Figures provided by the Arizona Department of Administration show that health plans for families and single adults with children will shoulder the most-expensive monthly premium increases beginning Jan. 1, while individuals will pay modest increases.
The Department of Administration cited federal health reform as the reason the state's health plans will carry "greater expenses and higher premiums for members," according to a June 30 letter sent to about 135,000 state and university employees and their dependents.
The letter named two provisions that the state expects will drive health-insurance costs higher. One is a requirement that insurance plans provide coverage for dependent children up to age 26. The other is the federal legislation's ban on lifetime limits, an insurance-industry practice that cuts coverage once an individual's medical expenses exceed a set amount over their lifetime.
Because the state is one of Arizona's largest providers of health insurance, its estimates could provide an early glimpse of how large employers will pass along health-reform costs to their employees.
Industry analysts say it is too early to tell how much health reform will impact the cost of insurance. Some estimates expect the initial impact on overall cost will be less than 2 percent. Many analysts agree that the true impact won't be known until 2014, when health-insurance exchanges are established to extend coverage to the estimated 32 million Americans who now lack health insurance.
"I don't know if anybody really knows what the (impact) on costs will be," said Don Mollihan, a broker and consultant with Arizona Benefit Consultants. "The entire (health-insurance) industry is trying to react to the reform as regulations are implemented. That is where the rubber meets the road."
One example is the Obama administration's requirement, unveiled this month, that all health-insurance plans cover preventive care free of charge. Such no-charge preventive care ranges from autism screening to colorectal-cancer screening for adults over age 50 to folic-acid supplements for pregnant women.
"The preventive-care requirements could add some costs, but a lot of (insurers) are already providing those services as part of their core" plans, said Patricia "Corki" Larsen, a principal with human-resources consultant Mercer in Phoenix.
Alan Ecker, Department of Administration spokesman, said health reform is "responsible for all increases for employee premiums" next year.
He noted that federal health reform passed after the Legislature approved funding for next year's state's health plan, so with no money left in the state coffers to cover the mandated changes to health insurance plans, the state opted to shift costs to employees.
The state pays for most of the premium costs, with the employee picking up a portion of the premium costs. Also, changes in premiums do not reflect other cost-shifting measures, such as increases in co-payments that people must pay when visiting a doctor or filling a drug prescription.
University and state employees who get state-sponsored coverage just for themselves won't see much of an increase in their premiums: about $1 each month under three plans offered by the state.
Increases in employee premiums for plans that cover couples and families will range from $22 to $43 a month.
Single adults with children will see those premiums increase 37 percent for an Aetna insurance plan that includes a health-savings account. The Aetna family plan and the Aetna plan for two adults will also each rise more than 20 percent. Employees who choose the state's EPO and other plans similar to an HMO for families and adults with children also will see their monthly payments rise more than 22 percent.
Dispute over letter
Yet, even as Gov. Jan Brewer's administration cited health reform as the chief reason for cost increases, the state's health-insurance premiums for employees have increased at even faster clips in the past.
In fact, employee premiums for five of eight plans next year will increase at a lower rate than they did this year.
Some lawmakers questioned the Brewer's administration's decision to send out a letter that blames health reform for the premium increases.
Rep. Kyrsten Sinema , D-Phoenix, who sat on President Barack Obama's health-reform task force, blasted the Department of Administration's letter as politically motivated.
"The Department of Administration is implying that entire increase is a result of the new health-care law," Sinema said. "It is clearly a politically motivated letter that is just not factually accurate."
Ecker, of the Department of Administration, denied any political motivation. He saw no political undertone in the letter, which was drafted by the Department of Administration's benefits-services staff and approved by the agency's director.
"It is simply designed to let members know that rate increases are coming and the reason for those increases," Ecker said in an e-mail.
Source says its hotter than balls here in AZ
For the record Jan Brewer's administration has already attempted to cut health care for children and seniors who need to get it from the government and she is one of the governors that is suing the Obama administration over this health care bill. I am pretty sure Jan Brewer's plan for the November election is to screw over as many people as possible but blame Obama and immigrants. The sad thing is her strategy is appearing to work.