The Healthcare Marketplace of the federal Affordable Care Act is not one size fits all, as its application in Arkansas demonstrates.
The Healthcare Marketplace of the federal Affordable Care Act is not one size fits all, as its application in Arkansas demonstrates. Arkansas Insurance Commissioner Jay Bradford announced the federally “qualified health insurance plans” and the “qualified health plan insurers” for Arkansas on Sept. 23, noting immediately that health insurance premium rates in Arkansas will be based upon 71 different plans sold through four companies. That, under the law, is the only place individuals qualifying for Healthcare Marketplace participation under the ACA can buy health insurance. The ACA prohibits insurance companies from providing policies across state lines. As a result, the premiums charged under those plans by Celtic Insurance Company, doing business as Arkansas Health and Wellness Solutions, Blue Cross and Blue Shield, Blue Cross and Blue Shield Multi-State, and QCA Health Plans, Inc., doing business as QualChoice Health Insurance of Arkansas will vary, not only based upon the bronze, silver and gold matrix required by the ACA, but also according to age, family size, tobacco use and geography, according to Bradford's announcement. Across the lowest cost plan in the federal bronze, silver and gold matrix, Arkansas insurance premiums generally fall in the upper middle bracket of cost compared to other states participating, based upon the example of a 27-year old single participant before tax credits. Under the lowest bronze plan, the premium in Arkansas is $181 per month, which is $67 per month higher than the lowest plan nationally in Oklahoma at $114 per month, and $105 lower than the highest plan nationally in Wyoming at $286 per month. The lowest silver plan in Arkansas costs $231 per month, which is $67 higher than the lowest plan nationally in Arizona at $164 per month, and $93 lower than the highest plan nationally in Wyoming at $324 per month. And, the lowest gold plan in Arkansas costs $263 per month, which is $76 higher than the lowest plan nationally in Arizona at $187 per month, and $76 lower than the highest plan nationally in Alaska at $401 per month. But, age is not the sole factor, since each state is divided into “rating areas” where age and other factors are combined to calculate premium costs within that given area. Consequently, where one lives is also a determining factor, based upon a report for the Arkansas Insurance Department by Lewis and Ellis, Actuaries and Consultants in February. “One of the reforms enacted in the Affordable Care Act is a change to insurance rating practices which include the establishment of defined rating areas for Individual and Small Group markets,” the report states. Under Centers for Medicare Services rules proposed for the ACA, Arkansas can establish no more than seven rating areas. Arkansas currently has more than 50 rating areas, as defined by the health insurance companies operating in the state prior to the ACA, according to the report. “Currently, there are no Arkansas insurance codes or Arkansas regulations pertaining to the Individual or Small Group markets which limit how health insurance issuers utilize geography in pricing health insurance coverage,” the Lewis and Ellis study states. According to the Lewis and Ellis study, CMS would not approve the current rating area distribution in Arkansas, which would have no affect upon premiums currently charged. Under the maximum of seven rating areas allowed by CMS, Lewis and Ellis estimate that 63.4 percent of people enrolling in ACA would see “no change” to their health insurance premium costs, while 0.2 percent would see a 20-40 percent reduction, 16 percent would see a reduction of 20 percent or less; and, 0.9 percent would see a 20-40 percent increase, while 19.5 percent would see an increase of 20 percent or less. According to the study, rating area groupings of counties are based upon adjacent proximity so that Sevier, Howard, Little River, Miller, Hempstead, Lafayette, Nevada, Columbia, Ouachita, Union and Calhoun counties across Southwest Arkansas are grouped into a single rating area.