Health Care Reform Kicks In Soon; Premiums Lower Than Expected

Critics make last-ditch effort to kill or delay offer of health insurance for 32 million Americans


The debate about health care reforms remains as schizophrenic as ever as Arizonans get their first look at how much it will cost to extend health insurance to an estimated 1 million residents.

The Department of Health and Human Services this week announced that 106 insurance plans will be listed on the insurance exchange in the state. Nationally, premium costs came in 16 percent lower than the Congressional Budget Office predicted — with Arizona among the lowest in the country.

The lowest cost for “bronze” coverage came in at $214 a month, with the lowest cost for a “silver” plan set at $248. The lowest cost for the low-deductible “gold” plan came in at $325, before taking into account income-based tax credits.

HHS estimated that a single person making $25,000 annually will pay $123 a month for the lowest-cost plan. A family of four will pay $202 for the lowest-cost “bronze” plan.

Nonetheless, Republicans have launched a last-ditch effort to kill or delay the reforms through a lawsuit against Arizona’s expansion of its AHCCCS plan and a threat in Congress to shut down the government by refusing to raise the debt ceiling unless the Obama administration agrees to delay or defund the reforms.

Over the fierce opposition of many state Republican lawmakers, Republican Arizona Gov. Jan Brewer pushed through the expansion of AHCCCS by up to 350,000 people, paid for through the federal reforms.

Arizona has a larger share of uninsured people than almost any other state, with the percentage especially high in Gila County. An estimated 30 percent of Gila County residents are already covered by AHCCCS.

Rep. Paul Gosar (R-Prescott), who represents Rim Country in Congress, last week issued a press release trumpeting his support for a “bipartisanship” in announcing he will vote against raising the debt ceiling unless the Democratically controlled Senate agrees to “defund” the health care reforms, popularly known as “Obamacare.” If Democrats don’t abandon the reforms, the measure would effectively shut down the government and default on the national debt.

Gosar has also co-sponsored an alternative to the health care reforms. This set of bills would allow the sale of insurance plans across state lines, limit trial lawyer fees and non-economic damages in medical malpractice cases, increase the amount of tax-free money people can invest in Medical Savings Accounts, bar federal funding for abortion and prohibit insurance companies from discriminating against people with “pre-existing conditions.”

Gosar commented in a release, “I don’t know if it will go all the way through Congress, but it’s a start. People make a good point when they ask: ‘What’s your solution?’ We’ve put out a simple, clear bill that Americans can read and judge for themselves.”

Cost of premiums

A six-month enrollment period starts on Oct. 1 and people can get coverage as early as Jan. 1.

Critics predicted the reforms would drive up insurance premiums by requiring plans to cover pre-existing conditions, eliminating lifetime caps on coverage, extending the coverage of dependent children up to the age of 26, limiting administrative overhead, not charging deductibles and fees for certain types of preventive care and requiring coverage of pregnancy and birth control.

However, Health and Human Services this week issued a report saying that six out of 10 Arizona residents without insurance can find coverage on the exchange for less than $100 a month, which includes the expansion of AHCCCS and the premium subsidies based on income.


Company Min. Max. Avg.

Aetna $79 $806 $240

Blue Cross $71 $1,489 $264

Cigna $114 $1,693 $314

Health Net $82 $897 $240

Meritus PPO $131 $1,749 $334

Source: Arizona Department of Insurance

Five private insurance companies that will offer insurance polices on the federal marketplace exchanges here have now published premiums for the three levels of required coverage.

For those five major companies, premiums will average between $225 and $334 per month, depending on coverage levels. Those averages conceal an enormous range among the five plans.

Those rates don’t take into account the federal premium subsidies, which will reduce rates for everyone making up to 400 percent of a federal poverty-line wage — which is $45,000 for a single person and $94,200 for a husband and wife with two children.

Avalere Health studied rates listed on the exchanges in 12 other states and found them consistent with the emerging situation here. That study found that the average premium for a “bronze” plan is $274 and the average premium for a mid-level “silver” plan is $336.

People making up to 138 percent of a poverty-level wage (about $31,000 for a family of four) will now be eligible for AHCCCS coverage — which means no premium and therefore no subsidy. After that, people buying insurance on the exchanges will get a subsidy based on income reported to the Internal Revenue Service.

The U.S. Department of Health and Human Services estimates 950,000 Arizonans will gain coverage under the act, of which 73 percent have a full-time worker in the family. Of those, 91 percent should qualify for subsidies.

Impact on states

The predictions of critics that the reforms would bankrupt the states by forcing a big expansion in the Medicaid (AHCCCS) rolls also appear overblown.

Arizona Gov. Jan Brewer fought to expand AHCCCS coverage to 138 percent of the poverty line, despite fierce opposition in her own party — including all three of Rim Country’s state representatives.

The expansion will add an estimated 350,000 people to the AHCCCS rolls, with the federal government initially paying the entire cost. The expansion allows the state to restore eligibility to 57,000 people dropped from the rolls as a money-saving measure, although the voters had twice approved coverage of that population.


• 69,000 young adults can remain on parent’s insurance.

• 2.8 million will gain coverage for pre-existing conditions.

• 423,000 got refunds totaling $19 million from insurance plans that paid out less than 80 percent of premium collected in benefits.

• 2 million will benefit from ban on lifetime benefits cap.

• 1.4 million will gain preventive services without a copay.

• Community health centers will get an additional $67 million in funding, enough to extend services to 400,000.

• Provisions that improve prescription drug coverage for Medicare patients have produced savings of an estimated $1,000 per beneficiary.

U.S. Dept. Health and Human Services

The expansion will inject an estimated $8 billion into the state’s economy over the next four years. A surcharge on hospital bills will cover all of the initial state cost, which the hospitals supported in hopes of reducing the amount they pay for care of the uninsured.

The 100 percent federal share should turn the program into a moneymaker for the state — at least initially. The governor’s plan would drop eligibility for the added population if the federal share ever falls below 90 percent.

Nonetheless, the conservative think tank Goldwater Institute joined by many Republican state lawmakers has filed a lawsuit attempting to block the AHCCCS expansion. The lawsuit contends that the hospital surcharge used to offset state costs amounts to a tax increase and therefore requires a two-thirds vote in the Legislature. Brewer’s expansion plan did get a majority vote thanks to the unanimous support of legislative Democrats, but fell well sort of a two-thirds majority.


don evans 3 years, 3 months ago

Nice pro Obamacare slanted article. You just forgot to include the cost impacting those of us who won't qualify for Obamacare. You know, the ones who will be in essence "taxed" through their raised insurance premiums to pay for those new enrollees. Oh, and you forgot to mention the surge in patients to individual doctors providing a simple family practice, and increased hospital admissions. Can you say hurry up and wait for your medical care needs, or, the doctor can see you in three months? You need the operation, see you in nine months, that's the first available date. Nice system........


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