Highlight on Arizona: Premiums skyrocketing for Arizonans, Republican governor committed to keeping health protections in place

When it comes to premium increases for marketplace plans, Arizona is one of the hardest-hit states. For the 2017 plan year, reports show that premiums across the country will increase by an average of 22 percent. In Arizona, that number is 116 percent.

According to HHS, Arizona had the lowest rates of the states in 2016. This honor came back to bite marketplace consumers, who will be forced to pay around $422 per month for even the lowest cost plans in 2017. That will come as a blow to the wallet, considering the average of $196 for 2016.

Dr. Robert Tenchsel, CEO of the Yuma Regional Medical Center, admitted that this may cause some consumers to choose to opt out of coverage, because paying the penalty will be cheaper than their premium. Selections for coverage are limited, and consumers must either choose between marketplace plans or Blue Cross Blue Shield of Arizona.

Since the election, Arizona Governor Doug Ducey (R) has drawn attention to the necessity of enacting  new health insurance protections if the new administration follows through with President-elect Trump’s campaign promises to repeal the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). Ducey agreed that the ACA “isn’t working…that it’s badly broken and in need of improvement,” but remains committed to keeping access to affordable care available for his state’s citizens.

Ducey pointed to certain parts of the law that need to be preserved, such as protections for those with pre-existing conditions, prohibitions against lifetime caps, and federal funding for expanded Medicaid programs. Arizona chose to expand Medicaid and accept federal assistance in covering the 400,000 newly eligible. Arizona also restored coverage for single adults living below the federal poverty level, which had been cut years before due to the necessity of finding budget savings. The state received some federal money for this measure, and the rest is funded by assessments on hospitals (which is still in dispute in the state court system).

If the ACA is repealed and the federal funding for Medicaid expansion is revoked, the state will either have to take away health coverage for this part of the population, or find more money in the already stretched state budget. Although during his campaign Ducey stated that the ACA’s Medicaid provisions were an “unacceptable expansion of government,” he said he would veto any attempt by the state legislature to repeal the expanded program now that so many citizens depend on it for coverage.

 

Highlight on Illinois: Exchange rates rise in the Land of Lincoln

Illinois residents purchasing individual health insurance plans through the Patient Protection and Affordable Care (ACA) (P.L. 111-148) could pay rate increases in 2017 as high as 55 percent, according to rate information released by the Illinois Department of Insurance (DOI). The agency submitted rate increases to the federal government ranging from 43 percent to 55 percent, depending on the type of plan—bronze, silver, gold.

Filings

The submitted rates are not final. Although the DOI has submitted the 2017 rate filings to CMS, the rates will not be finalized by federal CMS until October, 2016. Additionally, network and premium information will not be available until that time. The DOI announced that the rate information was published as early as possible to allow Illinois families to make better-informed decisions regarding health care coverage. The DOI acknowledged the rate increases as “a very difficult outcome for consumers.”

Rates

The average rate increase across all ratings areas for the lowest bronze plan is 44 percent. The rate change is lowest in Kane, Du Page, Will, and Kankakee counties, where the rate change is a 10 to 25 percent increase. Counties like Lake and Cook have a 40 to 60 percent increase, whereas counties including La Salle and McLean have a 20 to 40 percent increase for their lowest bronze plans.

The average rate increase across all ratings areas for the lowest silver plan is 45 percent. Counties like Cook and Kendall saw a 40 to 60 percent increase, whereas counties like Du Page, Sangamon, and McLean saw increases of 25 to 40 percent. The average rate increase across all ratings areas for the second lowest silver plan is 43 percent.

The highest average rate increase across all ratings areas is for the lowest gold plan—an increase of 55 percent. Although several counties do not have gold plan offerings, rate increases in some counties, including Peoria County, are as high as 60 to 70 percent. Rate increases for the lowest gold plan in counties like Cook, McLean and Sangamon are 40 to 60 percent.

In practical application, the new rates mean that a 21-year-old nonsmoker who purchases the lowest-priced silver plan in Cook County in 2017 could pay a premium of $221.13 a month—an increase from $152.42 a month in 2016. In Lake and McHenry counties the increases are more dramatic for the same consumer, $268.03 a month in 2017, up from $212.23 a month. However, for some, the rate increase is not as massive as it seems because 75 percent of Illinois exchange enrollees receive tax credits to offset premium costs.

Cause

The DOI attributed the rate increases to several factors, including the federal government’s failure to make payments to insurers promised as part of the ACA and an overall increase in medical and pharmaceutical costs. Additionally, the DOI pointed to the fact that, until 2017, policyholders are permitted to keep non-ACA compliant plans, a factor that the DOI said has harmed insurers’ risk pools and placed upward pressure on plan costs.

Highlight on Kansas: Lack of resources impacting state employee benefits, mental health patient care

Bad news for those working for the state of Kansas: health coverage is getting worse. The state will raise premiums, raise co-pays, and raise deductibles while reducing health savings account contribution. While the state works to maintain the health plan’s cash reserves, it must also find a way to fund more resources for those experiencing mental health issues – a problem many states are facing.

Employee health plans

The Kansas Health Care Commission is concerned about the level of the employee health plan’s cash reserves, and has decided to increase the cost to state employees. The cash reserve target over the next two years is $59 million.

In order to reach this level, Kansas state employees will be subject to a 9 percent premium rate increase, while employers are subject to a 7 percent increase. Secretary of Administration Sarah Shipman stated that the adjustments are intended to “maintain plan solvency into the future” to ensure the stability of the system.

The state plan involves various levels, and the changes are different for each level. Plan A workers will have their same $1,000 deductible, but those with family enrolled will be subject to a $3,000 total deductible. Co-pays for doctor visits will rise by $10, reaching $40 for a primary care visit and $60 for specialists. Plan C, the “high deductible” plan, will subject workers to 20 percent of the cost of a doctor visit after hitting $2,750 for single workers and $5,500 for those with family coverage.

All state workers will be subject to a higher out-of-pocket maximum: $5,000 for singles and $10,000 for families. The state not only implemented all of these cost increases, but also mandated reduction in employer health savings account contributions. Single employees lose $500 there, and those with dependents lose $1,000.

When did it start?

In January 2016, a consulting firm made 105 budget recommendations to the Kansas legislature that it claimed could save the state $2 billion over five years. A considerable part of the savings came from the idea of moving all state workers to a high deductible plan. The executive director of the Kansas Organization of State Employees was quite concerned about the recommendation, noting that much of the state workforce is aging and cannot obtain adequate care through high deductible plans. She also mentioned that reduced coverage would offer even less incentive for people to work for the state, especially considering low pay rates.

Kansas feeling the mental health struggle

The state held a mental health symposium at the Kansas Statehouse to discuss issues providers are facing. Last year, Newman Regional Health almost lost its federal certification after it had issues transferring a patient with thoughts of suicide. The hospital’s CEO, Robert Wright, told CMS that the state does not have a sufficient number of mental health beds, forcing hospitals to hold these patients in emergency rooms. Hospitals may face a reduced amount of compensation or none at all for this care.

Wright believes that the issues began when the community-based care movement shuttered mental institutions, reducing the number of beds. This idea might have worked if community-based programs were given the planned amount of funding. Wright is concerned about meeting these patients’ needs without sending the hospital into bankruptcy. Last year, one of the two state-run mental health infacilities in the state was banned from accepting new patients due to overcrowding, understaffing, and safety issues.

Suggestions

Symposium attendees brainstormed ideas to address the problem and better use scarce resources. A representative of the Kansas Hospital Association said she believed that expanding Medicaid eligibility would result in many Kansas residents with mental health problems gaining insurance. Part of the problem is overcrowding in emergency rooms and a difficulty finding psychiatrists, but some raises for state-run hospitals have allowed some stabilization. The president and CEO of a nonprofit offered to train school staff on suicide prevention techniques, and state legislators admitted that the allocated resources are not enough to meet patients’ needs.