Colorado Center on Law & Policy and Colorado Consumer Health Initiative

Affordability of Health Coverage

While many couples dream of vacations or retiring someday, Catherine and José Garfio have simpler goals: spending time with their three children and eight grandchildren, and someday affording a trip to a dentist or doctor.

Catherine, 52, has not seen a dentist since 1977. She hides her protruding, sore teeth and subsists on soup. Nonetheless, Catherine works three janitorial jobs every day, leaving at 5 a.m. and returning home mid-morning to care for her granddaughter. José, 51, works full time as a janitor for a bank.

Still, this La Junta couple cannot begin to afford health insurance. José's job offers coverage, but it's too expensive. Insurance for the couple would cost more than $800 a month, nearly 45% of their monthly income of $1,900.

"No one can afford to spend half their income on health care,'' said Elisabeth Arenales, Health Care Program Director for the Colorado Center on Law & Policy (CCLP). "The Garfios' situation is common. You see families making tradeoffs like this every day. Can I afford health insurance premiums or pay for basic living expenses like food and rent?"

With support from The Colorado Trust, CCLP and the Colorado Voices for Coverage conducted a health care affordability study, interviewing more than 1,000 participants across the state. Among the key findings:

• Low-income families like the Garfios have little, if anything, to spend on health care after paying for necessary expenses and other financial responsibilities, such as support of family members.
• For more than half of families, expenses exceeded incomes.
• Even at the highest income level studied (500% of the Federal Poverty Level (FPL), or $106,000 for a family of four), 32% of families had expenses greater than income and almost one-fifth (19%) wound up with negative balances even though health care expenses were excluded from the analysis.
• Once health care costs climb to more than 5% of family income, families start to give up other spending to pay for health care. They sacrifice investments such as saving for retirement or paying for education.
• Most families experienced an increase in debt over the previous year.

"You have families who have worked hard all of their lives, but they still don't make enough to pay for health care," Arenales said.

Under federal law, help should be on the way for families like the Garfios, Arenales said. Families under 400% FPL (about $88,200 for a family of four), who have access to insurance through their employers and spend 9.5% or more of their incomes on premiums, will qualify for subsidies and be able to shop for more affordable insurance through health exchanges.

Families at the Garfios' income level who go into the exchange will be required to spend about 5% of their income on health insurance premiums. The Garfios' premium might cost about $95 per month, significantly more affordable than the $800 tab they face now. They will also have to pay some out-of-pocket expenses when most of the federal offerings start in 2014.

The Garfios know their situation is tenuous. Any accident or health setback could bankrupt them. Already, they have faced difficult times. Four years ago, José lost his job of 18 years when the La Junta school district privatized janitorial services. That job loss led the couple to drain more than $41,000 in retirement savings as they struggled unsuccessfully to keep their home. Now, they live in a rental.

Two years ago, Catherine endured a cancer scare. An ominous result from a pap smear spurred doctors to conduct a follow-up ultrasound and biopsy. Thankfully, the cancer results were negative, but Catherine had to pick up yet another job to pay the $800 tab over several months. Other times, the couple has simply ignored health concerns.

Being able to afford health and dental coverage would be a huge relief for the Garfios. "It's my dream to go to a dentist,'' Catherine said. "If I finally got help, that would probably be the happiest day of my life. I'm speaking for a lot of people out here. How can we work so hard and still not afford help?"