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The summer of 2016 was a tumultuous one for the Arizona Health Insurance Marketplace (HIM). After having 12 plans offered on the HIM in 2015 and dropping to eight in 2016, Arizona now has only two participating carriers: Centene and Blue Cross Blue Shield Arizona (BCBSAZ).

On November 1, Arizona residents using HealthCare.gov will only have one carrier to choose from in every county except Pima. And there, one of the competitors will only offer a catastrophic plan.

Last year, more than 150,000 Arizona consumers purchased health insurance on HealthCare.gov and about 70 percent were eligible for a federal subsidy.

Centene, best known in Arizona for its Bridgeway AHCCCS-ALTCS plan, will be the only carrier available to approximately 135,000 Maricopa and Pima county consumers when open enrollment begins November 1 on HealthCare.gov.

Centene’s Arizona exchange plans are branded as Ambetter and will use the Health Net Community Care Network. Interestingly, Health Net has also reportedly contracted with Cigna Medical Group for more network capacity.

In Maricopa County consumers can choose from two silver, one bronze or one gold Ambetter plans.

In Pima County, Centene will offer one silver and

one gold plan. The county recently celebrated a decrease in the uninsured rate from 17 percent (2013) to 10 percent (2014).

More than 31,000 Pima County residents are expected to seek coverage for 2017 on the exchange, based on 2016 enrollment numbers. Ambetter’s only competition in Pima county will be from Blue Cross Blue Shield Arizona (BCBSAZ), which is offering only a catastrophic plan.

Centene’s Ambetter plans will have an average premium increase of 74.5 percent, and all are HMOs with no out-of-network benefits except emergency care.

BCBSAZ is the only insurer offering plans in the state’s 13 rural counties. Originally, BCBSAZ chose not to offer plans in Maricopa and Pinal counties. The giant carrier reconsidered its position in Pinal County after realizing approximately 10,000 residents there had no options for purchasing a plan on HealthCare.gov. BCBSAZ exchange plans were approved for an average rate increase of 51 percent.

Consumers eligible for subsidies to purchase health insurance on Health.Care.gov probably won’t notice rate hikes as subsidies rise with premium costs, but taxpayers will.

AmericansInsured through an Employer

The Source that Connects the Arizona Healthcare Community

XIX No. 10 October 27, 2016The Hertel Report - All Rights Reserved ©2016

WINTER 2017STATE OF THE STATE

Tucson: Wednesday, February 8Phoenix: Friday, February 10

WINTER 2017 SOS

REGISTER TODAYFINAL CARRIERS PREPARE FOR OEP ON HEALTHCARE.GOV

ARIZONA CONSUMERS CHOICE: HEALTHCARE.GOVCOUNTY PLANS PLANS OFFERED

Maricopa Ambetter Bronze, Silver, Gold

PimaBCBSAZ Catastrophic

Ambetter Silver, Gold

All Others BCBSAZ Catastrophic, Bronze, Silver, Gold

AVERAGE RATE INCREASES

Centene: 74.5%BCBSAZ: 51%

56%154 Million

Individual PlansU.S. Average Change

2006-2010: 6.7% 2010-2015: 4.2%

Arizona Average Change2006-2010: 2.6% 2010-2015: 4.5%

Employee Contributions toPlan Premium Costs Are Rising

Average Employee CostPremium + Deductible

United States2006: $35312010: $46882015: $6422

Arizona2006: $39532010: $53742015: $6853

Family PlansU.S. Average Change

2006-2010: 6.5% 2010-2015: 4.8%

Arizona Average Change2006-2010: 6.1% 2010-2015: 3.9%

Source: The Commonwealth Fund

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Sources tell The Hertel Report that a decision to no longer offer Medicare Advantage plans was reached by Phoenix Health Plan (PHP) leadership and CMS officials.

Questions remain about how this may affect current dual enrollees, estimated at 2,400 of the 13,000 Medicare Advantage (MA) beneficiaries assigned to PHP in 2016. AHCCCS requires its acute plans to offer a Medicare Advantage product so that members have integrated Medicare and Medicaid benefits. Rumors are swirling that PHPs Medicaid operations are up for sale. PHP has been on a “capped” agreement since it was not awarded a contract during the last contract awards in 2013. (April newsletter 2013).

Will a larger competitor swallow them up? Or will a newcomer attempt to gain some market share with a bold move into Arizona’s competitive MA and Medicaid markets?

As the Annual Enrollment Period (AEP)

continues, Arizona’s MA market lineup looks familiar. UnitedHealthcare is way ahead and Blue Cross Blue Shield Advantage is making a charge. Humana and Cigna are trying to hold position. Cigna is still suspended from sales after being sanctioned back in January 2016.

According to its September regulatory filing, Cigna is working with CMS to address the audit findings and have the sanctions lifted as quickly as possible. Cigna expects that these matters will not be resolved in time to participate in the 2017 Medicare Advantage and Part D annual enrollment period that began October 15 and ends December 7, 2016.

Aetna seems to be concentrating on the commercial group business after abandoning the HIM and reducing its MA footprint from 10 counties in 2016 to two, Apache and Maricopa in 2017.

As part of their effort to win approval from the DOJ for their merger later this year or early next.

Humana and Aetna recently proposed a plan to divest certain plans to Molina Healthcare. The transactions involve 290,000 Medicare Advantage enrollees in 21 states. This means that Molina will take ownership and ostensibly the risk, while Aetna and Humana will be paid to manage the plans during a transition phase.

It looks likely that Humana intends to continue its MA presence in the Arizona market. Aetna and Humana will continue to operate the plans for a transition period after the sale.

In Medicare Dual SNP news, newcomer WellCare will try to break into the market after its purchase of Care 1st from Blue Shield of California.

WellCare expects to provide additional details regarding the acquisition during its third quarter 2016 earnings conference call scheduled for November 1, 2016.

ARIZONA MEDICARE ADVANTAGE MARKET MOVES: OPEN ENROLLMENT SPOTLIGHT REPORT

TOP MA COMPETITORS CURRENT ENROLLMENT

2017 STAR SCORES

UNITEDHEALTHCARE

PLANS2017

STARSCURRENT MEMBERS

AARP Medicare Complete

4.5 118,476

AARP Medicare-Complete Choice (PPO)

4 9086

AARP Medicare-Complete Plus (HMO-POS)

4.5 12,124

BLUE ADVANTAGE

PLANS2017

STARSCURRENT MEMBERS

Blue Medicare Advantage Classic (HMO)

3.5 60,816

HUMANA

PLANS2017

STARSCURRENT MEMBERS

HumanaChoice (PPO)

3 10,026

HumanaChoice (Regional PPO)

4 6965

Humana Gold Plus (HMO)

4 36,743

HEALTH NET

PLANS2017

STARSCURRENT MEMBERS

Health Net Ruby (HMO)

3 25,268

UHC COMMUNITY PLAN

PLANS2017

STARSCURRENT MEMBERS

UHC Community Plan (DSNP)

3.5 40,979

MERCY CARE

PLANS2017

STARSCURRENT MEMBERS

Mercy Care Advantage (HMO SNP)

3.5 18,382

CAREMORE

PLANS2017

STARSCURRENT MEMBERS

CareMore Touch(HMO SNP)

4 11,942

Cont’d Page 3

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The Hertel Report29455 N. Cave Creek Road

Suite 118 Box 453Cave Creek, AZ 85331

602-679-4322

Publisher: Jim HammondManaging Editor: Paula Blankenship

HEALTH CHOICE

PLANS2017

STARSCURRENT MEMBERS

Health Choice Generations(HMO SNP)

3 9464

UNIVERSITY CARE ADVANTAGE

PLANS2017

STARSCURRENT MEMBERS

University Care Advantage(HMO SNP)

4.5 6281

PHOENIX HEALTH PLAN

PLANS2016

MEMBERS

Phoenix Advantage Select (HMO)

13,735Phoenix Advantage Plus (HMO SNP)

Top MA Competitors Cont’d

Claire Agnew has returned to PCH as its VPof financial operations. She was formerly the VP of revenue and practice support services.

Suzanne Buhrow is the new VP of medicalmanagement for Mercy Care Plan. In addition to her work as an academic editor and author, Buhrow formerly worked at Banner Health as its senior director clinical performance and improvement.

Angela Burzynski is now a strategyconsultant with Humana. She formerly worked as a senior manager in provider network performance for Centene.

On October 31, Monica Coury is scheduledto join Centene as its VP of legislative and government affairs after 10 years with AHCCCS. She will leave her position as assistant director, office of intergovernmental relations for Arizona’s Medicaid agency.

As they grow and adjust to an ever-changing environment, Commonwealth Primary Care ACO has restructured its leadership team. Sara Eversden was named COO, Lance Donkerbrook is CIO and Curtis Page MDis CEO and board president.

Angie Lingenfelter was promoted to practiceadministrator, neurosciences, PM&R and Orthopedics for Banner University Medicine. She was formerly a practice manager for Banner-University Medical Center.

Tony Marinello is now President and CEO ofDignity Health Arizona General Hospital. In addition to his ownership of Nexus Healthcare Consultants, Marinello was formerly the CEO for IASIS Healthcare’s Mountain Vista Medical Center.

After 42 years with Blue Cross Blue Shield Susie Nash is retiring from her position asVP of BlueCard and Medicare administration at BCBSAZ.

Bruce Pearson was promoted to CEOof hospital services for HonorHealth. He was formerly the chief operating officer for HonorHealth hospitals.

Hyasmin Riddle is now director of Medicarerisk adjustment for Humana. She was for-merly the director of HCC coding and star quality programs at Arizona Priority Care.

Cindy Scifo is now the area VP at Teladoc.In addition to her work as the VP of business development for HealthiestYou, Scifo was formerly a VP of Sales for UnitedHealthcare.

Terrence L. Stull, MD is now senior VPof research and chief research officer and Angus A. Wilfong, MD, is nowchief of pediatric neurology at Phoenix Children’s Hospital.

Due to a last minute deal, Southwest Diag-nostic Imaging (SDI) remains in-network with UnitedHealthcare (UHC).

In September, SDI and UHC warned patients and providers of the planned October 1, 2016 SDI termination.

Sources tell the Hertel Report that both rate and language compromises were made in the final negotiating hours so UHC members could continue to seek services from SDI fa-cilities in network.

Tenet Healthcare, which includes Abrazo Community Health Network, failed to reach an agreement with Humana on a deal that has nationwide impact.

Abrazo created a special website to remind patients that they can ask for continuity of care benefits from Humana, out of network.

ARIZONA NETWORK NEWS

COMINGS & GOINGS

Arizona MA & MA SNP Members Who Must Switch

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WINTER SOS MARKET UPDATES

Latest AHCCCS DevelopmentsAHCCCS Care ProgramEnrollment & Market ChangesMedicare Advantage LandscapeEnrollment UpdateUnique Contracting ArrangementsAffordable Care ActArizona HIM EnrollmentEvolution & Future ChangesAccountable Care OrganizationsArizona Market Winners/LosersMACRAStatus, Challenges, Solutions

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