Arizonans who paid some of the lowest individual insurance premiums in the nation when policies were first available under President Barack Obama's health care overhaul law in 2014 are about to be walloped.
Premiums are going up by 116 percent on average in the state come Jan. 1 for people who buy plans on the federal marketplace. Many people will see much higher increases, especially in rural Arizona. Yuma and La Paz counties are experiencing the biggest increases in the country.
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The good news: About 75 percent of the people enrolled in plans this year get subsidies to help pay their premiums, and those subsidies will go up along with premiums. The bad news: The other 25 percent -- those who make too much to qualify for subsidies because they earn more than 400 percent of the federal poverty level -- are on the hook for the entire amount.
Here's a look at key facts and issues driving the increases:
ARIZONA SEES BIGGEST INCREASES
An analysis of price increases across the U.S. by The Associated Press and health care consulting firm Avalere showed La Paz and Yuma counties will see the steepest increases in the nation. Premiums for a 50-year-old non-smoker buying a benchmark "silver" plan will go up by about 180 percent, from $377 to $1,055 per month. Even in Maricopa County, the increases are steep: The same plan will rise by 145 percent, from $289 to $708 per month. If fact, the top seven percentage-increasing counties are in Arizona: La Paz, Yuma, Gila, Maricopa, Pinal, Pima and Santa Cruz.
LIMITED CHOICES
Choices for health care plans are mainly evaporating. Only one county, Pima, will have more than one insurer, and one of those is only offering catastrophic coverage not suitable for many people. Blue Cross Blue Shield Arizona provides that coverage, plus comprehensive plans in all other counties except Maricopa. Health Net is the other insurer in the state, selling plans in Maricopa and Pima County. That shrinking number of choices is a startling change from the current landscape. Maricopa County, for instance, had 11 insurers in 2015 and eight this year. Insurers such as UnitedHealthCare and Humana pulled out because of big losses.
NEW DOCTORS
The pullout of insurers means more than half the people who currently have policies will need to change insurers at the beginning of the year, with just Blue Cross and Health Net remaining. Letters informing clients of HealthChoice, UnitedHealthcare, Cigna, Humana, Aetna and Phoenix Health Plan that they're discontinuing coverage are now being mailed. Most clients will be automatically enrolled in a remaining plan, but the new insurance may not have the same pharmacy benefits or preferred doctors and hospitals.
REASONS FOR THE INCREASES
Experts who watch the insurance market point to several reasons for the increases and high prices. Younger people aren't signing up in sufficient numbers, meaning most of the people in the plans are unhealthier patients who cost the insurers more money.
"With each subsequent year, the architects of the law hoped that healthier individuals would join the market and that that risk pool would continue to improve year over year," said Caroline Pearson, senior vice president of Avalere. "But as enrollment has fallen short of projections and growth has really stagnated, we've been left with only that high-need population who's enrolled, and that's driving up medical costs."
The problem has contributed to big increases and prompted insurers to leave the market "because they simply haven't been able to cover their medical costs based on where their premiums were set," Pearson said.
In addition, a pair of government backstops for insurer losses that were in place for the first three years of the law are ending, so companies are raising prices to build a cushion for unexpected costs.
