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August 19, 2013

Host: Ted Simons

Affordable Care Act

  |   Video
  • University of Arizona health policy expert Dr. Dan Derksen will talk about some of the basics of the Affordable Care Act, as enrollment in Health Care Marketplaces for those without insurance starts October 1.
  • Dr. Dan Derksen - Health Policy Expert, UA
Category: Medical/Health   |   Keywords: affordable care act, health care,

View Transcript
Ted Simons: Enrollment in the Affordable Care Act will start soon for those without health insurance. Much has been said and written about the upcoming changes in health care. For an overview, we welcome Dr. Daniel Derksen from the University of Arizona's Center for Rural Health and the U of A's College of Public Health. Thank you so municipal for being here. We appreciate it.

Dr. Daniel Derksen: My pleasure.

Ted Simons: I'm going throw all sorts of questions. This is one of those things, we have done so many shows on this and we still haven't covered it enough. When does the Affordable Care Act start?

Dr. Daniel Derksen: Enrollment starts October 1st. Just around the corner. And then full coverage begins January 1st of 2014.

Ted Simons: This is for Arizona or for all states?

Dr. Daniel Derksen: For all states. Arizona is doing both Medicaid expansion, which not all states are doing. Arizona is. That starts October 1st as well as the Federally Facilitated Health Insurance Marketplace.

Ted Simons: Are other states more up and operational in terms of the marketplace, in terms of these changes in general?

Dr. Daniel Derksen: I think those states that are doing a Federally Facilitated Health Insurance Marketplace are all about the same place. Arizona, I think, is ahead of other states as far as Medicaid expansion. I think we are very well prepared and ready for Medicaid expansion come October 1st.

Ted Simons: Despite the political controversy and the fussing and fighting down there at the Capitol, other machines were in operation and we are ready to go?

Dr. Daniel Derksen: It's really time to put await partisan politics and move forward with the full operations.

Ted Simons: How many insurers will be at play in Arizona?

Dr. Daniel Derksen: I think we will see a variety of insurers. It looks like there's a number of the usual insurers that will be participating and offering qualified health plans on the new marketplace. The insurers that are also vendors for the Medicaid program will continue with the Medicaid expansion so I think we will have a very robust participation by the insurers.

Ted Simons: That's a good thing because I would imagine that the more insurers you have, the lower the prices are going to be.

Dr. Daniel Derksen: I think we want a lot of competition and a lot of choices for consumers.

Ted Simons: Have we seen reports -- I think we have seen reports in other states, CBO estimates of the general costs and insurance costs have actually come in low are than expected. Is that true?

Dr. Daniel Derksen: Well, there's mixed reviews. I would say some states, for example, California and New York, they are coming back at 30, sometimes 40 percent lower for an individual who would purchase one of these qualified health plans on the new marketplace. And then in other states that we are not seeing quite as much, such as Indiana, for example, is looking at it. It might be more expensive.

Ted Simons: Do we know why some are higher, some are lower?

Dr. Daniel Derksen: I think it varies by the degree of competition. If there's a single dominant insurer in the area and there's less competition and less choices, I think we are going to see higher prices. But in states like Arizona, where we have very intense competition between insurers, I think we are going to see the price go down.

Ted Simons: OK. So in Arizona, how many folks will be affected by the Affordable Care Act in general, Medicaid expansion in particular?

Dr. Daniel Derksen: Arizona has a total population of 6.5 million. Of that 6.5 million, 1.2 million are uninsured. We’re about 18 percent. We have been in the bottom 10 states as far as percent of our population that's insure for the last three to five years. So in the first two years after open enrollment, I believe we will see about 600,000 people who are currently uninsured gain coverage. About half each, 300,000 each between Medicaid expansion and people who buy subsidized plans on the Federal marketplace.

Ted Simons: And again, it would sound, would stand to reason that the more people that sign up the better prices are going to be for everyone.

Dr. Daniel Derksen: That's right. This is the challenge, is you want as many people as possible to sign up to distribute that risk and distribute that cost. You can't really do health insurance and cover everyone. If people wait until they get sick, until they purchase their insurance. Just like automobile insurance. It's very similar. You can't wait until you have an accident to buy automobile insurance. It's the same thing with health insurance.

Ted Simons: It's basically the healthy have to help balance out the not so healthy.

Dr. Daniel Derksen: Right. You have to have a broad participation. And I think the other thing is that once you get more people covered, then that cost shifting that occurs that is eliminated.

Ted Simons: Those that don't have health insurance, are they generally more or less healthy?

Dr. Daniel Derksen: Well, many studies have been done that show people who don't have health insurance have much poorer health outcomes. There was a study published in the New England Journal of medicine that came out last summer that said that early expansion states, states that expanded Medicaid early, including Arizona, they studied Arizona in this as well. Had lower all-cause mortality when people were covered by Medicaid than when they were uninsured. So it's pretty clear there's many other studies that support that. Being uninsured is problematic for any health outcome to look at.

Ted Simons: But with that in mind with the healthy helping balance out the not so healthy, if most of those who aren't insured, what does that do to that equilibrium?

Dr. Daniel Derksen: You don't want just the folks who have chronic illnesses and preexisting conditions to sign up. You want to distribute that and get as many people participating as possible. There's a variety of reasons for that. But one of the things is you want to get people early on into prevention. I am a family physician. And I am a strong believer in prevention. You lose that opportunity when people don't have coverage. Because they can't afford to go in and see their family physician or their nurse practitioner to get preventive care.

Ted Simons: Who qualifies? In other words, whose life, whose health insurance life will change with the Affordable Care Act?

Dr. Daniel Derksen: Well, the largest change comes in that population that's less than 138 percent of the Federal poverty level. For a family of four, a family income of less than $32,000 if you are uninsured you would qualify for the Medicaid expansion. Between 138 percent of the Federal poverty limit and 400 percent of the federal poverty limit which is a range of $32,000 to $92,000 for a family of four those are the folks that will get a subsidized premium. It will be on a sliding scale. You will get more help the further down the scale you are. That helps you purchase a plan. The other part that happens is that for younger people, they may want to choose things where there's high deductibles. They aren't going to get ill. They are the young invincible. So they may chew those plans that are less costly to them overall, but they pay a little bit more out of pocket when they do visit the physician or go to the hospital.

Ted Simons: And all of those who will be choosing plans, how do they do it? Do they go to the doctor? Do they go to their computer? Do they both?

Dr. Daniel Derksen: All of the above. That's one of the multiple choice all of the above questions. I think the intent is to have an online ability just like you would purchase an airline ticket. We used to think, well that would be very clunky and hard and difficult and we wouldn't stand in lines at the airports. Now we wouldn't think to do that. We purchase everything on line it's going to be clunky and difficult at first for people to choose health insurance plans online but people will get used to it. And the system will continuously improve because it's competition between the insurers.

Ted Simons: Are insurers ready for this? A? And, B, will once this is implemented, are we going to see a major change in the health insurance landscape?

Dr. Daniel Derksen: We are seeing a major change in the health insurance landscape. We have had the lowest rate of increase of health costs over the last three years ever recorded in the last 50 years it's been recorded. Much of that people feel the experts feel, is related to the recession. But some of it is related to get go mosh people covered. Some of it’s related to people can't be dropped when they get sick or exceed a certainly am limit or lifetime limit. We are starting to see a bending of that cost curve where we are controlling costs. Costs aren't going to go down. Our population is aging. Our population is increasing. Costs won't go down but if we can bend that curve so that it's closer to the rate of growth of our economy, we will be fine.

Ted Simons: All right. Well, we will see how exciting times. Aren't they?

Dr. Daniel Derksen: It's a great unprecedented opportunity for Arizona to make progress in health outcomes.

Ted Simons: Good to have you here. Thank you.

Dr. Daniel Derksen: My pleasure.

E15 Gasoline Blend

  |   Video
  • The Environmental Protection Agency recently finalized 2013 standards for the Renewable Fuels Standard program. It requires renewable fuels, such as ethanol, to be blended into gasoline in increasing amounts each year. One of these renewable fuels, E15, has been controversial. Linda Gorman of AAA Arizona will discuss the problems associated with E15 fuel.
  • Linda Gorman - AAA Arizona
Category: Environment   |   Keywords: EPA, environment, fuel, E15,

View Transcript
Ted Simons: The Environmental Protection Agency recently finalized new standards for renewable fuels that include requiring an increasing amount of renewables, such as ethanol, to be blended into gasoline. One of those blends is called E15, and some say that E15 could hurt your car. Linda Gorman of AAA Arizona joins us to talk about E15 concerns. Good to see you again.

Linda Gorman: Thank you for having me, Ted.

Ted Simons: Give me a better definition of E15.

Linda Gorman: E15 means that 85 percent gasoline, 15 percent ethanol. So ethanol is not new to the gasoline supply. In fact, it's been blended in into gasoline for many years. Many people are familiar with E10. It is the most popular gasoline blend. But E15 was recently approved for use last summer by the EPA. So it's popping up in all sorts of gas stations.

Ted Simons: And the benefits of E15, less dependence, less use of?

Linda Gorman: Right. It's part of the renewable fuel standards program, which actually was passed in 2005, as part of the Energy Policy Act. So it's not a new act. But this required renewable fuels to be increasingly added into our nation's fuel supply. So the intent behind it is very good.

Ted Simons: How often increasing here? We have gone from 10 to 15. When are we going to 20?

Linda Gorman: That's the thing. The policy calls for increased usage of these types of renewable fuels. But it doesn't dictate necessarily when. And it also doesn't take into consideration the fact that demand for gasoline is relatively flat, nor does it take into consideration the fact that most of the refineries in the United States are set up to blend E10. So it's not a matter of just simply switching over and adding in five percent. It actually is very complicated.

Ted Simons: For E15, only approved for flex fuel vehicles or all vehicles?

Linda Gorman: No. Flex fuel vehicles use an entirely different fuel. That’s E85. That's 85 percent ethanol and 15 percent gasoline. Only five percent of the vehicles on the road right now are approved to use E15. So we are talking about a very small number of vehicles. And in addition to that in a recent survey that AAA did we found out that 95 percent of motorists didn't even know what E15 was and they had no idea if their vehicle could use it.

Ted Simons: How do you know your vehicle can use it? Is there a certain date before this, after that, you can't or shouldn't be using this?

Linda Gorman: Most vehicles can't use it. But the ones that, it would be in the owner's manual but the vast majority of vehicles, they should not use it or the use is questionable. So the problem with E15, it has increased alcohol component from the corn-based ethanol. But it can damage vehicle components over time if we are talking about small damage. We are talking about significant fuel, pump damage, fuel system damage, engine wear and tear that are costly repairs and also may not be covered by your manufacturer's warranty.

Ted Simons: I want to get to some of those concerns but the bottom line is that some of these warranties may be ADIOS if you wind up doing this. Correct?

Linda Gorman: Right and again, most people don't know this. They think they are doing a good thing by putting in E15 if it's available but what they may not know at least five manufacturers have flat outcome out and said they are not going to honor any, especially fuel-related vehicle claims if the vehicle is under warranty. If that vehicle used E15. An additional eight have said they haven't been as blatant in saying that but they said they may or may not honor these warranties. So this is a serious concern.

Ted Simons: I am seeing erroneous check engine lights, deterioration of the fuel system, the rubber parts of the fuel system, corroding pumps and fuel lines, accelerated engine wear. This is for vehicles that possibly would be OK for E15?

Linda Gorman: Possibly. So the problem with E15 is, we believe that ethanol is a perfectly fine blend for gasoline. There's nothing wrong with ethanol, per se. But more research is needed. More education is needed. When you put something in the marketplace that 95 percent of people don't know about and don't know if their vehicle consist use it and then you have manufacturers coming out and saying they may or may not cover these claims, it's very clear that the halt of E15 is necessary at this time.

Ted Simons: I have read something on this that suggests that this could be -- this could be kind of a move by the oil companies who aren't happy about having to shift over to refineries, who aren't happy about the idea of less dependence and demand on oil. Brazil sounds like the company is on 25 at least percent of ethanol. We have the flex fuels. Is there really that -- is there really that much concern, A, and, B, if there's that much concern and nothing should really use it why in the world was it approved?

Linda Gorman: Well the bottom line was the intent behind the renewable fuel standards program is a good intent. We are too reliant on foreign oil. We are too reliant on gasoline. The intent to introduce renewable fuels is a laudable one and one that should be continued to be pursued. What we need is a comprehensive energy strategy. Introducing E15 at a time when the country is not ready, when vehicles may not be able to handle it and when at the bottom line is motorists may be picking up the additional costs, costly repairs; it's just not the right time. More education, more research is needed.

Ted Simons: I think for those of us on the outside looking in, though, would say, OK, it's 10 percent now. This bumps it up to 15 percent blend. Really? That much difference from 10 to 15 percent to where AAA is saying don't do it?

Linda Gorman: There can be. It's not we are saying we are against renewable fuels because we definitely need a comprehensive energy strategy. But we need one that is well thought out, that's well researched, that's well understood by the public, by manufacturers alike and the other problem with E15 that we haven't mentioned is that these refineries that are making gasoline, the vast majority of them are making E10. And when you have only five percent of the fuel or five percent of the vehicles able to use E15 at this time, you could be creating a supply, tightening and supply of E10. So you could be causing prices to sky rocket, supplies to tighten at a time when it's just not warranted.

Ted Simons: I have seen where E15 has been sold, and been in use for about nine months or so.

Linda Gorman: Right.

Ted Simons: Are we seeing a lot of problems? Doesn't seem like there's been all that much reported, at least in the research I did.

Linda Gorman: It was approved for the use by last summer by the EPA. So what we are seeing is a handful of stations are starting to pop up and use it. So it's not widespread across the United States. But these manufacturers have come out and said they will not or may not honor the warranties which we don't think is fair to leave consumers holding the bag for costly repairs at least until we know more about it.

Ted Simons: You think further research is needed before AAA can jump on board?

Linda Gorman: Absolutely. We applaud the EPA for temporarily halting the sale which is what they have done the rest of the year; the sale of E15.

Ted Simons: So they have stopped it now? For the rest of the year? For the research?

Linda Gorman: Just, yes, to further look into it and see what other options are available. And also to see if the renewable -- the program is still something that needs to be considered. So we definitely need a comprehensive energy solution, as I mentioned. But when this act was passed back in 2005, the thought was that demand would continue to rise. That hasn't been the case for gasoline. We still need an approach but the one that was passed in 2005 may not be realistic.

Ted Simons: Interesting stuff. Good to have you here. Thanks for joining us.

Linda Gorman: Thanks for having me.

Salt and Verde Reservoirs

  |   Video
  • Reservoirs for the Salt and Verde Rivers, such as Roosevelt Lake, have been refilled to levels they were at last year, thanks to snowmelt. Salt River Project, which manages the system, reports the reservoirs also received a boost from a better-than-average monsoon season. Charlie Ester, SRP’s manager of Water Resource Operations, will discuss the status of water levels in the reservoirs that supply much of the water for the Phoenix area.
  • Charlie Ester - Manager of Water Resource Operations, SRP
Category: Environment   |   Keywords: SRP, environment, reservoirs,

View Transcript
Ted Simons: Good evening and welcome to "Arizona Horizon." I'm Ted Simons. A strong snow melt and a healthy monsoon have made for promising conditions at SRP reservoirs that supply much of the water for the Phoenix area. Joining us now is Charlie Ester, SRP's manager of water resource operations. Good to see you.

Charlie Ester: Good evening, Ted.

Ted Simons: The water levels now at these reservoirs, what are you seeing? What's going on out there?

Charlie Ester: Surprisingly, we are at 55 percent full. Which is exactly where we were a year ago. So even though last year was very dry, we got enough snow melt from the snow that we did receive to actually give us back what we used. In other words, we get to do it over again.

Ted Simons: Everybody used, water has been returned?

Charlie Ester: It has been.

Ted Simons: Is that unusual? Is that the forecast?

Charlie Ester: Well, we were looking, actually, no. Going into last fall, we thought we might actually have a wet winter because El Niño was beginning to pick up and all of a sudden it just went flat and turned into more of a neutral condition, maybe even very, very weak La Nina and that's not good for Arizona. We ended up having a dryer winter but it was just wet enough that it seemed like it was wet because the previous two years had been so dry.

Ted Simons: I was going to say. You are saying we got all the water back that we had used. It's all been put back in. Is that the norm? How has that been the last 10, 15, 20 years?

Charlie Ester: Oh, my god. For the last 20 years it's been more dry than wet. But we have been very fortunate through management of our ground water and the central Arizona supplies that we are more than half full. And after 20 years of drought, I'll take that.

Ted Simons: Indeed. Before we move on let's get kind of a basic lesson here. How many reservoirs? Where are they?

Charlie Ester: We actually have seven reservoirs. Four of them are on the Salt River. Roosevelt dam is by far our largest. And then we have two reservoirs on the verde, horseshoe and Bartlett and a new reservoir, it’s called C.C. Kragen. Most people will remember that as Blue Ridge reservoir on the East Clear Creek above Payson. That was acquired a few years ago through one of the Indian settlements.

Ted Simons: I know that, I don't want to get too far afield here but that particular reservoir water supply is a boon to Payson. Their water needs have been met I think for like 100 years, as least as far as forecasting is concerned, which is a big deal. Is there now a new lake there? Is there a place to go boating and stuff?

Charlie Ester: It's the same reservoir. It just has a new name. It's a beautiful location. It's just a wonderful site in the summer.

Ted Simons: It's a beautiful area. OK. Let's talk about this snow melt. It sounds like it was a little better than expected, especially since we had the La Nina.

Charlie Ester: Well, we thought it would be a lot better than normal. We actually, of course, I think every winter is going to be bad. That's just part of your nature. But it ended up being about 80 percent of normal. And for normal, we usually get about 600,000 acre feet of water. That's about 300,000 gallons per acre foot. So 80 percent of normal, that's pretty close to normal. Kind of a flip of a coin sort of thing.

Ted Simons: I was going to say considering how dry the winter wound up being in some respects that seems relatively encouraging. As far as the monsoon is considered, what are you seeing out there?

Charlie Ester: This is one crazy monsoon we are having. July was incredibly wet. There were some locations that had the wettest July ever; in fact, Douglas even had the wettest month ever. As soon as the calendar comes to August, it's like it shut down for a while. It's trying to rain again and in fact, it looks like next four, five days could be fairly productive. In July because it was so wet we did actually receive a fair amount of runoff. It was about 20 percent above normal.

Ted Simons: So when we are watching the weather maps and we are trying to figure out whether a storm is coming to our house, you folks are watching the map trying to figure out, what, if water is falling on reservoirs or in areas that run off into the rivers?

Charlie Ester: Yes. As much as we would all love to get rain at our own homes every night it's better for us if we get rain on the watershed and over the reservoirs is the best you can get because it falls right into your bucket.

Ted Simons: Are there areas of the watershed that are more important than other areas? That we could watch out for at home? Ourselves?

Charlie Ester: The forested high country is by far the greatest water producer. Of that area that stretches from Williams and Flagstaff all the way to the White Mountains, the White Mountains are by far more productive.

Ted Simons: Something happening there, good for us?

Charlie Ester: Yes.

Ted Simons: Let's talk about those who say that water is increasingly scarce in Arizona, and in the Southwest, especially now with this prolonged drought. Valid?

Charlie Ester: I would have a hard time arguing against that.

Ted Simons: Because?
Charlie Ester: Well, we are in a very long, extended drought which is not going to last forever. But with, when you throw in the Specter of climate change and perhaps a warming climate, which is likely to make us dryer or at least cause the effect of the temperatures to cause it to be dryer, there will probably be less water than we have been used to.

Ted Simons: What is SRP doing to address those concerns?

Charlie Ester: This is where I think SRP and all of Arizona entities will shine because this is a very arid state. Our water infrastructure has been developed to handle extreme conditions, extremely dry conditions. So I would say if anywhere in the country, Arizona and SRP in particular are probably very well situated to handle climate change variability.

Ted Simons: And we talk variability, we are talking, I would imagine a pretty wide field there. Correct?

Charlie Ester: Well, if you think about our natural climate is so incredibly variable as it is, if you then throw on, you know, 5, 10, 15 percent more variability from climate change; you probably won't even be able to discern it except through analysis of statistical records. So with our use of the reservoir water, ground water that resources that are here in the valley, and the fact that we have recharged over million acre feet of surface water for use during drought conditions, as well as this CAP supply that is we have, we are very well situated for climate change.

Ted Simons: Basically, there's concern out there, but no reason for panic and you don't see a crisis?

Charlie Ester: I would certainly not panic. And in terms of a -- I guess what's your definition of crisis? I do not believe we are facing a crisis at this time.

Ted Simons: Alright. It's good to have you here.

Charlie Ester: Thank you, Ted.