Arizona

Over at the National Review, Michael "King v. Burwell" Cannon of the CATO Institute and self-described Obamacare-slayer has penned a piece which tears into the ACA over the situation in Pinal County, Arizona, where, barring a last-minute development, several thousand residents are about to find themselves in a pretty unpleasant situation when it comes to finding a new healthcare policy for 2017. As I noted last week:

Pinal County won’t have a company offering marketplace health insurance plans next year following the nation’s third-largest health insurer’s decision to exit public exchanges in all but four states.

Aetna was the only insurer planning to offer Affordable Care Act plans in Pinal County for 2017. It currently only sells in Maricopa County but had planned to expand to Pinal County.

Amidst my Aetna Postapalooza yesterday, there's one important point which other outlets have brought up which I haven't addressed yet: Pinal County, Arizona.

Since participation in the ACA exchanges has always been voluntary for carriers selling ACA-compliant individual policies (except for the District of Columbia (and until recently, Vermont), where carriers are legally required to only sell individual policies via the exchange), there's always been the danger that sooner or later there might be a situation where no carriers are selling on the exchange. Not "a few", not "only one"...zilch.

In my mind, I've always thought of this problem in statewide terms; it wasn't until 2015 that I even realized that many carriers only sell policies in some of the counties in a given state, not all of them. That makes the list of 300+ exchange carriers nationwide a bit misleading; some of the carriers listed for a given state might only be selling in a few or just a single county, making the scenario above far more likely to happen.

In yesterday's "all 50 state" wrap-up of my 2017 Requested Rate Hike analysis, among the numerous caveats/disclaimers was this one:

In some cases, estimates that I ran as recently as a few weeks ago may prove obsolete.

I was planning on revisiting some of the states I crunched numbers for back in May and June, but commenter "M E" beat me to the punch in Arizona, finding this Arizona Republic article from yesterday and, more importantly, the official AZ Dept. of Insurance Revised Rate Filing memo from August 3rd.

The article isn't pretty...

As of last week, five companies in Arizona had announced plans to pull out or pull back: Health Choice, United Healthcare, Humana, Blue Cross Blue Shield of Arizona and Health Net.

BREAKING Just Now:

CMS approves Arizona’s plan to re-open CHIP program

Today, the Centers for Medicare & Medicaid Services (CMS) announced that it has approved Arizona’s plan to allow new enrollment in the Children’s Health Insurance Program (CHIP) after enrollment was frozen for several years. Now all states provide CHIP coverage to eligible children. 

“Today’s approval is a step forward for the health of Arizona children in low-income families,” said Vikki Wachino, CMS Deputy Administrator and Director of the Center for Medicaid and CHIP Services. “With Arizona’s decision, all states in the nation now provide CHIP coverage to any eligible child who applies. More children in Arizona will have access to coverage early in their lives, which helps kids grow into healthy adults and provides parents with the peace of mind that comes from their children having affordable coverage.”

Having coverage through CHIP improves children’s health and increases their ability to succeed in school. Recent research on Medicaid and CHIP shows that these gains are long lasting, with children who gained coverage experiencing better health, higher educational attainment, and higher earnings as adults.

There are only 2 things I'm certain of when it comes to the requested rate hike filings in Arizona's individual market:

  1. It's a confusing mess.
  2. Regardless of #1, Arizona's requested rate hikes are jaw-dropping even when weighted by carrier.

The data below is drawn from two sources: The RateReview.HealthCare.Gov database and Arizona's Health Filing Access Interface (HFAI) SERFF database.

As you can see, there's some confusing and contradictory numbers, but I'll try to muddle through each:

Just 2 days ago I noted that the Arizona state Senate was refusing to vote to reinstate the KidsCare program (aka, Arizona's name for the federal CHIP program) for absolutely no legitimate reason, since the program a) would provide 30,000 low-income children with healthcare coverage which would b) be 100% paid for by the Federal government and would c) bring them in line with every other state in the nation.

Well, it appears that at least some Republicans in Arizona do have at least a bit of decency:

Republican lawmakers maneuver to force a vote on KidsCare, reviving a debate over the role of government in people's lives vs. personal responsibility

Chastened and angry over their failure to reinstate KidsCare, Republican lawmakers in the Arizona House got Democrats to join them Thursday in a successful bid to revive the children’s health-insurance program.

Health plan for needy kids rejected by Arizona lawmakers:

PHOENIX - The Republican-controlled House on Tuesday refused to restore a federally-funded health insurance program for children that's used by every other state in the country.

House Democrats staged a last-ditch fight to revive the KidsCare program with an amendment to the state budget.

Republicans said allowing the amendment would have "blown up" the state budget, even though the program costs the state nothing.

...Just a few months ago, the House had passed a bill restoring KidsCare with strong bipartisan support. But Senate President Andy Biggs wouldn't give the bill a hearing in his chamber.

An estimated 30,000 children of lower-income working parents would have been covered by KidsCare. The program was suspended by the Legislature during the recession. 

The cost of the program is covered by federal dollars at least through 2017 and possibly through 2019. 

"Get him out of my sight, Lou! I want him in town, though. He's still under contract. I want you in town, Fink...and out of my sight." --Barton Fink

The big ACA story Thursday morning was about UnitedHealthcare announcing that while they're still available across half the country for 2016, they may drop out of the ACA exchanges next year (2017). Furthermore, they're cutting their marketing/promotional efforts for the exchanges and, in an additional exclusive tidbit from myself, they've also informed their commission-based brokerage network that they'll be slashing their commission rates by as high as 80% for exchange-based enrollments. On top of that, they've even supposedly deliberately disabled various database tools used specifically by brokers to assist in helping people sign up for UHC policies through the exchanges.

Hat tip to Politico's Paul Demko for the story (subscription only) and Katie Jennings for the tip. According to the Arizona Dept. of Insurance, an 11th CO-OP is being pulled off of the ACA exchange literally hours (as in, less than 24 hours) before the launch of the 2016 Open Enrollment Period:

Meritus Health Placed Under Supervision

Two Arizona health insurance companies have been placed under supervision by the Arizona Director of Insurance, Andy Tobin.  Director Tobin filed an Order for Supervision on October 30, 2015, to place Meritus Health Partners and Meritus Mutual Health Partners into supervision.  Meritus declined to consent to the Order for Supervision.  The Meritus companies’ ability to write new policies or renew existing policies is suspended.  The Centers for Medicare and Medicaid Services has removed the Meritus plans from the Marketplace.  Director Tobin, appointed as Supervisor under Arizona law, will oversee the two companies.

IMPORTANT: See this detailed explanation of how I've come up with the following estimated maximum requested weighted average rate increases for this state.

As explained in the first link above, I've still been able to piece together rough estimates of the maximum possible and most likely requested average rate increase for the state's individual market:

As noted in the table, the Arizona analysis is even more fuzzy than most other states, because the enrollment/market share estimate for Health Net is a guess. According to their Q2 2015 SEC filing (page 49), Health Net had 69,000 people enrolled in individual policies in Arizona as of 6/30/15. They don't break out grandfathered/transitional policies (I'm assuming about 14% combined), nor do they provide a PPO/HMO split, so I'm just going with 50/50, or 60K total ACA-compliant enrollees.

Florida Gov. Rick Scott announced Thursday that his administration will file a lawsuit against the federal government for threatening to withhold more than $1 billion in funding for hospitals if the state fails to expand Medicaid.

“It is appalling that President Obama would cut off federal health care dollars to Florida in an effort to force our state further into Obamacare,” Scott said, citing a 2012 Supreme Court ruling that said the federal government couldn’t put a “gun to the head” of states to force them to expand Medicaid under the health care law.

The Obama administration quickly accused Scott of misconstruing that court decision because the state is not being forced to do anything. And White House spokesman Josh Earnest blasted the governor for putting politics above people.

Lest we forget, the Affordable Care Act's Medicaid expansion provision is still churning along in over half the country...

Arizona may not be adding Medicaid expansion recipients at nearly the same rate as states like Michigan, West Virginia and Arkansas, but they're doing a pretty good job; AZ is now up to over 192K people, or about 41% of the estimated 469K uninsured individuals who are eligible for Medicaid:

During the month of June, 19,736 were added to AHCCCS in the Proposition 204 Restoration Category (0-100% FPL) and 4,771 were added to Adult Expansion category. To date, 192,268 Arizonans have been added since January. The total AHCCCS population now stands at 1,552,186.

 

The QHP number (80K) looks about right, but that 67K Medicaid number bears no connection whatsoever to the existing number (91,115). On the other hand, AZ has some sort of unusual situation going on with their Medicaid program anyway, so I'll leave that one alone for now.

As of March 1, the enrollments were behind projections, with just about 58,000 enrolled. But Plese said she’s seen unofficial figure that show the number rose to about 80,000 by mid-March.

Another 67,000 who used the federal site had been determined to be eligible for Medicaid.

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