Affordable Care Act Update

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Prices are going up in Arizona for those getting insurance through the Affordable Care Act as there are fewer providers, the enrollment period will be underway soon, and there will be a new product available. Swapna Reddy, clinical assistant professor in the Arizona State University College of Health Solutions, will bring us up to date.

TED SIMONS: ENROLLMENT STARTS TODAY FOR THOSE SHOPPING FOR A HEALTH- INSURANCE PLAN BY WAY OF THE AFFORDABLE CARE ACT. BUT A VISIT TO THE MARKETPLACE WEB-SITE FINDS FEWER OPTIONS AND HIGHER COSTS THAN OFFERED LAST YEAR. JOINING US NOW IS SWAPNA REDDY, A CLINICAL ASSISTANT PROFESSOR AT ASU'S COLLEGE OF HEALTH SOLUTIONS. WEDNESDAY ON WHAT IS SO GREAT?

TED SIMONS: WHAT IS THE STATE OF THE AFFORDABLE CARE ACT, OBAMACARE, WHAT IS THE STATE OF THAT PROGRAM?

SWAPNA REDDY: SO IT'S A LITTLE TOUGH IN ARIZONA THE PICTURE ISNT LOOKING SO GREAT FOR THE 2017 IN ARIZONA. WHAT WERE SEEING IS BASICALLY 116% INCREASE IN PREMIUMS FROM 2016 TO 2017. WE ARE SEEING THE HIGHEST INCREASE IN THE UNITED STATES. WE ARE DEFINITELY NOT SEEING PICTURES WE WOULD WANT.

TED SIMONS: WHY IS THAT HAPPENING? WHY ARE THE INCREASES HAPPENING?

SWAPNA REDDY: GOOD QUESTION. SOMETHING THAT IS IMPORTANT TO KNOW IS IN 2014 WE HAD SOME OF THE LOWEST PREMIUMS IN THE UNITED STATES. WE HAD ONE OF THE MOST ROBUST INSURANCE MARKETPLACES WITH TONS OF INSURERS. WE HAD 11 INSURERS IN THE MARKETPLACE AND THE SECOND LOWEST PREMIUMS IN THE UNITED STATES. A LOT OF WHAT WAS HAPPENING IS WE HAD AN EXISTING, FAIRLY SICK POPULATION HERE THAT NEEDED INSURANCE AND WE HAD A LOT OF UNINSURED FOLKS. BECAUSE INSURANCE COMPANIES CAN'T DISCRIMINATE BASED ON PREEXISTING CONDITIONS UNDER THE ACA THEY COULD NOT BASE PREMIUMS ON AN ADJUSTMENT RISK POOL BECAUSE THAT IS HOW THEY DO IT AND DETERMINE PREMIUMS IN THE PRIVATE MARKET. THEY COULDN'T DO THAT SO THEY TOOK A GUESS AND IN A LOT OF WAYS THE GUESS WAS WRONG IN ARIZONA. THERE IS ANOTHER THEORY IN SOME WAYS THEY UNDERSOLD THE PREMIUMS BECAUSE THERE WAS SO MUCH COMPETITION. ONE OF THE MAIN PURPOSES OF THE ACA IS TO CREATE AN AMAZON OF A MARKETPLACE FOR HEALTH CARE AND THAT WAS KIND OF WHAT WAS HAPPENING IN 2014.

TED SIMONS: WE HAD POLICIES THAT WERE UNDERPRICED AND A MARKET THAT WAS OVERSATURATED. SIX OF THESE COMPANIES ARE LEAVING NEXT YEAR SAYING FOR FINANCIAL REASONS. BLUE CROSS, 51% HIKE AND THE OTHER WAS 75% THE ONLY CHOICE IN MARICOPA COUNTY. ARE WE NOW AT A LEVEL THAT WE SHOULD HAVE BEEN ALL ALONG?

SWAPNA REDDY: I DON'T THINK THAT HAVING REDUCED INSURERS ARE NECESSARILY WHAT WE SHOULD HAVE HAD ALL ALONG. THAT'S CERTAINLY NOT ONE OF THE MAIN PURPOSES OF THE ACA.WELL COMPETITION IS CENTRAL TO THE ACA. IN TERMS OF PREMIUMS, I THINK WHAT IS HAPPENING IS THE MARKET IS ADJUSTING ITSELF. WHAT WE SAW WERE A LOT OF SICK PEOPLE THAT NEEDED HEALTH CARE AND ENDED UP BEING HIGH UTILIZED IN ARIZONA AND WE DIDN'T FRANKLY HAVE ENOUGH YOUNG, HEALTHY PEOPLE TO SIGN UP TO OFFSET THE COSTS. UNTIL WE GET MORE YOUNG, HEALTHY PEOPLE OR LOW UTILIZERS OF HEALTH CARE TO SIGN UP WE WILL NOT GET THE MARKET ADJUSTMENT WE NEED.

TED SIMONS: IT IS ARGUED IN ORDER TO GET THE YOUNGER, HEALTHIER PEOPLE INVOLVED THE PENALTY HAS TO INCREASE FOR NOT BEING INVOLVED AND TO HELP THOSE GETTING HIT WITH THE PRICES MORE IN THE WAY OF SUBSIDIES HAVE TO BE INVOLVED. EITHER ONE OF THOSE WORK IN THE EQUATION?

SWAPNA REDDY: ABSOLUTELY. WE DEFINITELY NEED TO GET MORE YOUNG, HEALTHY PEOPLE INVOLVED. THE PENALTIES DON'T SEEM TO BE MUCH OF A PENALTY SO THERE IS DEFINITELY TALK THE PENALTIES NEED TO BE MORE STRINGENT. THERE IS TWO CAMPS ON THAT PIECE. IN TERMS OF THE SUBSIDIES THAT IS A GREAT POINT AND IT IS VERY IMPORTANT TO THINK ABOUT THE SUBSIDIES BECAUSE THE PREMIUMS SEEM HIGH BUT 74% HOF THOSE ENROLLED IN ARIZONA ARE ELIGIBLE FOR SUBSIDIES SO THEY MUTE THE INCREASE IN THE PREMIUMS. I WILL GIVE YOU A QUICK EXAMPLE. IN 2016 THE AVERAGE PREMIUM INCREASE ENDED UP BEING ABOUT $324 PER PERSON BUT WHEN YOU APPLIED THE SUBSIDIES IT ENDED UP BEING $120 A PERSON. THEY MAKE A HUGE DIFFERENCE.

TED SIMONS: IT HAS BEEN ARGUED IF THE AFFORDABLE CARE ACT NEVER HAPPENED, THOSE AGAINST THE PLAN, SAY WE WOULD NEVER HAVE SEEN THOSE KIND OF PRICES BECAUSE THE INCREASES WERE NOT HAPPENING THAT QUICKLY. THOSE WHO ARE FORM OBAMACARE SAY IF WE HAD NOT THAT THE ACA THE INCREASES WOULD BE HIGHER. WHAT DO YOU THINK?

SWAPNA REDDY: IT IS HARD TO SAY. WE PASSED THE ACA IN 2010 AND THE MARKETPLACE HAS BEEN IN PLACE SINCE 2014. WE CANNOT LOOK AT THE MARKET WITHOUT LOOKING AT WHAT HAPPENED WITH THE ACA. YOU CANNOT SAY THE PRICES WOULD BE HIGHER THAN THEY ARE TODAY. WE HAVE 20 MILLION PEOPLE IN THE UNITED STATES WHO ARE INSURED THAT WERE NOT INSURED BEFORE. IN ARIZONA, IT WAS 17% IN 2014 AND NOW IT IS 70%.

TED SIMONS: ON THE PRO SIDE THERE ARE MORE PEOPLE INSURED BECAUSE OF THE ACA. AND THERES NO SIGN OF THAT ABATING?
SWAPNA REDDY: NO IN FACT, THE PROJECTIONS FIND THAT IN 2017 NATIONALLY MORE PEOPLE ARE GOING TO BE ENROLLED IN THE MARKET PLACE. IF MORE PEOPLE CONTINUE TO ENROLL IN THE MARKETPLACE THAT MIGHT CREATE THE MARKET ADJUSTMENT AND MIGHT CREATE THE CORRECTION THAT WERE LOOKING FOR

TED SIMONS: IT STANDS TO REASON IF EVERYONE IS FLEEING AND ALL THESE THINGS ARE LEAVING THE STATE AND COUNTY DOESN'T THE MARKET CREATE A VACUUM AND SHOULDN'T OTHERS COME IN SAYING WE HAVE A CHANCE HERE?

SWAPNA REDDY: THAT IS A GREAT POINT. I WILL GIVE YOU AN EXAMPLE IN AUGUST, THIS SUMMER, A COUNTY IN ARIZONA WAS THE ONLY COUNTY IN THE STATE THAT DIDN'T HAVE AN INSURER FOR A WHILE AND THEY GOT A LOT OF NATIONAL PRESS. THEN WHAT ENDED UP HAPPNENING WAS THAT BLUE CROSS BLUE SHIELDS ENDED UP COMING IN AND COVERING THE COUNTY. INSURANCE IS A BUSINESS AND CARRIERS ARE INTERESTED IN MAKING A PROFIT AND IF THEY LOOK IN ARIZONA AND 2017 AND SEE THERE IS A PROFIT TO BE MADE I HAVE NO DOUBT THEY WILL COME BACK.

TED SIMONS: FOR THOSE WHO ARE WITH ONE OF THE COMPANIES THAT ARE NOT OFFERED NEXT YEAR WHAT DO THEY DO? IS IT AN AUTOMATIC SHIFT OVER?

SWAPNA REDDY: IT DEPENDS ON WHAT COUNTY. IN PIMA COUNTY THERE ARE THREE INSURERS. IF ONE OF THEM IS NOT YOUR PREVIOUS, YOU LOOK AT WHAT IS AVAILABLE, SHOP AROUND AND FIGURE OUT THE BEST PLAN FOR YOU. YOU CAN DO THAT ON YOUR OWN ON HEALTHCARE.GOV OR THERE ARE PATIENT NAVIGATORS AND COMMUNITY ADVISORS WHO CAN HELP. IF YOU ARE IN A COUNTY WITH ONE CHOICE, AND THERE ARE 13 COUNTIES LIKE THAT, BLUE CROSS BLUE SHIELDS IS YOUR CHOICE. SOMETHING THAT IS IMPORTANT TO REMEMBER IS THAT EVEN THOUGH THERE MIGH NOT BE MANY INSURERS, THERE ARE MANY PLANS. BLUE CROSS BLUE SHIELDS IS OFFERING NUMEROUS PLANS.

TED SIMONS: THE OFF MARKETPLACE PLANS FOR THE HIGH INCOME FOLKS ARE SAY SEEING INCREASES?

SWAPNA REDDY: THEY ARE BUT THEY SHOULD NOT MIRROR WHAT IS HAPPENING IN THE MARKETPLACE.

TED SIMONS: YOU DON'T THINK SO?

SWAPNA REDDY: I DON'T THINK SO.

TED SIMONS: NOT QUITE SO MUCH. FOR THOSE WHO SAY THIS HAS BEEN AN -- A MITIGATED DISASTER. SOME SAY THIS IS HELPING PEOPLE BE INSURED WHO WOULD NOT BE OTHERWISE. WHO IS RIGHT?

SWAPNA REDDY: I DON'T WHO IS RIGHT. I THINK THAT ALL THINGS THAT WE DISCUSSED WITH THE AFFORDABLE CARE ACT, IT IS COMPLICATED. IT IS NOT A DISASTER AND IT ISN'T PERFECT. ITS SOME WHERE SORT OF IN THE MIDDLE AND IT DEPENDS ON WHICH POPULATION WERE SPEAKING OF. WE KNOW THERE IS A CERTAIN CANDIDATE THAT WANTS TO REPEAL THE ACA AND HAS HIS OWN IDEAS ABOUT HOW TO FIX HEALTH CARE IN THE UNITED STATES. THERE IS ANOTHER CANDIDATE THAT WANTS TO EXPAND AND ONE OF THE SOLUTIONS IS A PUBLIC AUCTION.

TED SIMONS: THE PUBLIC AUCTION IS WHAT?

SWAPNA REDDY: A GOVERNMENT SPONSORED INSURANCE PLAN. IT IS NOT GOVERNMENT SPONSORED HEALTH CARE BUT GOVERNMENT SPONSORED INSURANCE PLAN THAT WOULD COMPETE WITH THE PRIVATE INSURERS.

TED SIMONS: AND THIS IS THE LAST QUESTION. THIS IS ALL THEORETICALLY BUT ARE WE HURDLING TOWARD SINGLE PAYER AND MEDICARE FOR ALL?

SWAPNA REDDY: THAT, LIKE EVERYTHING ELSE, DEPENDS ON WHO WE ARE TALKING AND THEIR OPINION ON THE ACA. I WOULD SAY WERE NOT THERE YET, WE ARE SEEING THE ADJUSTMENT AND CON TRACTIONS OF A MAJOR PIECE OF LEGISLATION AND THERE IS AN OPPORTUNITY TO SEE A MAJOR MARKET ADJUSTMENT. IF WE DON'T SEE THAT WE WILL HAVE TO FIGURE IT OUT BECAUSE 20 MILLION PEOPLE ARE INSURED AND WE NEED TO FIGURE OUT HOW TO MAKE IT WORK FOR THEM

TED SIMONS: THE DEATH OF OBAMACARE IS GREATLY EXAGURATED?

SWAPNA REDDY: I THINK SO.

TED SIMONS: ON WEDNESDAY A SLOW AND STEADY RECOVER FOR THE LOCAL REAL ESTATE MARKET. AND WE WILL HEAR ABOUT WHAT CHILD ADVERSITY MEANS FOR THE WELL BEING OF COMMUNITIES. THAT IS TOMORROW ON ARIZONA HORIZON. THAT IS IT FOR NOW. I AM TED SIMONS. THANKS SO MUCH FOR JOINING US. YOU HAVE A GREAT EVENING. ARIZONA HORIZON IS MADE POSSIBLE BY THE CONTRIBUTIONS OF YOUR FRIENDS AND THE MEMBERS OF ARIZONA PBS. THANK YOU.

Swapna Reddy, clinical assistant professor, Arizona State University College of Health Solutions

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