Health care for thousands of Coloradans caught up in fight over federal spending package in Congress

Congress has just a few days to agree on a federal funding package or the White House says there could be mass layoffs.

Republicans and Democrats are at an impasse over tax credits that help millions of Americans afford health insurance.

Danette Mullinex is among 225,000 Coloradans whose health care is in the hands of Congress.

"That's a scary thought," she says. "I feel like I'm a prisoner and my hands are tied."

Mullinex and her husband own a small excavation company in Mesa County and get their health insurance on the state exchange. They pay just over $2,000 a month thanks to federal subsidies that cap premiums at 8.5% of a household's income. But those subsidies are set to expire the end of December if Congress doesn't act.

The Colorado Division of Insurance says premiums will increase 174% on average for people who get insurance on the exchange. That's an increase of $25,000 a year for a family of four.

Mullinex policy is expected to run about $50,000.

"I don't know what I'm going to do," she said.

The tax credits are now intertwined with funding the federal government. Democrats want to permanently extend them as part of any deal to avoid a shutdown.

"That just leads for an unlimited, never-ending federal subsidy that I don't think is good public policy. It's not addressing that underlying issue of the cost of health care increasing. It's just like a big band-aid that we're trying to put over the underlying issue," said Rep. Jeff Hurd, a Republican who represents Colorado's 3rd Congressional District.

Hurd is co-sponsoring a bill to extend the tax credits by a year.

"It would give us time to talk about the underlying health care drivers of things that are increasing those costs," he said.

Rep. Brittany Pettersen, a Democrat who represents Colorado's 7th Congressional District, says temporary relief doesn't cut it.

"There's a lot to do to address rising costs but, we're talking about most immediately -- for the American people, for regular families -- what is coming down the pike right around the corner."

Gov. Jared Polis is holding events around the state to raise awareness of the looming crisis. In some parts of Colorado, he says, premiums will increase by more than 300% and 75,000 Coloradans, including Mullinex, are expected to drop insurance due to cost.

"It's devastating, and I wish the division would stop. I wish that they would come together as both parties and look after the American people," she said.

The tax credits were initially tied to income but were expanded during COVID and led to record enrollment on the state exchange where 80% of Coloradans have taken advantage of them. They received $328 million in subsidies last year alone.

Open enrollment on the state exchange, Connect for Health, begins in November so rates need to be set in the next couple weeks.

State lawmakers passed a bill during the special session that will help offset the increased costs for some of those on the exchange but, if Congress doesn't extend the tax credits as part of the federal funding bill, it may be too late to avert a massive increase in premiums.

Colorado's reinsurance program -- which the state says has lowered premiums by $2 billion over the last five years -- would also take a hit if the tax credits expire.

The credits are based on the cost of premiums so when premiums drop, the federal government pays less in tax credits. The feds have passed those savings on to states and Colorado has used the money to bolster the reinsurance program and lower premiums further. But those savings -- $100 million a year in Colorado -- would be lost with the elimination of the tax credits.