Arizona's uninsured rate drops with Affordable Care Act

Arizona was among states with the largest drops in the uninsured rate last year, as 215,000 Arizonans gained health coverage during the first year of the federal health-care law’s health-insurance expansion, according to a federal report released Wednesday.

The Census Bureau reported that Arizona’s uninsured rate dropped to 13.6 percent in 2014, down from 17.1 percent in 2013. It’s the first census report on the uninsured rate that includes one full year of the Affordable Care Act’s two main features to extend health coverage to the uninsured. One key feature is a federal marketplace that sells subsidized health plans to moderate- to middle-income earners. The other is the Medicaid expansion for low-income residents.

The report said that about 215,000 Arizonans secured health insurance in 2014, but about 903,000 still had no health coverage at the end of the year. Those figures, culled from a survey, have a margin of error of less than 1 percent and do not account for those who gained or lost coverage this year.

Health-care advocates said the report showed that federal and state efforts to extend coverage to those without health insurance have started to trim Arizona's stubbornly high uninsured rate. But officials also concede more work is needed to reach a still-large segment of the population without health coverage.

"Arizona has had a long-standing problem of not having enough people with health insurance, so to see that dramatic of a drop in one year is pretty impressive," said Kim VanPelt of St. Luke's Health Initiatives, which helped organize a coalition of mainly non-profit groups to encourage insurance sign-ups.

The Census found that more than 8 million U.S. residents became insured in 2014. That put the national uninsured rate at 10.4 percent, down from 13.3 percent in 2013.

States decide whether to expand Medicaid coverage under President Barack Obama's health-care law, and the report showed states that chose to expand Medicaid had the largest drops in uninsured rates. Ten states had larger declines in their uninsured rates than Arizona's 3.5 percentage-point drop. All those states chose to expand Medicaid.

Former Republican Gov. Jan Brewer led efforts to expand Arizona's Medicaid program, the Arizona Health Care Cost Containment System, known as AHCCCS. The expansion for individuals and families that earn up to 138 percent of the federal poverty level is funded mostly through the federal health-care law and a smaller local match from an assessment paid by Arizona hospitals.

Brewer's bipartisan effort to expand Medicaid drew sharp criticism from members of her own party. Three dozen current and former GOP legislators are pursuing a court challenge that claims that the hospital assessment is a tax that requires the Legislature to meet a two-thirds supermajority for approval.

Arizona's Medicaid expansion has extended coverage to far more residents than the federal marketplace, with more than 364,000 Arizonans signing up for Medicaid coverage since January 2014, according to an AHCCCS report issued this month. About 165,000 Arizona residents purchased health insurance through the federal marketplace as of March 31.

Although the federal health-care law has survived two U.S. Supreme Court challenges, it remains a hot topic among GOP presidential candidates proposing to repeal and replace the law with alternative plans.

Arizona Gov. Doug Ducey, also critical of the Affordable Care Act, has focused his efforts on a plan to reform the state's Medicaid program. Ducey's plan would require able-bodied adults on Medicaid to pay a larger share of their health-care costs, establish health savings accounts, search for employment and face a five-year eligibility limit. The Ducey plan requires approval from the Obama administration's Center for Medicare and Medicaid Services.

Arizona had among the least expensive marketplace plans in the nation since the marketplace launched January 2014. But several insurers are seeking double-digit rate increases for 2016 to offset financial losses during the first two years of the health-care law.

Insurers also have said they plan next year to limit the number of preferred-provider plans that offer a broad choice of doctors and hospitals that consumers can choose at lower, in-network rates. More Arizonans have enrolled in less-expensive, health maintenance organization plans that have a smaller network of providers.

"The ACA (Affordable Care Act) is working effectively, with the Medicaid expansion in particular, at expanded access," said Jeff Stelnik, a Blue Cross Blue Shield of Arizona senior vice president. . "At the same time, the ACA didn't address some of the underlying challenges," such as the spiraling cost of specialty pharmaceutical drugs and hospital mergers that some predict could send health prices higher.

Consumer advocates say as more health plans seek to limit the size of networks, it will be important for consumers to scrutinize details to make sure they choose a plan that fits them when the marketplace's three-month open enrollment period begins Nov. 1.

"A lot of the insurance companies are beginning to look at what's profitable and what isn't," said Diane Brown, executive director of Arizona Public Interest Research Group education fund. "We are encouraging consumers to look at the variety of options before them."

Health advocates say they will step up efforts to reach those who still have not signed up for health-insurance coverage. Those who don't sign up for coverage and don't qualify for an exemption must pay a penalty that will gradually increase over the first three years of the law. The penalty in 2015 is the greater of $325 per person or 2 percent of household income.

VanPelt said that navigators and assisters who have reached out to consumers over the past two enrollment periods largely concentrated efforts in Maricopa and Pima counties. She expects there will be a concerted push to reach people in rural Arizonans and Latinos who need information or help signing up for coverage. as well as Latinos.