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.
In Arizona, nearly 1 million consumers and small businesses will learn how much the law will cost them and affect their choices for doctors, hospitals and prescription-drug coverage.
Through the online marketplaces, users will be able to compare plans, prices and health-care providers.
A goal of these online marketplaces for individuals and small businesses — a cornerstone of President Barack Obama’s sweeping health-care law — is to draw a mix of young, middle-age and older adults to balance the risk for insurance companies and keep rates in check.
Most Arizona residents who use these new marketplaces will be eligible to purchase coverage at subsidized rates.
And health insurers must abide by new rules that prevent them from denying coverage to the sick or charging older adults significantly more for coverage, and that require them to provide benefits in certain categories including hospital stays, maternity care and mental health.
Arizonans can start shopping Tuesday at the government-run website www.healthcare.gov or call 1-800-318-2596. Those who need help can visit the website or call the toll-free number. Community health centers also will assist people. Visit the Arizona Alliance for Community Health Centers at www.aachc.org or call 602-253-0090 to find a center near you. The enrollment period ends March 31. The new insurance plans take effect Jan. 1.
“We’ve been working on this for three years,” said David Sayen, regional administrator for the Centers for Medicare and Medicaid Services, which will run the marketplace in Arizona and 35 other states. “We passed the security checks. We’re ready to roll.”
But the unknown is a common theme: Consumers don’t know whether health insurance will become more or less affordable. Health insurers are curious whether older or sicker consumers will flock to the marketplaces while younger or healthier consumers take a wait-and-see approach. And hospitals and doctors are preparing for a new wave of patients with freshly printed insurance cards.
The U.S. Department of Health and Human Services last week released examples of insurance-plan prices. Arizona’s lowest-cost middle-range “silver” plan will charge an average premium of $248 per month, compared with the national average of $310. That is before federal subsidies.
The health-care law ranks plans on four medal tiers. A bronze plan covers 60 percent of medical costs; silver, 70 percent; gold, 80 percent; and platinum, 90 percent. Catastrophic plans also will offer bare-bones coverage.
A Republic analysis of plans submitted by five insurance companies to the Arizona Department of Insurance show average monthly rates will range from $225 to $334. Insurance companies filing rates include Aetna, Blue Cross Blue Shield of Arizona, Cigna, Health Net and Meritus. The filings also said monthly premiums will range from less than $100 to more than $1,700 before federal subsidies kick in.
Still, those average rates don’t necessarily reflect what people will pay for health care. Insurers expect that the most affordable plans will charge high deductibles that require people to pay a set amount, $5,000, before coverage kicks in. And insurers will offer many plans that limit a consumer’s network of doctors, hospitals and labs.
Insurance companies that will woo these new customers are among the most curious about how this great experiment will unfold.
“This is the biggest change to our health-care system since the 1960s,” said Brad Kieffer, a spokesman for Health Net, one of the health-insurance companies that will sell health-insurance plans over the online marketplaces. “Like everybody, we’re eager to see what the overall outcome will be.”
Get covered
The nation’s health-care law is anchored by the requirement that nearly everyone must have insurance.
Known as the individual mandate, consumers must secure health insurance in 2014 or pay a penalty. The penalty starts at the greater of $95 or 1 percent of a person’s income in 2014 and escalates to $695 per adult or 2.5 percent of income by 2016. Among the groups exempt from the mandate are Native Americans, religious objectors and those who don’t earn enough to file a tax return.
Of the 57 million U.S. residents who don’t have health insurance today, the Congressional Budget Office estimates just 7 million will get coverage through an exchange next year and another 9 million will enroll in Medicaid, which is expanding eligibility to up to 133 percent of the federal poverty level — $15,282 for an individual or $31,322 for a family of four — in Arizona and 25 other states.
People don’t have to enroll in the new marketplaces if they get coverage through a government program such as Medicare or Veterans Affairs, or if they have health insurance through an employer.
Those on Medicare now do not have to enroll in the new marketplaces. They will use Medicare’s traditional enrollment period to choose either government-run Medicare or a plan administered by privately run insurance companies, known as Medicare Advantage.
Companies that employ 50 or more full-time workers must provide affordable health insurance to employees as of Jan. 1, 2015. More than nine out of 10 large employers already provide health-insurance coverage to employees, and most are expected to continue.
Some employers are already making decisions even though their coverage requirement is more than one year away. Major employers such as United Parcel Service, Trader Joe’s and Home Depot scaled back coverage for some workers or spouses. And some analysts predict that the years-long trend of shifting costs to employees will accelerate with more high-deductible plans.
Smaller companies with fewer than 50 full-time workers don’t have to provide health-insurance coverage. However, some small businesses with fewer than 25 workers and paying an average wage up to $50,000 will be eligible for a tax credit if they purchase coverage through the new small-business marketplace, called the Small Business Health Options Program, or SHOP.
On Thursday, the White House delayed Internet-based enrollment for SHOP until November, but small-business owners can still enroll beginning Tuesday by calling 1-800-706-7915 on weekdays.
More options
Karen Qualtire, who owns Qualtire Plumbing and Construction, said she will keep an open mind about how the health-care law will impact her 10-employee business.
“So many business owners are opposed to it,” Qualtire said. “I’m just crossing my fingers, hoping for the best.”
Qualtire has long offered health insurance to employees as an incentive to keep quality workers from leaving. But as those workers aged, and a few contracted chronic conditions such as early-stage cancer and colitis, it became more difficult and expensive to find and pay for a plan.
Qualtire said she routinely has paid annual rate increases of 15 to 30 percent, and the choices have dwindled to just one company, UnitedHealthcare.
“The idea of the free market is you are able to shop around,” Qualtire said. “We never really have had much of a choice. No other company will write (insure) us because of age and health conditions.”
Qualtire is curious whether she can find more affordable rates on the new small-business exchange. Blue Cross Blue Shield, Meritus and Health Net told The Republic that they intend to sell plans through SHOP, but the federal government will not confirm choices before Tuesday.
The tax credit for small businesses has been available over the past two years, and Qualtire has used it, shaving the company’s tax bill by $7,000 per year.
“I am a little nervous and I don’t know what to expect,” Qualtire said. “I don’t think it will be perfect, but I hope it will be helpful.”
While Qualtire looks forward to the new options, Chris Rupp, of Phoenix, is dreading the changes.
Rupp, who owns an aerospace consulting business, said he worries because he will lose a state-run health-insurance plan for small-business owners. The Arizona Legislature cut the Healthcare Group of Arizona plan for small businesses effective Jan. 1 because those people can go to the new marketplaces.
Rupp is among more than 6,000 Arizonans who are enrolled in that plan, which covers business owners, their employees and dependents. Rupp, who cut back his staff in recent years, uses the plan for himself.
Rupp said he pays about $1,100 each month for health insurance for himself and his children. While the plan is expensive, he said it provides coverage for prescriptions he needs and offers peace of mind.
“I’m just so frustrated,” Rupp said. “One hospital visit would ruin me.”
Providers prepare
While consumers and businesses adjust to the new landscape, health-care providers are preparing for a rush of newly insured customers.
“By bringing in potentially 1 million more patients statewide, there is going to be a need for more physicians and more nurses,” said David Parra, director of community outreach for AARP Arizona.
Even experienced health-care executives say they don’t know for certain how things will change when enrollment starts.
While the nation’s new health-care law does not impact how older adults choose a Medicare plan during traditional enrollment, the law will impact how hospitals and doctors care for some Medicare patients.
Hospitals have adapted by hiring primary-care doctors and working to better coordinate care. Medicare will now penalize hospitals with a poor track record of readmitting patients for the same condition within 30 days of discharge. The federal government believes that if hospitals do a better job of explaining to people what they need to do after leaving the hospital, costly readmissions can be significantly cut.
Medicare also has started pilot programs that pay hospitals and health systems a set amount for a group of patients, with the providers sharing the risk if health care becomes too expensive.
These new accountable-care organizations are one factor cited for the combination of Scottsdale Healthcare and John C. Lincoln, two long-standing metro Phoenix hospital systems.
Banner Health has opened eight primary-care clinics across metro Phoenix in anticipation that newly insured people will need to choose a doctor. There are people who may have gone to a hospital emergency room or an urgent care center in the past.
“This will require them to search for more options,” said Peter Fine, CEO of Banner Health.
Fine said he is curious whether the newly insured will seek out primary-care doctors or convenient health care at retail settings such as chain drugstores staffed by nurse practitioners or primary-care clinics like the ones Banner is establishing.
While there is still talk about repealing the Affordable Care Act, Fine said larger forces are at play in health care.
Employers, individuals and insurers are all looking to clamp down on costs. So with or without the nation’s health-reform law, market forces will demand better care at a lower cost, Fine said.
“The horse has already left the barn,” Fine said. “The cost of health care is too much. Something is going to have to change. I don’t think the country is willing to tolerate health-care costs the way we once were.”
Reach the reporter at ken.alltucker@arizonarepublic.com or 602-444-8285.
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