State lawmakers voted Wednesday to let companies from elsewhere sell insurance in this state, a move that could cut premiums but leave many Arizonans without coverage for some of their medical conditions.
SB 1593 eliminates existing laws which require that insurers that want to peddle their products to Arizona residents be licensed and regulated by the state Department of Insurance. Proponents say the increased competition will provide more opportunities for Arizonans to get the coverage they want at a price they can afford.
But the flip side is that the legislation wipes out more than two dozen mandates for what conditions must be covered for policies issued in Arizona. These range from chiropractic care and breast reconstruction to even how much time a woman would be allowed to remain in the hospital following delivery.
Rep. Kate Brophy McGee, R-Phoenix, said that is good news for those who don’t want or need that kind of coverage and the costs entailed. Conversely, those who want coverage for specific conditions can shop for a policy which includes that.
But Rep. Peggy Judd, R-Willcox, said that provides little comfort to those whose coverage is provided by their employers and who may have a child with autism, one of the conditions that is now within the mandate.
“I can guarantee you pretty close that an employer is going to pick a policy that is at his best advantage and the lowest cost,’’ she said. “And the lowest cost is not going to be something that would cover autism.’’
Sen. Nancy Barto, R-Phoenix, who crafted the legislation, conceded that is a possibility. But Barto said she is not concerned.
“I think the market will handle that,’’ she said. “If employers start making those decisions I think they’re going to run into some problems.’’
Barto said individuals who go to work for companies essentially enter into a contract trading work for specific compensation. She said businesses that don’t offer insurance with adequate coverage will find it harder to find qualified workers.
Rep. Nancy McLain, R-Bullhead City, who helped usher the measure through the House, said she sees the issue in even simpler terms.
She figures that once insurance costs are driven down, then there will no longer be a need for employers to provide coverage for their workers. That will leave each individual responsible for finding his or her own care.
But both agree on one key point: If this measure becomes law, the mandates that took proponents dozens of years to get lawmakers to enact would disappear.
For example, a 1998 law requires insurers which provide coverage for diabetes to also pay for “medically necessary’’ supplies, such as syringes.
Lawmakers also agreed to include provision in Arizona law to require insurers to cover at least 12 visits to a chiropractor each year.
There also are mandates that insurers provide instant coverage for newborns for policyholders as well as pay for a woman to stay in a hospital for at least 48 hours following a normal delivery and 96 hours after a Caesarean section delivery.
And in 2008, after years of lobbying by parents of autistic children, legislators added coverage for children with that condition to the mandates, with some caps on the amount of benefits each year.
Eliminating of that last mandate provoked some of the most heated debate.
Rep. Jack Harper, R-Surprise, said that requirement alone has added $50 a year to the cost of health insurance for every man, woman and child in the state. “That was the most expensive mandate the state has ever passed.’’ he said.
That figure was disputed by Rep. Terri Proud, R-Tucson. She pegged the figure at no more than $12 a year.
And Rep. Eric Meyer, D-Paradise Valley, said the cost in higher premiums looks at only half the equation.
“How much would it cost to not treat those kids?’’ he asked. “If we have kids that we can treat and become productive citizens, how much would that cost?’’
Rep. Doris Goodale, R-Kingman, said she supports the underlying concept of allowing insurance to be purchased across state lines.
But Goodale said she cannot agree with getting rid of all mandated coverages, both for the new companies entering the market and those already here. The issue, she said, is personal, telling colleagues about her grandson who she described as “mid-range autistic.’’
She said other families have similar stories.
“Many of our citizens had no choice,’’ Goodale said. “They did not choose to be autistic, they did not choose to be Down syndrome, they did not choose to have cancer.’’
Goodale said she understands that the mandates, when all put together, do add to the cost of coverage. But she said it would be preferable to review each one, including whether the treatments are cost effective, rather than simply wipe them all out with a single piece of legislation.
But Brophy McGee said more rapid action is needed to make insurance more affordable and available.
“It is not fair to deprive individuals who do not need such coverage of any coverage at all,’’ she said. “I think it’s important that we open up the marketplace.’’