Arizona premiums and subsidies: How low?

The Department of Health and Human Services (HHS) announced that Arizona health insurance premiums will be lower than expected and considerably lower than in other parts of the country. This is good news for 600,000 people in our state who do not have health insurance. 90% of those folks will get help with their premiums.  Another 300,000 will qualify for AHCCCS (medicaid).

This is good news, but it doesn’t mean much until people go onto the Exchange/Marketplace and look at specific plans. Their premium will be based on their age and where they live – not on their health condition. But I’ve gotten ahead of myself here, because the first step will be to see what kind of premium help they will receive.

Step 1:  A person will put in her social security number and get connected to her IRS tax records to confirm her income. In a matter of minutes (seconds?), she will be told what level of subsidy she will receive.  The older she is and the lower her income, the bigger her subsidy will be. Let’s say she gets a $400 subsidy.

Step 2:  Knowing she will get a $400 subsidy, she now shops for a plan. She might start by looking at a Silver plan and what each insurance company’s plan looks like.  What is the deductible for Humana vs BCBS for their Silver plans?  What are the co-pays?  And what is the Humana premium vs the BCBS premium vs Health Net vs Meritus vs University Healthcare Marketplace? This is the Tucson health insurance market.

THE PLAN NETWORK is something else she must consider:  If she currently sees doctors and wants to continue to see them, she’ll need to know which plans they are in. For example, if a person wants to see University Physicians doctors and go the the University Medical Center (UMC), she will probably have to enroll in a University Healthcare Marketplace plan.  Humana contracts with UMC for their Medicare plans, but I don’t know if their under-65 plans will.

Of course, many people who do not currently have health insurance don’t have a doctor, so their plan choice will be easier. But I have a number of clients who currently have Blue Cross Blue Shield of AZ coverage.  They might want to make their choice simple by sticking with BCBS of AZ. Most of my clients will get a subsidy, so it will be worth their while to re-enroll through the Marketplace so they end up with better coverage and a lower premium.

Subsidies may be less than expected.  I was talking yesterday to the sales manager at an insurance company that will be in the Arizona Marketplace.  He said subsidies will be based on the second lowest-cost Silver plan premium and he said that plan has a pretty low premium.  Therefore, when subsidies are calculated for each person, it is assumed they will purchase that Silver plan.  If they purchase a more expensive plan, their subsidy remains the same, so they will pay more.

What this all means is that health insurance premiums are going to be pretty low in Arizona. But lower premiums mean lower subsidies for everybody.  What this really means can only be known when we go onto the Marketplace, put in someone’s income and get their subsidy number. The most important number will be the final cost for whichever plan a person chooses.  I saw in some article that a family of four with income of $50,000 would pay around $280 per month for a Silver plan. That is pretty awesome and I have a feeling self-employed people are going to like Obamacare health insurance plans.


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