healthcare group
HB 2569 changes eligibility, administration and underwriting of the Healthcare Group program administered by the Arizona Health Care Cost Containment System (AHCCCS). The bill makes various technical changes to Healthcare Group statutes.
The Committee of the Whole adopted the Health Committee amendment to appropriate $5 million from the Health Education Account for Healthcare Group in FY 2002-2003. Makes a technical change.
Healthcare Group was established in 1988 to provide health insurance to small businesses with fifty or fewer employees. Enrollees must be self-employed, working for a small business or working for a political subdivision. As of 1/17/02, Healthcare Group has 11,267 enrollees in eleven of fifteen counties. The average number of employees per group is 1.7. The Department of Economic Security estimates that in 1999, 97 percent of Arizona’s employers consist of fewer than 100 employees compared to the national average of 41 percent.
Two health plans, Mercy Care Plan and University Physicians, provide coverage for Healthcare Group that offer inpatient and outpatient services, prescription drugs, laboratory and radiology, emergency services and out-of-state emergency services. The benefits are similar to private commercial insurance.
Currently, Healthcare Group offers a three tired premium structure based on age with no means testing. Members must pay a premium at the first of the month prior to the month of coverage. The premiums are used to cover a portion of the administration and medical costs incurred by the health plans. The State provides reinsurance to offset losses by the health plans.
In recent years, either tobacco tax or tobacco settlement monies have funded Healthcare Group reinsurance. Laws 2001, chapter 374 appropriated $7 million from tobacco tax for FY 2001-2002. This was reduced to $6 million during the second special session. There is currently no designated funding for Healthcare Group in FY 2002-2003.
The health plans working in conjunction with AHCCCS identified changes in an effort to improve the management and cost effectiveness of Healthcare Group. HB 2569 incorporates the statutory recommendations made by health plans.
HB 2569 enables AHCCCS to adjust premiums and copayments based on hierarchical eligibility and means testing. The bill shifts the administrative duties from the health plans to AHCCCS. This will allow AHCCCS to utilize a universal application and screen applicants for other public programs that may be available. AHCCCS will be able to provide one benefit plan instead of multiple plans in an effort to reduce administrative complexities and costs.