Arizonans navigate ‘Obamacare’ uncertainty

When President Donald Trump singled out Arizona’s health-insurance rate increases as a symptom of the Affordable Care Act’s ills, he might as well have described Avondale resident Samantha Smoker’s situation.

Smoker and her husband paid $1,400 a month for a family health plan last year, but her insurance provider was one of six companies that dropped out of Arizona’s ACA marketplace this year.

The Smokers earn too much to qualify for government subsidies that lower the insurance bills of low-income and some middle-income families. Their monthly tab for a marketplace plan would have jumped this year to $3,316 — roughly three times as much as the family’s mortgage payment.

It was unaffordable. And for the first time in her life, Smoker thought her family would go without health insurance.

“We were under unbelievable stress,” Smoker said.

The Smokers, who own a small roofing company, averted a health-coverage crisis when they signed up for a less-expensive plan designed for small businesses.

But with Congress sprinting ahead

with efforts to repeal and replace the act, Smoker said she’s worried the health law’s protections will disappear and the insurance market will become more unstable.

That’s a troublesome possibility for the Smokers because their teen has special health-care needs.

“Who knows how much more expensive it will be, especially if they start monkeying around with it?” she said.

Arizona’s Affordable Care Act rates have become routine talking points for pro-repeal lawmakers in Congress.

President Trump and GOP congressional leaders have made a case that higher premium costs in Arizona are a key reason why the health law known as “Obamacare” needs to be repealed and replaced. Arizona Gov. Doug Ducey has echoed that sentiment, describing Arizona as “ground zero” for the health law’s woes.

“Obamacare premiums nationwide have increased by double and triple digits,” Trump said during his Feb. 28 address to Congress. “As an example, Arizona went up 116 percent last year alone.”

The triple-digit increase cited by Trump applies to Arizona’s “benchmark” plan — a term used to describe a community’s second-lowest-cost silver plan. The health law calculates subsidy rates based on a benchmark plan, so communities with higher insurance rates have more generous subsidies.

Many Arizona marketplace watchers believed that Arizona’s benchmark rates during the first three years of the Affordable Care Act were artificially low, as some insurers priced plans far below competitors in an attempt to capture a larger market share.

Arizona had the thirdleast-expensive benchmark rates in 2016 among 44 states and Washington, D.C., according to a U.S. Department of Health and Human Services report released last October.

That changed this year, as six of eight health insurance companies exited Arizona’s marketplace, leaving only two marketplace insurers. Every county except one had just one insurer.

Rates predictably skyrocketed this year. Arizona’s benchmark soared to the third-most-expensive among the same 44 states, according to HHS.

Although Arizona residents now have fewer choices and higher rates, higher rates mean higher subsidy levels. So despite the triple-digit increase in benchmark rates, some low- and moderate-income consumers may not pay any more for insurance than they did one year ago.

But consumers like Smoker who do not qualify for subsidies are left with substantially higher monthly health-insurance premiums. It’s a small percentage of consumers who are affected: middleand upper-income earners who buy their own insurance.

Most Arizonans were not affected by the escalated rates because they get health insurance from an employer or government programs such as Medicare, Medicaid or the Department of Veterans Affairs.

A total of 196,231 Arizona residents signed up for or were automatically reenrolled in a marketplace plan as of the Jan. 31 deadline. HHS figures show that 79 percent of those consumers received subsidies in the form of tax credits or cost-sharing provisions.

Despite the skyrocketing insurance rates in Arizona, Obamacare consumers who were eligible for subsidies paid less of their own money this year compared with a year ago, according to HHS figures.

But for families like the Smokers who don’t qualify for subsidized coverage, the prospect of dramatically higher prices induces fear and anxiety.

“Never in a million years, at my income level, I thought that I would be without health insurance,” Smoker said.

She is particularly worried about her 16-year-old autistic son, who made dramatic improvements with frequent therapy sessions. He learned life skills such as conversation, reading restaurant menus or interpreting facial expressions.

But Smoker worried that her family could no longer afford an insurance plan that covered her son’s therapy sessions.

Because Smoker’s United Healthcare plan from last year disappeared, she was going to be enrolled automatically in the only remaining marketplace option this year for residents in the Phoenix area: Ambetter from Health Net.

If she chose the Ambetter plan, she would have paid $3,316 per month for a gold family plan that offers more-robust coverage than a silver plan. As much as she needed coverage, she decided her family could not afford to pay that much for monthly premiums in addition to other cost-shifting provisions such as a deductible and co-insurance.

She instead followed the advice of Meryl Bergstein, a health-insurance broker, who had a simple proposition: Why not buy a health plan designed for a small business?

Smoker enrolled in a United Healthcare plan for small businesses. Though United Healthcare dropped out of Arizona’s marketplace, it still offers plans for businesses.

“The individual market is what collapsed in Arizona, not the smallbusiness market,” Bergstein said.

Smoker said the United Healthcare plan, which costs about $1,600 per month, has met her family’s needs. All the family’s medications and doctor visits are covered.

Although Smoker, 62, says this year’s health-insurance crisis has been solved, she is apprehensive about next year.

She worries that the final plan to replace Obamacare might not include the same protections for existing medical conditions. The House Republicans’ initial plan would make insurers cover existing medical conditions, but would also allow insurers to charge 30 percent more for consumers whose coverage lapses.

The initial GOP bill was pulled before a vote when the House Republican’s most conservative members, known as the Freedom Caucus, declined to support the bill. Trump and House Republican leaders have signaled that compromise talks are ongoing.

Smoker worries that a new GOP bill may not include mandatory coverage for benefits such as therapy, which Smoker’s youngest son needs to continue making strides. Health advocates fear that Arizona’s Medicaid program may be forced to cut behavioral health, autism therapy and aid to the disabled under the Republican plan, which would overhaul Medicaid financing beginning in 2020.

She also would like the replacement to include a health-law provision allowing adult children to stay on their parents plan until age 26 — a key factor, since Smoker has a 21year-old son who is excelling at Arizona State University.

Beyond the potential loss of other ACA protections such as a set of mandatory benefits, Smoker said she is uneasy about the prospects of maintaining a market where people can freely move between employment-based insurance and private marketplace coverage.

“I think about how things are going to affect me, but I also think about how it will affect other people,” Smoker said. “Even if you don’t have a (medical) condition now, are you so shortsighted to think that you will live a charmed life and never have a condition?”

Though she is a smallbusiness owner, Smoker does not agree that relaxing regulations to spur competition will automatically benefit consumers.

“If we think the market is going to do all these things, you are factoring out greed,” Smoker said. “In order to make money, you are going to have to do inhumane things. You are going to have to eliminate people who need services. That lowers risk.”

“When we’re talking about health and people’s lives, lowering risk gets ugly.”

“Even if you don’t have a (medical) condition now, are you so shortsighted to think that you will live a charmed life and never have a condition?” SAMANTHA SMOKER AVONDALE RESIDENT, ADDRESSING SOME OF HER CONCERNS ABOUT POTENTIAL ‘OBAMACARE’ REFORM