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What’s the Diagnosis for Arizona’s Health Insurance Exchange?

People who are concerned about how an Arizona health insurance exchange will work should consult with an Arizona health insurance broker.
Thursday, 03 January 2013

arizona_diagnosis_health_insurance_exchangeWhen one considers that the promise of healthcare reform and affordable coverage was a major reason why Obama was elected in the first place, it is surprising how much division it has caused throughout the country. No matter where you stand politically, the Affordable Care Act is in the final stages of implementation and it looks like it's here to stay. Arizona is one of many states where a significant portion of the electorate has been forced to go without health insurance; either because they couldn't afford private insurance or they had a preexisting condition. The introduction of state health insurance exchanges is designed to bring solutions for affordable healthcare.

The Affordable Care Act may have already made some headway in getting more Americans insured, but this year is when the final phases of the legislation go into effect. In other words, it's where the rubber meets the road. Starting in 2014 when the individual mandate takes effect, people who are currently uninsured will have the option to buy affordable insurance from a state health insurance exchange. Each state has the option to customize its own plan based on the unique healthcare needs of its citizens, but on November 28, 2012, Governor Jan Brewer told federal officials that her state would default to the federally managed health insurance exchange.

Why did Arizona opt out of a state-run exchange?

Despite the fact that a special steering committee was developed specifically for the Arizona Health Insurance Exchange, and despite the fact that this committee met regularly, feedback from the group indicated that there was no immediate need to form a state-based exchange. Three options remain on the table for exchanges, which must be in place by the time Obamacare is fully implemented in 2014. One is that a state can operate its own exchange under federal rules. Another one states that multiple states can join together to form an exchange under federal rules, and a third option is that the federal government will put its own exchange into place for that state.

When Brewer decided to let the federal government run the Arizona exchange, it wasn't out of protest against Obamacare; it was an honest assessment of the situation. Because states must operate their exchanges under federal rules anyway, and there is currently a lack of clarity about how it would benefit a state to run its own exchange; she believes that it would be an unnecessary expense to start one at this time.

How will Arizona's health insurance exchange work with insurance providers?

Before the decision was made to default to a federal exchange, the Arizona Department of Insurance conducted research on the development and management of an exchange, including the selection of qualified health plans, risk adjustment procedures, quality ratings systems and transitional reinsurance. It was after this information was gathered that the committee expressed its support for the "market facilitator approach," which means the exchange would contract with any qualified health plan as long as it met certain criteria.

In addition to determining how the state would work with insurance companies, information technology was also a major part of the plan. This included designing and building small business exchange components and making major upgrades to Medicaid eligibility systems. By participating in the "Enroll UX 2014" project, the architects of the exchange learned more about design standards that all states can use.

One of the most important elements of any health insurance exchange is the EHB, or Essential Health Benefits. The Affordable Care Act requires that small group plans include certain defined health benefits, provided they are not a grandfathered plan. During the Arizona analysis period, the state considered a package of benefits that would result in the final benchmark plan. Arizona chose United Healthcare's EPO, with supplemental pediatric and vision coverage.

Is a federally-run healthcare exchange the right choice for Arizona?

According to an editorial in The Arizona Daily Star, "Federal Health Exchange Best for Arizona" (published in the Yuma Sun), the decision to forgo a state-based health insurance exchange was met with mixed reactions. Some questioned the wisdom of this decision, particularly Democratic leaders in the Arizona House, who say it removes any possibility of local influence on the choice of insurance providers.

However, president-elect Andy Biggs of the Arizona Senate has expressed his support for the governor, claiming that even if Arizona ran its own exchange it would still be inappropriately micromanaged by the federal government. It does seem ironic that Governor Brewer and her supporters would make such a move, given their vocal opposition to Obamacare. Their primary complaint with the law was how it took away the local role of health care. By opting for the federally managed exchange, Brewer has all but sealed the fate of the state's local influence.

Confused about Obamacare? Find a health insurance broker

People who are concerned about how an Arizona health insurance exchange will work should consult with an expert. An Arizona health insurance broker will be able to help you find the most affordable insurance available and save a lot of time

Photo Courtesy of Ambro / FreeDigitalPhotos.net

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