Arizona lawmakers enjoy prime health-care benefits

• Lawmakers who've worked to limit health insurance subsidies enjoy more robust benefits than most.
• State-sponsored health insurance is enjoyed by 25 of 30 state senators and 45 of 60 representatives.
• Health plans paid %248 million-plus in claims from lawmakers%2C their staff and families in 2 1/2 years.

The Arizona Legislature takes a hard line when it comes to spending taxpayer money on health care.

During its recent session, it passed measures seeking to limit lifetime Medicaid eligibility and to prohibit Arizona from establishing a state-based marketplace where residents could buy health insurance subsidized by the federal government. Some lawmakers have signed onto a lawsuit seeking to overturn Arizona's Medicaid expansion.

But those cost-conscious measures don't apply to the lawmakers' own government-subsidized health care.

Arizona lawmakers serve the public in a part-time role, but the vast majority of these elected officials take year-round health-insurance plans that are among the most generous state-funded benefits in the nation.

Most Arizona state lawmakers take those benefits, with 25 of 30 senators and 45 of 60 representatives now enrolled in state-sponsored health-insurance plans with coverage more robust and less expensive than what the average Arizona resident gets from private employers.

Elected members of Arizona's Senate and House of Representatives, their staff and dependents billed and were reimbursed by state-sponsored health-insurance plans for more than $8 million in medical claims the past 2 1/2 years, according to Arizona Department of Administration records obtained by The Arizona Republic.

Lawmakers passed bills this year that could eliminate health-insurance coverage for some Arizona residents, and a group of legislators filed a lawsuit to overturn Medicaid coverage for more than 300,000 low-income residents.

Last month, Gov. Doug Ducey signed House Bill 2643, which forbids Arizona from setting up its own Affordable Care Act health-insurance marketplace. A pending U.S. Supreme Court case, King vs. Burwell, could eliminate federal subsidies that make health insurance affordable for about 150,000 Arizona residents. States that establish their own health-insurance marketplaces could preserve subsidies, but HB 2643 bars that from happening. Ducey has said he will have a plan in the event those Arizonans lose health coverage, but he has offered no details.

Arizona lawmakers also passed Senate Bill 1092, which would impose work requirements and limit lifetime eligibility for Medicaid recipients. The federal Centers for Medicare and Medicaid Services must approve a waiver request for those limits to take effect.

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Arizona's Medicaid program, the Arizona Health Care Cost Containment System, will file a waiver request that includes SB 1092 requirements with the Centers for Medicare and Medicaid Services by Oct. 1. It's unknown whether the federal agency will approve the eligibility restrictions, but the state's Medicaid contract would not start before Oct. 1, 2016, according to Monica Coury, AHCCCS' assistant director of intergovernmental relations.

Finally, a group of 36 GOP state lawmakers in 2013 sued to overturn Arizona's Medicaid expansion, which extended health-insurance coverage to about 330,000 low-income residents. Then-Gov. Jan Brewer pushed for the expansion that was funded by the federal government and a special assessment paid by hospitals. The lawmakers contend the assessment is a tax that requires the Legislature to meet a two-thirds supermajority to enact the expansion for low-income Arizonans.

Is it hypocritical?

Some lawmakers say they don't see the need to debate their own state-provided benefits, despite voting or suing to limit coverage for others.

"I don't think there is anything inconsistent about getting health-care coverage from one's employer and eliminating a government subsidy for an entitlement program," said Rep. Justin Olson, R-Mesa, who chose coverage through a state-funded health-insurance plan instead of via his private employer, Apollo Education Group, which owns the University of Phoenix.

Olson said he co-sponsored HB 2643, which forbids a state-based health-insurance marketplace, because he hopes "to increase options for consumers" other than the Affordable Care Act. Olson is also among the 36 GOP legislators who are suing to overturn the Medicaid expansion.

Other lawmakers conceded the public might be upset when lawmakers make health-policy decisions that could eliminate coverage for some, but not themselves.

"If I was a constituent and I was faced with losing my health care because of a policy decision, I would say it is absolutely hypocritical of them (legislators) to keep their (health insurance)," said Sen. Katie Hobbs, D-Phoenix, who voted against HB 2643 and SB 1092. Hobbs said she has the state's UnitedHealthcare plan.

Tim Hogan, an attorney with the Arizona Center for Law in the Public Interest, argues that legislators should consider their own situation when enacting laws that could restrict health access for others. Hogan is representing four Medicaid recipients who are defending the expansion in the lawsuit brought by the group of dissenting legislators.

"They should consider themselves lucky that there is health insurance available to them," Hogan said. "As a result of receiving the benefits, it seems like they ought to think long and hard about attempting to restrict the availability of health care for others."

Premium benefits

State lawmakers have eight options they can choose from, and all generally offer robust benefits at lower costs than what lawmakers could get from the private sector. In other words, they typically spend less of their own money on health care with a state-sponsored health plan compared with a plan through a private employer or the private market.

Some examples:

State lawmakers, who work part time, have access to the same health plans that cover state employees, who must work a minimum of 20 hours each week to be eligible for coverage. Seasonal state employees are not eligible for coverage unless they work a minimum of 30 hours each week over 12 months. The Arizona Legislature this year wrapped up in 81 days — its fastest session in nearly five decades.

Legislators and state employees can choose plans that include an exclusive-provider organization (EPO, similar to an HMO), a preferred-provider organization (PPO) or a high-deductible plan with a health-savings account. Those state plans are offered through such health insurers as Aetna, Blue Cross Blue Shield of Arizona, CIGNA and UnitedHealthcare. They pay $18 of a $272 premium every other week for an EPO plan, or 7 percent of the plan's biweekly premium. The state pays the balance of the premium — $254 every other week for the same plan.

A private-sector employee would pay an average of $45 of a $239 premium every other week for a similar plan, or 19 percent of the overall bill, according to Kaiser Family Foundation's national survey of employer-sponsored health-insurance costs.

State lawmakers who choose the Aetna high-deductible health plan pay $12 every other week, but the state reimburses lawmakers nearly $28 every two weeks to a health-savings account.

The typical high-deductible plan in the private sector requires workers to pay $35 every two weeks, the Kaiser survey found. Some private-sector employers contribute to health-savings accounts, while others do not.

High-deductible plans are becoming increasingly common in the private sector because the premiums are typically less expensive than benefits-rich plans like an HMO or PPO. These plans are also popular in the Affordable Care Act marketplace because they typically have lower monthly premiums.

Arizona state lawmakers and employees must pay about 17 percent of the total premium for the PPO plans, but that is still a smaller share than most private-sector plans, the Kaiser survey shows.

Legislators also pay a slightly larger share of health-insurance premiums for plans that cover their entire family, but that is true of private-sector plans, too.

Arizona state employees enjoy some of the most robust health-insurance benefits in the nation and pay a smaller share of their overall tab compared with most state workers across the nation, according to a report issued last August by Pew Charitable Trusts and the John D. and Catherine T. MacArthur Foundation. The study found the typical Arizona state employee paid 7 percent of his or her monthly premium, with the state picking up the rest. Only 10 states paid a larger share of their employees' monthly health-insurance bill. The report was based on health benefits paid in 2011-13.

The Pew report did not examine how many states offered identical health benefits to elected officials and state employees, but anecdotal reports suggest that that is a common way to offer benefits in several states, said Maria Schiff, director of the state health-care spending project for the Pew Charitable Trusts.

The Arizona Department of Administration scrutinizes health-insurance options for all state employees, Senate Majority Leader Steve Yarbrough, R-Chandler, said in an e-mail. He said his main concern is to ensure that lawmakers don't receive preferential treatment over state employees.

"I don't think we could provide more or less generous coverage for a state employee because they are a lawmaker or work for the Legislature," said Yarbrough, who gets health coverage through a state-sponsored PPO plan and is among 36 lawmakers suing to overturn the Medicaid expansion. "If lawmakers are treated better than the rest of the universe of state employees as far as their health insurance plan is concerned, I would certainly want to examine why that would be the case."

What can be done?

Members of Congress, however, need to shop for their own health-insurance plan, either on an Affordable Care Act exchange or elsewhere. When Congress passed the health-care law in 2010, U.S. Sen. Chuck Grassley, R-Iowa, offered an amendment that required members of Congress to purchase health insurance through the exchange or secure a non-government plan. His idea: Put lawmakers on par with residents who had to secure their own health insurance as federal lawmakers passed new laws.

The federal government's Office of Personnel Management issued a rule that allowed members of Congress and their staff members to continue to collect the federal government's contribution toward their insurance plan, even if they bought an Affordable Care Act plan. Elected officials could decide whether they wanted their staffers to take the federal plan, or get coverage on the marketplace for small groups, called the small business health options program (SHOP).

There has been no similar proposal offered by Arizona lawmakers.

While some legislators have discussed paring benefits in the past, Hobbs said she wants to make sure state employees are protected. Arizona state employees have not received pay raises in years, so any benefit cuts would mean a de facto compensation cut.

"When you are talking about employees who haven't had raises for a long time, I think it would be one more way of not keeping qualified state workers," said Hobbs, the state Senate minority leader.

Insurance brokers who reviewed premiums paid by Arizona lawmakers said the public-employee plan is a more generous plan than what private workers get.

Henry GrosJean, a health-insurance broker, said it is not uncommon among smaller employers to split costs with employees. In other words, employees might have to pay half or nearly half of the premium.

If Arizona lawmakers paid a higher percentage of their health-insurance premiums, GrosJean said, they would get a real-world view of what many of their constituents pay for health care.

"What the Legislature needs is more skin in the game," GrosJean said. "For them to have a little more empathy toward the taxpayers, they need to pay more premium."