State insurance laws will change over the course of the next two years as legislatures work to come in line with the provisions of the 2010 Patient Protection and Affordable Care Act. This progressive series of health care reforms includes the temporary creation of high risk pools in each state to address the needs of citizens who cannot get health insurance due to pre-existing conditions. In 2014, these will be supplanted by competitive health insurance exchanges.
In the meantime, changes are already occurring. Children can no longer be excluded from coverage due to pre-existing conditions, and must be carried on their parents’ policies until the age of 26. It is more important than ever to stay abreast of insurance regulations in the state in which you currently live, or the state to which you’re planning a move. The only way to provide comprehensive, affordable coverage for yourself and your family is to understand the available plans, including potential benefits under federal safety nets like Medicare and Medicaid.
Basic Insurance Regulations
In Arizona, insurers are currently allowed to deny health coverage for pre-existing conditions to adults. In group insurance plans, if Arizona residents had previous coverage, they must be given credit towards a new policy, but there are no restrictions on premium rates. However, if the contract terms of a policy have been met and the premiums have been paid, an existing policy cannot be cancelled due to illness.
Any company with 2-50 employees can offer group coverage to employees who work 20 hours a week and who have been with the company for a minimum of six months. Anyone meeting those requirements is guaranteed coverage, and cannot be excluded entirely due to a pre-existing condition. A six-month exclusionary period is allowed, and insurers may raise premium rates if a high percentage of employees have pre-existing conditions or risk factors.
Creation of Health Care Exchanges
Arizona is currently studying options for the creation of the state’s health insurance exchange. Two initial bills failed at the close of the 2011 legislative session, but the state did enact a statute prohibiting any exchange that is formed from offering abortion coverage except in cases of severe health impairment or endangerment of life.
Pre-Existing Condition Insurance
The state’s temporary Pre-Existing Condition Insurance Plan, popularly known as the “high risk pool,” is administered by the U.S. Department of Health and Human Services. Premiums are set by age and option level. For the “standard” coverage they range from $104 to $334. Deductibles range from $1000 to $3000. After the deductible is met, co-payments for doctor’s visits average $25, with prescription drugs costing $4 to $40. Combined out-of-pocket expenses inside and outside the network cannot exceed $7,000 annually.
All Medicaid benefits are based on a percentage of the Federal Poverty Level though limits vary by state, In Arizona infants under the age of 1 are covered at 140% FPL, children 1-5 at 133%, and those 6-10 at 100%. Parents have coverage at 200%, childless adults at 100%, non-elderly blind and disabled Social Security recipients at 100%, and Social Security related elderly at 100%.
In addition to the standard federal Medicare benefits, Arizona offers Medicare Advantage plans on the HMO and PPO models via private companies approved by the Medicare administration.