Arizona health insurance premiums to surge as tax credits end

Arizona health insurance premiums are expected to rise sharply next year, impacting both employers and individuals.

Some insurers, including Blue Cross Blue Shield of Arizona, are proposing even higher rate hikes as federal tax credits that lowered premiums are set to expire.

Dr. Swapna Reddy from ASU’s College of Health Solutions joined “Arizona Horizon” to explain what’s driving the increases and how consumers can prepare.

According to Reddy, nationally we can expect to see a nine percent increase nationally of average, the highest in a decade. There is no concrete answer for the exact increases among different insurance companies as premiums differ from company to company.

The insurance companies’ reasons for this increase is because everything else is starting to become more expensive, such as costs of care, hospital stays, doctors’ visits and drug prices. They have also mentioned that tariffs are playing a role in these cost hikes.

“We’re also seeing shortages in the health care workforce and so we have to make up for those shortages often with having to pay folks higher to also stay in their position,” Reddy said.

There are a variety of ways we can expect these rising premiums impact people. Some employers could eat the costs, the cost could transfer to the employee via higher premium, premiums might not change, but deductibles could go up and we could see more narrow networks.

“If there’s an increase in those premiums, is there’s an increase in the deductibles, expect to see those real soon,” Reddy said. “Especially if you or someone in your family utilizes health care.”

If the Affordable Care Act is not extended past this year, it could make the rising premium hit some people even harder. On average there could be a 75% increase in premiums and 55% increase in rates, according to Reddy.

“It’s going to be really important for consumers to be really smart shoppers in this time period,” Reddy said. “Just because a plan might offer really cheap premiums, be really conscious of the fact that those premiums might not give you or your family members the coverages that they need.”