reason, a 27-year-old making $23,000 per year can, on average, purchase a Silver Plan with extensive benefits and lower deductibles for $75 less than they would pay for a catastrophic plan with much more limited benefits.
Everyone agrees that the sticker prices for health insurance in Steamboat Springs and across Routt County can be steep, and for many folks ineligible for tax credits, insurance may remain unaffordable. Bringing down prices for everyone is an important goal and will require a frank conversation about what is driving health care costs in Routt County and in Colorado as a whole.
Individuals and families can learn more about the insurance and the financial assistance options available to them by logging on to http://www.connectforhealthco.com or calling 1-800-PLANS-4-YOU.
Kyle Brown is the senior health policy analyst at the Colorado Center on Law and Policy. CCLP advances the health, economic security and well-being of low-income Coloradans through research, education, advocacy and litigation.