ARIZONA STATE SENATE
Phoenix, Arizona
REVISED
Purpose
Redefines Healthcare Group
as a program within the Arizona Health Care Cost Containment System (AHCCCS)
and makes some programmatic changes relating to premium adjustments and
eligibility.
In 1981, the Legislature
authorized AHCCCS to provide affordable health care coverage to small employers
(50 or fewer employees) and political subdivisions of this State. In 1988, Healthcare Group of Arizona began
offering health insurance coverage. By
the late 1990s, the Healthcare Group health plans began losing several million
dollars each year. The program
resembled a high risk pool as a significant number of individuals with
preexisting medical conditions (medically expensive) enrolled in the
program. To maintain Healthcare Group,
the Legislature has appropriated either tobacco tax revenue or tobacco
settlement monies each year since FY 1998-1999 to reimburse the Healthcare
Group health plans for their losses through a reconciliation process.
On September 30, 2001,
Arizona Physicians IPA, one of three Healthcare Group health plans,
discontinued its participation in the program.
The two remaining health plans, Mercy and University Physicians,
continue to serve approximately 11,267 people.
Due to the departure of Arizona Physicians, Apache, La Paz, Mohave and
Navajo counties are no longer covered by the Healthcare Group network.
S.B. 1209 modifies Healthcare
Group by transferring the primary administrative responsibilities from the
health plans to AHCCCS, easing the eligibility requirements and allowing AHCCCS
to adjust premiums based on projected and actual costs. In addition to the changes in this legislation,
AHCCCS plans to streamline the benefit options into a single uniform statewide
coverage plan including identical covered services, copayments and benefit
levels.
The provisions of this
legislation result in increased administrative responsibilities for AHCCCS;
however, these costs will be offset by a portion of the premiums.
1. Reduces, from 32 to 20, the number of hours per week a person must work to be eligible for the Healthcare Group program.
2. Authorizes AHCCCS to increase or decrease premiums based on actuarial reviews of projected and actual costs. Requires AHCCCS to provide 60 days notice to the employer before adjusting premiums.
3. Allows AHCCCS to cap the amount of the premium adjustments.
4. Authorizes AHCCCS to consider certain factors when it establishes premiums.
5. Requires AHCCCS to provide reinsurance to the contracting health plans for clean claims. Defines “clean claims.”
6. Eliminates the distinction of Healthcare Group as a separate organization from AHCCCS.
7. Transfers the administration of the Healthcare Group program from the contracting health plans to AHCCCS.
8. Requires AHCCCS to provide eligible employees with information about the health benefits plan.
9. Designates a contracting health plan as the payor of last resort with the same lien and subrogation rights of licensed health care services organizations.
10. Maintains definitions for the Healthcare Group program.
11. Exempts AHCCCS from the formal rule making process for one year.
12. Repeals obsolete language.
13. Makes numerous conforming and technical changes.
14. Provides for a general effective date.
Amendments
Adopted by Committee
· Makes a conforming change
Senate Action
HEA 2/5/02 DPA 8-0
Prepared by Senate Staff
February 6, 2002