Nearly 8 percent of western Colorado residents paid a tax penalty in 2015 rather than carry health insurance, but some believe that number should be lower if some of those households knew of the incentives available for which they could be eligible.
According to research from Bethany Pray, a health care attorney with the Colorado Center on Law and Policy, 2,950 households in six Grand Junction ZIP codes paid a tax penalty in 2015.
More than 73 percent of those households made less than $50,000 per year, meaning many of those families or individuals likely would have qualified for tax benefits for health care or, in some cases, free health care.
The Colorado Center on Law and Policy works on health insurance access for the low- income population. Pray did her own study and compiled data from the website of the Internal Revenue Service.
Across Colorado, 4.8 percent of taxpayers paid the penalty, which is slightly above the national average of 4.4 percent, according to a Colorado Health Institute study released Oct. 30.
Under the Affordable Care Act, those who don't have health insurance must pay a penalty on their taxes each year.
That penalty increased from either $325 or 2 percent of a family's income in 2015 to $695 or 2.5 percent of a family's income in 2016, which could increase the rate of the penalty to upward of $2,000.
More than half of the households paying the penalty in Grand Junction came from the 81501 and 81504 ZIP codes, which cover much of the downtown corridor and the Fruitvale area.
In 2015, Pray reported that 28,600 returns were filed in those six ZIP codes by households with an income of less than $50,000 per year.
Of those, 870 reflected that they had Advanced Premium Tax Credits — which lower premium costs — but 2,180 had paid the penalty for not having health coverage.
By comparison on the Front Range, in Longmont, which has a slightly larger population than Grand Junction, 32,710 returns were filed by households with an income of less than $50,000 per year.
Of those returns, 900 had received an Advanced Premium Tax Credit and 2,490 had paid the penalty.
Pray feels that most of those who paid the penalty would have been eligible for a tax credit.
She believes there are several factors that would lead these households to forgo health insurance and pay the penalty, but Pray believes more education on potential benefits could help reduce those numbers.
"There might be people out there who think they won't qualify and might not check," Pray said, noting a study from Connect for Health Colorado — the state's exchange for buying health insurance on the individual market — that showed misconceptions from the public on how much a household could make and be eligible for tax help.
Individuals making less than $48,240 annually and families of four making less than $98,400 annually are eligible for tax breaks if they buy insurance from Connect for Health Colorado.
According to a survey released in July by the exchange, the public believed a family of five would be cut off from tax incentives if they made more than $41,126 per year. The actual cutoff of that household would be $115,120.
The average tax incentive for households in Mesa County is $577 per month, according to Connect for Health Colorado. Spokesman Luke Clarke said about two-thirds of customers buying their insurance on the exchange receive a tax break.
Clarke said the exchange has been focused on educating the public as to what their options are when buying insurance on the individual market.
"A lot of our messaging is don't leave money on the table," Clarke said.
The deadline for open enrollment for health insurance on the exchange is Jan. 12, but to have coverage in place for Jan. 1, people must sign up by Friday.
Rising premiums, particularly on the Western Slope, are considered another major factor in why families or individuals might choose to pay the penalty rather than purchase health insurance.
While the range for monthly payments for health coverage varies greatly depending on the plan, those shopping on the individual market could see an average increase of 31 percent in 2018 if they do not receive a tax incentive. Anthem and Rocky Mountain Health Plans are the two providers available on the exchange.
"Especially in Grand Junction, if you're not getting a tax credit, they are really expensive premiums," Pray said. "It's really worthwhile to find out if you can get some."
Adam Fox, director of strategic engagement for the Colorado Consumer Health Initiative, believes the premiums are a big factor in why eight of the top 10 Colorado counties that see the highest amount of penalties paid are on the Western Slope.
Fox also noted that the Western Slope likely has a larger percentage of workers who are independent contractors or sole proprietors of a business and fall into the gap of possibly making too much money to qualify for tax help or not getting insurance through an employer.
He said he thinks there are some short-term solutions to help mitigate these costs but, in the long term, he feels the cost of health care must be addressed.
"I think we would like to see more robust financial assistance available for people beyond the threshold, but at the end of the day, we really need to start grappling with the underlying health care costs," Fox said.