The frustration is mounting with health insurance. The website is a mess. The premiums are higher than many expected. And there’s a lot of misinformation out there, which is not making it any easier. Here are the highlights of what Arizonans need to know about health insurance changes.

The Law

On March 23, 2010 the Patient Protection and Affordable Care Act (a.k.a “ObamaCare”) was signed into law by President Obama. Insurance plans issued prior to that date are grandfathered, as long as they have not made any substantial changes. Those are the plans that the President referred to as ”you can keep your plan if you like it”.  Plans written since then will be phasing into the new Affordable Care Act upon their renewal.

Under the Act, starting on January 1, 2014 just about everyone in the United States will be required to have health insurance or face a penalty. There are exemptions from the law, such as certain religious groups, the incarcerated, Indian Tribe members, those not legally in the United States, and others.  

The law also established Exchanges (now called the Federally Facilitated Marketplace or FFM) as a means to shop for health insurance and receive a tax subsidy. Be aware that the online Exchange is where the current website problems are taking place. Some states decided to establish a State-based Exchange, but in Arizona we are part of the Federal Exchange.

The only reason to go on the Exchange is to get a tax subsidy. People who will qualify for a subsidy are generally those whose household income is under 400% of the federal poverty level and if your health insurance premium is deemed “unaffordable” by the government. Those under 138% of the federal poverty level will generally qualify for Medicaid (AHCCCS in Arizona). A good rule of thumb is the less income you make, the bigger the subsidy.

Essential Health Benefits

The law requires that every non-grandfathered plan must contain ten “essential benefits”, one of which is maternity coverage.  This is a drastic shift from the current state of individual plans in Arizona. Right now no major insurance company in Arizona offers women individual health insurance that covers maternity. Starting in January, every single new plan, whether it be for a woman, child or even a man, will contain maternity coverage.

Some of the other “essential health benefits” that will now be included are expanded mental health services, pediatric dental and vision, and medically-necessary pediatric orthodontia.

Medical Underwriting

No longer will you need to answer any medical questions when you apply for health insurance. Everybody qualifies for the new plans, regardless of any medical conditions. The rates are only based on your age, tobacco use, and location. As a result, rates are rising for everyone, since the insurance companies can no longer discriminate against those who have pre-existing health conditions. These extra claims costs have to be distributed across the board.