More than 4,100 Arizonans who get health-care coverage through the Affordable Care Act’s high-risk insurance pool will be allowed to keep their expiring plans through the end of January.
The one-month extension of the Pre-Existing Condition Insurance Plan is one of several minor tweaks announced Thursday by the U.S. Department of Health and Human Services to eliminate coverage gaps for consumers who enroll through either the law’s federal or state-based marketplaces. Arizona is one of 36 states on the federal exchange, healthcare.gov.
More than 4,100 Arizonans who get health-care coverage through the Affordable Care Act’s high-risk insurance pool will be allowed to keep their expiring plans through the end of January.
A new survey reports that 15 percent of Arizona employers expect to drop health benefits by 2018 because employees and their families will be able to secure health insurance through the new government-run marketplaces.
Benefits consultant Mercer’s annual survey of 35 Arizona businesses found that 15 percent of those employers are “likely” or “very likely” to drop coverage within five years even though they would face a penalty under the Affordable Care Act, which requires companies with at least 50 employees to provide affordable health coverage beginning in 2015.
When Cynthia Edson learned how much her husband’s employer-provided health- insurance plan would change in 2014, she compiled a to-do list.
Get a skin-cancer check and an appointment with a gynecologist.
Renew and fill the family’s prescriptions.
Schedule a blood draw for her husband and youngest daughter.
Edson sprang to action because her husband’s employer drastically changed its health-insurance plan for 2014.
Citing the nation’s new health-care law, the company switched to a high-deductible plan that won’t pay for medical care until the family spends $4,000 out of pocket.
So, like many others in Arizona and elsewhere, Edson is cramming in all of the health care she can to take advantage of her more generous plan that ends Dec. 31.
“We’re trying to get everything we can get done right now,” said Edson, of Chandler. “We’re not the only ones feeling this pressure. We’re competing with everyone else who is doing the same thing.”
Doctors, insurers and health-care analysts say the rush to use medical benefits before the year ends is a real phenomenon.
Consumers try to get all of the health care they need before newer, less- generous plans start.
Or they schedule non- emergency “elective” procedures toward the end of the year, after they’ve met deductibles that require them to spend $1,000 or more before coverage kicks in.
Such high-deductible plans are a popular choice for employers seeking to share costs with employees.
About two out of five workers who received health insurance through an employer had a deductible of at least $1,000 this year, according to an annual Kaiser Family Foundation and Health Research & Educational Trust survey of more than 2,000 large and small employers.
National surveys suggest that corporations have been shifting health-care costs to employees for years by raising premiums, co-payments or deductibles.
The Kaiser poll found that the cost of the typical plan rose 80 percent over the past decade, but the worker’s contribution increased 89 percent over that same time period.
Still, employers paid an average of $11,786 per family plan in 2013, while the worker’s share was $4,565.
University of Arizona College of Public Health professor Daniel Derksen said such costs become a competitive issue for businesses, and some companies may see the health-care-reform law as a strategy to offset rising costs for health insurance.
“It’s always nice to have a villain to blame,” Derksen said. “These days, it’s easy to blame ‘Obamacare.’ ”
Proponents of the Affordable Care Act insist that the law should not trigger major changes to employer- provided health insurance, but some companies have cited the law as a catalyst for converting to high-deductible plans, charging more for coverage, or dropping coverage for part-time workers.
United Parcel Service cited the law as one reason it is eliminating health insurance for about 15,000 spouses who have coverage options elsewhere. Retailers Home Depot and Trader Joe’s both dropped coverage for part-time workers, sending those employees to government-run marketplaces.
The health-care law requires companies with 50 or more employees to provide affordable health insurance or pay a penalty.
The mandate is for employees who work at least 30 hours per week, and it does not take effect until Jan. 1, 2015.
But next year, employers must pay a “reinsurance” fee that will be used to stabilize rates in the new online marketplaces, and many employers are citing that fee as a factor for charging more, covering less or a combination of both. A national survey by Aon Hewitt suggests that the Affordable Care Act’s taxes and fees add 1 to 2 percent in direct costs to employers.
Phoenix Children’s Hospital said in a letter to employees that it must pay a $409,000 insurance fee under the health-care law.
Such fees prompted the hospital to scale back less-expensive plans and raise health-insurance premiums for many employees.
Still, the Phoenix hospital offers employees a range of choices.
Many other companies are considering giving employees just one option for health insurance.
The Aon Hewitt survey found that 44 percent of companies are considering offering workers just one health-insurance plan — a high-deductible plan — rather than offer a high-deductible plan plus a more traditional plan that covers 70 to 80 percent of medical costs.
Gannett Co., Inc., which owns Republic Media, the parent company of The Arizona Republic, is among the companies that will offer only a high-deductible insurance plan.
Health-insurance executives describe high- deductible plans as “consumer-driven” because they make employees responsible for a larger share of their health-care costs.
These plans are often coupled with health savings accounts, which allow employees to put away pretax money that can later be spent on medical care.
Such plans theoretically encourage consumers to make smarter choices and skip care that isn’t necessary.
“That is what a consumer plan is designed to do — it pushes more accountability to employees,” said Denise Jewell, a principal with Mercer, a benefits-consulting firm with an office in Phoenix.
Other experts say that while the Affordable Care Act’s direct expenses are limited, the law gives companies an excuse to scrutinize how much they are spending and make changes.
“Small and large businesses are going to look at this as an opportunity to really think about health-insurance benefits they are offering to employees,” said Derksen, the University of Arizona professor. “Business decisions will be made about what is the best value. Are they really getting the value they expect with the amount they are paying?”
Edson’s family gets coverage through her husband’s employer, Atlanta-based HD Supply. The Edson family now has a plan that covers 70 percent of medical costs.
HD Supply, which employs about 15,000, switched to a high- deductible plan combined with a health savings account.
“At the beginning of 2014, most remaining measures of the Affordable Care Act will kick in, and HD Supply is keeping pace with these new compliance measures to make sure you and your family continue to have access to affordable, quality health care,” the company’s enrollment package states.
Edson said her family’s monthly premium will be slightly less expensive, but they will pay more out of pocket.
She said she will search for a generic cholesterol medication to replace the brand-name drugs that cost $470 for a 90-day supply.
She also will ask her family’s doctors how much they charge for a routine visit.
She did not have to worry about such costs with her existing plan, which charges a $35 copay for a primary-care doctor’s visit.
People have the option to decline their employer’s insurance plan and choose a plan on the new government-run marketplace at healthcare.gov.
But those people will not get government subsidies if their company offers affordable health insurance, defined as costing less than 9.5 percent of income.
And such employees would lose their employer contribution to their plan, unless the company agreed to provide such a payment in lieu of coverage.
Edson is planning now to make sure her family does not miss out on needed health care. But she expects many others with high-deductible plans will forgo needed medical care over pocketbook concerns.
“When you make a doctor’s visit and know you are going to pay $35, you are more likely to go to the doctor,” Edson said. “When you don’t know how much it will cost you, you will put it off.”
Hospitals and doctors have noticed that with plans that require employees to pay a greater share of their health costs, some consumers are delaying non- emergency procedures until they reach their deductible.
Damon Adamany, a hand surgeon with the CORE Institute in Phoenix, said his office sees a late-year surge of patients scheduling surgery for arthritis or carpal-tunnel syndrome because they have met their deductibles.
“At the end of the year, we definitely see a mad rush,” Adamany said. “I generally don’t take my vacations around the holidays. That is generally when we are the busiest.”
Yet he warns that delayed care can worsen health problems. A person with carpal- tunnel syndrome, for example, may ignore the pain, but “the longer a nerve is being compressed, the more potential damage can be done.”
Mayo Clinic said that historically, the number of patients seeking surgical procedures at its Arizona facilities has grown 5 percent to 10 percent each year. This year, those figures have been flat.
William Stone, who leads the clinical practice at Mayo Clinic in Arizona, said the high- deductible plans are partly responsible.
“The way that costs are shifted with people paying a higher premium or deductible, it’s had some impact,” Stone said. “We’ve seen our volumes decrease because of that.”
Experts on employee benefits say that engaging employees in their health care helps keep costs in check.
Employers routinely encourage workers to take physical exams and biometric screens that gauge health risks.
Based on these measures, companies may financially reward or penalize workers.
Several surveys suggest that Americans are keeping health costs in check.
Health costs routinely spiked at double-digit rates over the past decade but have risen at moderate rates over the past three years.
Aon Hewitt said that metro Phoenix costs increased just 2.9 percent in 2013, but it projects that costs will increase 6.7 percent in 2014.
The website that serves as the backbone of the nation’s health-care overhaul is supposed to extend health insurance to the uninsured masses with just a handful of keystrokes.
But the website has become a point of frustration for millions of American consumers who have run into delays, blank screens and error messages during repeated unsuccessful attempts to browse and buy health insurance plans.
What started as a minor annoyance has developed into political crisis for President Barack Obama’s administration, with questions about when the president was aware of technical malfunctions that were known days and weeks before healthcare.gov launched on Oct. 1.
Some have even called for the firing of Health and Human Services Secretary Kathleen Sebelius, who visits Phoenix today. She’ll meet stakeholders, tour a call center and answer questions about the new online health-insurance marketplace, which is expected to extend coverage to 7 million uninsured Americans by the end of March under the Affordable Care Act. From Phoenix, Sebelius will promote the health-care law at stops in Austin and San Antonio.
But as the Obama administration seeks to ease the public’s concerns over the marketplace’s functionality, Arizona consumers, brokers and insurance companies have resorted to extraordinary steps to get people covered.
The law requires most Americans to get health insurance in 2014 or pay a penalty, which equals the greater of $95 or 1 percent of income. The penalty jumps to $695 or 2.5 percent of income in 2016. Many are exempt from the mandate, including some religious objectors, Native Americans and those who don’t earn enough to file a federal tax return.
Individuals who earn up to $45,960 may be eligible for sliding-scale tax credits to help offset the cost of insurance, and low-income residents who earn up to $15,282 may be eligible for Medicaid, the government-sponsored insurance program for low-income earners.
Some have resorted to filling out and mailing paper applications to the federal agency that oversees enrollment to complete what the website has largely failed to do. Other insurers have compiled waiting lists of interested consumers with the goal of sharing information when the website functions better.
Kathleen Oestreich, CEO of the health insurance cooperative Meritus, said the website has improved since Oct. 1. Still, most people can’t complete the final steps to choose a health-insurance plan.
“We’re certainly helping people understand what the glitches are and tell them that it might be better to wait a little bit rather than become frustrated,” Oestreich said.
Oestreich said her team has discussed alternative strategies, such as filling out paper applications on behalf of consumers or enrolling by phone.
“We’re certainly keeping a very close eye on what’s going on and looking at what our alternatives may be,” Oestreich said.
Mesa broker Al Leafman has his own answer to the marketplace malfunctions. Leafman, who operates an insurance storefront in Mesa, has helped about 30 Arizona residents fill out paper applications by hand and send them by mail.
“These are people who have had trouble with the website,” said Leafman, president of Health Insurance Express.
Leafman said he started filling out paper applications two weeks ago. None of his Arizona customers has been notified that their applications have been accepted, but he expects approvals will soon trickle in.
As the federal government processes the paperwork, Leafman said his staff talks with the customer about health-insurance plans that may fit their needs.
He said that waiting period may be beneficial because it gives customers time to evaluate the confusing array of choices.
Health and Human Services officials say metro Phoenix residents can choose from 111 health-insurance plans at healthcare.gov. The rates vary, and plans are tiered in four categories based on the amount of coverage. A bronze plan covers 60 percent of costs; silver, 70 percent; gold, 80 percent; and platinum, 90 percent. “Catastrophic” plans will offer bare-bones coverage.
Leafman said consumers need to consider more than just cost and coverage options. Several plans marketed in Arizona, for example, have a narrow network of health providers that limit which doctors or hospitals a consumer may choose from.
“Half the process is qualifying people, but half the process is understanding the plans,” Leafman said.
Rosemary Dominguez, 57, of Ahwatukee Foothills, turned to Leafman’s company for help after repeated attempts to sign on to healthcare.gov were unsuccessful. She completed her profile with a user name and password, but was stymied when she attempted to provide more detailed information to verify her identity.
“I called the call center, and they told me to try early in the morning or late at night,” Dominguez said. Those attempts failed, too, she said.
“I just got frustrated when I continued to get locked out,” she said.
Dominguez said she filled out an application with Leafman’s help. She believes she will be eligible for subsidized health insurance because she is currently unemployed.
Elizabeth Arant, 31, of Scottsdale, estimates she has attempted to enroll more than 50 times since Oct. 1. She has tried to sign up at all hours of the day and night, but she has been unsuccessful. She also has tried to call marketplace operators and use the website’s chat feature. Nothing has worked.
“I’m giving up for a few weeks due to frustration and will try again in November,” Arant said.
While the Obama administration initially cited the flood of visitors as the culprit for the website’s problems, Obama and others have acknowledged the marketplace has technical challenges.
The Obama administration on Wednesday met with the top executives of 14 health-insurance companies to address the ongoing computer glitches. White House representatives and insurance-industry executives discussed how to make sure critical forms relayed correct information about applications and coverage options and formulated strategies to break the bottleneck of consumers seeking to buy policies online.
Top executives of most major health-insurance plans that will sell policies in Arizona — Aetna, Humana, Blue Cross Blue Shield and Health Net — were among the participants.
The White House said in a statement that “alpha teams” of technology experts from the Centers for Medicare and Medicaid Services and the private insurance companies met and discussed strategies to fix the technical problems.
Among the problems identified are obscure “834” forms that are transferred from computer to computer. Insurers have told White House officials that those forms have reported incorrect information, which could ruin efforts to sign up consumers or assign the wrong insurance plan to an individual.
The White House said in a statement that the meeting among insurance executives was “another way we are ensuring that we are doing everything possible to address the technical issues to ensure that all the American people who need it can purchase the affordable health care coverage made available as a result of the Affordable Care Act.”
Health and Human Services officials also said that they soon expect to address an enrollment glitch that will ensure people are not fined if their applications are still being processed as of March 31.
Because applications take about two weeks to process and health-insurance companies typically start coverage on the first of the month, some worried that individuals could be fined if they do not sign up by Feb. 15. HHS officials said Wednesday that they will soon issue clearer guidelines on the deadline.
“The individual-mandate timing has not changed,” HHS spokesman Fabien Levy said. “The deadline for signing up for insurance is March 31.”
Reach the reporter at ken.alltucker @arizonarepublic.com or 602-444-8285.
Nearly 1 million uninsured Arizonans today can begin shopping for health insurance through the new federal marketplace established under the nation’s health-care law.
But despite years of planning, health experts predicted some consumers may experience temporary setbacks when applying for coverage today through the new government-run website, healthcare.gov.
The nation’s health-care law shifts from the political to the personal this week.
On Tuesday, millions of Americans can begin shopping for health insurance through online marketplaces established under the Affordable Care Act.
The federal government released data Wednesday that show Arizonans will be able to choose from a robust menu of health-insurance plans, with rates that are among the lowest in the nation, when the health-care law’s new online marketplaces launch next week.
According to data released by the U.S. Department of Health and Human Services, eight insurers will offer 111 health plans in four price-range tiers in metro Phoenix.
For Arizona’s lowest-cost middle-range “silver” plan, which pays 70 percent of medical costs, average premiums will cost $248 per month, compared with the national average of $310. Only four of 48 states had less-expensive average premiums for that plan.
Enrollment for plans on the online marketplaces starts Tuesday and ends March 31. Consumers can sign up at healthcare.gov.
Analysts warn that premiums represent only part of what consumers can expect to pay. Consumers also will be responsible for copays, deductibles and coinsurance that could significantly increase out-of-pocket expenses.
“It’s great news that premiums are low,” said Dan Mendelson, CEO of Avalere Health, a consulting firm that analyzes health data. “But consumers also have to be ready for significant out-of-pocket costs if they get sick.”
The law requires plans to cover 10 essential health benefits — including emergency services, hospital stays, prescription drugs and maternity care — and 60 to 90 percent of expected medical costs, depending on the medal tier. A bronze plan covers 60 percent of costs; silver, 70 percent; gold, 80 percent; and platinum, 90 percent. “Catastrophic” plans will offer bare-bones coverage.
Arizona’s second-least-expensive silver plan will cost $252, compared with a national average of $328. The least-expensive bronze plan in Arizona will charge an average premium of $214, compared with the national average of $249. Those average rates are before federal tax-credit subsidies are calculated.
The federal government released the data before the launch of the marketplaces, as congressional Republicans seek to defund the Affordable Care Act.
“We are excited to see that rates in the Arizona marketplace are even lower than originally projected,” Health and Human Services Secretary Kathleen Sebelius said in a statement.
President Barack Obama’s health-care law requires nearly every American to secure coverage next year or pay a penalty, which starts at the greater of $95 or 1 percent of a person’s income in 2014 and then escalates to $695 per person or 2.5 percent of income by 2016.
Nearly 1 million uninsured Arizonans are expected to be eligible for coverage through the marketplaces or Medicaid, which will expand in Arizona to 133 percent of the federal poverty level.
Those who earn up to 400 percent of the federal poverty level — $45,960 for an individual or $94,200 for a family of four — will be eligible for sliding-scale subsidies. The lower a person’s income, the more generous the subsidies will be.
The federal government will oversee the marketplace in Arizona and 35 other states, so it must approve plans and sign contracts with health insurers. The federal government’s analysis also includes information from 12 states that will operate their own marketplaces.
The pricing information released by the HHS didn’t include premiums by age group or a list of insurers offering policies in the state. But the information showed that a 27-year-old who makes $25,000 per year would pay $120 per month for the lowest-cost bronze plan with the tax-credit subsidy.
The analysis also said a family of four with a household income of $50,000 could buy the second-least-expensive silver plan for $600, but that monthly bill would be reduced to $282 after subsidies are factored in.
The federal data show how much prices can range among states. The second-least-expensive silver plan for a family of four costs $1,237 in Wyoming and $584 in Tennessee. After the tax-credit subsidies are added based on a household income of $50,000, those families would pay the same monthly bill — $282.
Health-care experts caution that consumers should consider factors other than monthly premiums when selecting health insurance.
Diane Brown, executive director of Arizona Public Interest Research Group, said that some plans may offer affordable premiums but that consumers may end up paying more when deductibles, copays or prescriptions are added in.
Brown said that may be especially true for uninsured residents who are not familiar with the ways insurance plans shift costs to consumers.
“Arizonans new to purchasing health insurance need to carefully weigh options and explore a variety of scenarios before settling on one plan,” Brown said.
Avalere Health released an analysis Wednesday that showed consumers in six states should expect to pay a significant amount out of pocket through deductibles, prescription drugs and medical services. Though Arizona was not among the six states, Mendelson said the analysis is instructive nonetheless.
“These plans are not like standard, commercial insurance,” Mendelson said. “They are more like high-deductible plans where you don’t see a penny of insurance money” until health spending reaches a set amount, such as $2,500 or $5,000.
The federal-pricing data also did not compare how rates on the new marketplaces will compare with rates that are now available for consumers.
Glenn Hamer, CEO of the Arizona Chamber of Commerce, questioned whether the marketplaces’ health-insurance rates will be more affordable for young adults.
“It would be very sad if people who were covered by insurance can no longer afford to be covered,” Hamer said.
Reach the reporter at ken.alltucker@arizonarepublic .com or 602-444-8285.
It’s a change in thinking: Give drugs to healthy people to stave off memory or thinking problems that may be years away.
While scientists have long discussed the theory that Alzheimer’s disease can be prevented with early treatment, the federal government gave the idea a major endorsement Wednesday with a $33.2 million grant to a team of Phoenix-based scientists.
Paperwork filed by five major health insurers gives Arizona its first glimpse of how much the Affordable Care Act will cost consumers when they begin shopping for mandatory coverage next month.Plans submitted to the Arizona Department of Insurance signal that average monthly rates will range from $225 to $334 when insurance marketplaces launch Oct.1. Filing rate plans were Aetna, Blue Cross Blue Shield of Arizona, Cigna, Health Net and Meritus, formerly called Compass Health Cooperative.