Opinion: Colorado entrepreneurs need Congress to keep health care affordable and pass premium tax credit

How would you decide between receiving essential medical care and meeting your basic living expenses? It's an impossible choice, but it's one that small business owners like Sydney Jackson-Clockston of Fort Collins are regularly forced to make.

When Sydney was very ill and didn't have health insurance during the COVID-19 pandemic, she avoided going to the hospital because she couldn't afford the medical bills, a difficult decision that could have cost her life as well as her business. Fortunately, Sydney was later able to enroll in Connect for Health Colorado — our state's Affordable Care Act (ACA) Marketplace — and had health coverage when she was hit as a pedestrian by an uninsured driver. Today, her health insurance allows her to receive ongoing care and physical therapy.

Sydney is able to access this critical health coverage thanks to a federal tax credit that covers 90% of her monthly health insurance premium. Without it, she might be in poor health — and out of business. The problem is, if nothing is done soon that credit will expire.

In Colorado, nearly 225,000 people, including small business owners, their families and their employees, claim this vital credit. Although it can vary per person or per family, many who claim the credit see their premium costs reduced by 75% or more per month.

Access to affordable, quality health care is imperative to the sustainability and growth of small businesses nationwide. As employer-sponsored coverage options remain out of reach for many of our nation's smallest employers, the ACA Marketplace has become a vital source of quality, affordable coverage for millions of U.S. small business owners and employees.

In fact, small business owners and self-employed entrepreneurs younger than 65 now make up nearly 50% of all Marketplace enrollees and are three times more likely to rely on the Marketplace for coverage than others.

The increasing number of small business owners enrolled in the Marketplace has largely been driven by the enhancements made to the ACA's enhanced premium tax credits, or PTCs, which lower monthly premium costs for more than 90% of all Marketplace enrollees.

In 2022 alone, over 2.7 million (82%) of the 3.3 million small business owners and self-employed entrepreneurs enrolled in the ACA Marketplace claimed the PTC, including nearly 300,000 entrepreneurs who would not have been eligible for the tax credit if not for the enhancements. Currently, over nine in 10 enrollees (92%) receive some amount of premium tax credit.

These enhancements, which were first passed by Congress in 2021 and later extended in 2022, strengthened the tax credit for lower-income Marketplace enrollees and extended eligibility to middle-income individuals with incomes over 400% of the federal poverty line.

Despite their proven track record of lowering costs and expanding access to coverage, the ACA's enhanced PTCs are scheduled to expire at the end of 2025, and thousands of Colorado small business owners and their employees will pay the astronomical price.

Average premium increases will exceed 170% for marketplace customers in Colorado, with people in some rural counties facing increases of more than 300% if the PTCs expire. There simply is no way that the small business community can afford this spike. It will overwhelm enrollees who rely on these credits to afford quality coverage through the Marketplace.

If Congress fails to act, Sydney and thousands of other entrepreneurs like her won't be able to afford their coverage. Sydney would be forced to choose between becoming uninsured or giving up her business and reentering the workforce to acquire employer-sponsored health coverage.

During a special legislative session in August, the Colorado legislature passed House Bill 1006 to address the affordability of health insurance in the individual market if Congress fails to extend the enhanced PTCs. While the legislation would help mitigate some of the damage from the looming health coverage affordability crisis, it can't fix it.

That's why the Small Business Majority is working alongside Colorado entrepreneurs to advocate for the extension of the enhanced PTCs. During Congress' August recess, we met with Rep. Gabe Evans (from the 8th Congressional District) and the offices of Reps. Diana DeGette (CD1), Jason Crow (CD6) and Jeff Hurd (CD3) to explain how this crucial credit supports small business owners and their workers in their districts.

Health coverage is not a luxury; it's crucial to the health of entrepreneurs like Sydney and the survival of their small businesses. I urge Colorado's federal policymakers to extend the enhanced PTCs so that our small business community can afford to keep its health coverage.

Hunter Nelson, of Denver, is the Colorado director for Small Business Majority, a national small business organization that empowers America's entrepreneurs to build a thriving and equitable economy.

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