SB 1593-Interstate Insurance hits National News

May 8, 2011 by  

Governor Brewer has since vetoed the bill.

From Investors Business Daily

Arizona May Promote Health Care Choice For Consumers


Arizona Gov. Jan Brewer, speaking to the media Tuesday in Phoenix, is at the forefront of a shake-up in the state's health insurance market. Her...Arizona Gov. Jan Brewer, speaking to the media Tuesday in Phoenix, is at the forefront of a shake-up in the state’s health insurance market. Her… View Enlarged Image

Arizona is poised to shake up the health insurance market with a bill offering more competition and consumer choice and an indirect challenge to ObamaCare — if Gov. Jan Brewer signs it.

The legislature has approved a measure to let out-of-state health insurers sell policies in Arizona’s small group and individual markets. They wouldn’t have to abide by Arizona’s benefit mandates, but would have to follow their own states’ mandates. In-state insurers would also have the option of selling policies similar to those sold by out-of-state rivals.

Buyers would have far-greater scope to buy the policies that fit their medical needs and wallets.

“This is about expanding markets,” said Republican state Sen. Nancy Barto, who introduced the bill. “A lot of Americans are waiting for good, free-market reforms, and this is one that is going to make a big difference.”

Insurance is largely state regulated. Each state, lobbied by medical and patient groups, mandates various benefits that all must pay.

The number of state mandates rises each year. In 2004 there were 1,823, according to the Council for Affordable Health Insurance. Now it’s 2,156. Unusual mandates include birthmark removal, athletic trainers and massage therapists. Rhode Island has the most with 69, Idaho the least with 13. Arizona has 33.

“It would overturn mandates in Arizona, and one of the most important for us is the health insurance mandate that provides autism coverage for children,” said Dr. Doreen Granpeesheh, executive director of the Center for Autism and Related Disorders.

Twenty-four other states also have autism mandates.

“This bill does not repeal any mandate,” replied Dr. Eric Novack, a conservative health care activist. “The goal is to give people a choice.”

Market-Based Reform

Arizona would be the second state to adopt this type of law. Wyoming passed a more limited version last year. States taking up similar bills this year are Georgia, Oklahoma and Montana.

Conservatives have long backed cross-border insurance as a market-based way to lower medical costs. Sen. Barto views her bill as part of the ObamaCare backlash.

“People were surprised at how quickly the federal government moved and jammed (Obama-Care) through,” she said.

Letting residents buy policies from out-of-state insurers is one way states are resisting ObamaCare. Twenty-six states have joined lawsuits against the law’s individual mandate for everyone to buy insurance.

Under ObamaCare, people without work-based coverage who want taxpayer subsidies would have to buy insurance on a state-based exchange. States must set them up by 2014 or the federal government will do it for them. Many conservatives have urged states not to comply, arguing that the federal government would be overwhelmed. Eleven states have rejected exchanges so far.

Gov. Brewer hasn’t said if she’ll sign the bill. She has vetoed some prominent bills lately, including ones that would require presidential candidates running in Arizona to provide their birth certificates, let students carry guns on campus and pave the way for a health care compact with other states to sidestep ObamaCare.

But Barto is optimistic: “We’ve had many conversations with her office in the writing of the bill language, and we’ve taken a lot of their suggestions.”

Opponents fear that the bill could result in adverse selection whereby the young and healthy trend toward lower-mandate, cheaper policies, thus making higher-mandate policies more expensive as they are left with sicker and older patients.

“We hear about this ‘race to the bottom,'” Novack said. “But the evidence seems to show that people will seek out and purchase the most comprehensive policy they can afford.”


Arizona Healthcare Freedom

The Arizona legislature passed a bill last week that, if signed by Governor Jan Brewer, will allow Arizonans to purchase health insurance plans across state lines, opening up competition and lowering premium costs for everyone. The bill will affect 20 percent of Arizona residents and does not affect those on Medicaid and Medicare.

Senate Bill 1593, or the Arizona Interstate Health Insurance Act, will allow consumers to pick and choose from health insurance plans in Arizona and other states. It is the first legislation of its kind in the country. Individuals will be able to choose a plan with health care mandates that fit them best, reducing individual premium costs. In addition, opening up the health insurance market across state lines will allow for those who cannot afford health insurance in Arizona to find an affordable plan in another state that gives them the coverage they need.

Opposition to the bill has said the legislation will “eliminate laws requiring insurers that sell their products to Arizona residents be licensed and regulated by the state Department of Insurance,” implying the bill is a deregulation of the health insurance industry all together, which is false. All insurance plans, whether in Arizona or other states, are regulated through the state of origin and SB 1593 protects consumers by giving Arizona the ability to block insurance companies with a history of bad behavior from selling policies to Arizona citizens. According to the Smith Amendment for SB 1593, all litigation claims requiring a court process will take place under the jurisdiction of Arizona. All policies will also be subject to Arizona premium taxes, keeping tax revenue local in order to stimulate the economy. Senate Bill 1593 will also give business owners more options on how to best insure employees and allows businesses expanding to Arizona to keep current health plans from the state they are expanding from.

Not surprisingly, those against the bill say children with autism will be left without coverage simply because autism coverage will no longer be mandated for everyone purchasing a plan. This is because of the different options offered across state lines. Autism coverage will no longer be mandated to those who do not need it, but does not mean those with autism or parents of autistic children will be unable to find affordable health coverage. In fact, opening up the market for health insurance gives families with autistic children and adults with autism a greater chance of receiving affordable coverage. The same goes for prenatal, diabetic and chiropractic care. Specific types of medical care won’t necessarily be mandated to consumers who don’t want or need the those types of health care.

The Arizona Republic editorial board is urging Governor Jan Brewer to veto the bill, calling it short sighted, saying it is a “poorly conceived bill that could let health-care insurers drop coverage for autism treatment, postnatal care and some cancer drugs,” adding, “Brewer should turn down Senate Bill 1593, which would take Arizona into uncharted territory in health insurance. The bill would allow out-of-state companies to write health-insurance policies in Arizona.

The goal is worthy: increased competition and choice. But there are too many uncertainties about how this would play out in the real world, including jurisdiction over disputes. This is a proposal to explore at the regional or national level, not as a one-state experiment.”

But insurers aren’t dropping any of the coverage mentioned, the bill simply allows consumers to purchase a plan with coverage they will use and need. Those who don’t need postnatal or autism coverage shouldn’t be mandated to purchase it anyway, and allowing the purchase of plans across state lines gives individuals better options to meet their health care coverage needs. SB 1593 allows for more efficient, affordable and specialized plans instead of a one size fits all option, which has been proven to be inefficient and expensive.

Senate Bill 1593 is sitting on Governor Jan Brewer’s desk awaiting signature.

Barto Editorial from Arizona Republic:

Measure keeps Arizonans in health-care driver’s seat

4 commentsby Nancy Barto – Apr. 20, 2011 12:00 AM
Special for the Republic

Giving Arizona families and businesses more choices for health insurance must be a primary goal of real health-care reform. Senate Bill 1593 will give Arizonans more options while protecting the rights of consumers and keeping insurers subject to strong oversight from Arizona regulators.

Efforts to mislead the public and urge the governor to veto this bill are misguided. SB 1593 should have the support of Arizonans, and I urge Gov. Jan Brewer to sign the bill into law.

Critics falsely claim that the bill will get rid of Arizona health-insurance mandates. Arizona currently has 33 mandates, and SB 1593 does not repeal a single one. What the bill will do is give Arizona citizens the ability to choose which of the 50 state-benefit mandate packages they want – whether it be the Arizona package, the Idaho package (with 13 mandates, the fewest), the Rhode Island package (with 69 mandates, the most), or any state in between.

By being able to choose which set of benefits best fits their needs, Arizonans will be far more likely to get an insurance policy that will be there when they need it.

While giving Arizonans more health-insurance choices and not repealing benefit mandates, the policies sold to Arizonans from other states will be subject to a wide array of Arizona-based consumer protections. Arizonans will be protected by the Arizona False Claims Act, the prompt-pay statute, the Arizona claims-denial appeals process and guaranteed access to Arizona courts, just to name a few.

Additionally, the policies will have the regulatory protections that each state provides for its health-insurance policies on top of the Arizona protections.

Few people realize that well over a million Arizonans currently have private-insurance policies that are exempt from state-mandated coverage – large companies that “self-insure” do not have to follow state mandates. In fact, more privately insured Arizonans are covered by self-insured plans that are exempt from the mandates than by policies that currently require them.

The reason few people are aware of this fact is because these bigger companies continue to seek out and create policies that meet the needs of employees and their families. Smaller companies are even more sensitive to these issues. The current environment has an increasing number of companies dropping coverage altogether – often leaving employees and their families without coverage.

Many younger adults may only need a policy with fewer mandated benefits – and the potential for a cost savings of even $30 to $40 per month can easily be the difference between obtaining coverage or remaining uninsured.

Arizonans are aware that our Medicaid system, AHCCCS, is past the breaking point – and those who by necessity land on the AHCCCS rolls (because a private policy is not readily available or affordable) quickly discover that many of the benefits available with private insurance do not exist in AHCCCS. Additionally, if “Obamacare” is not repealed, the health-insurance exchanges will contain hundreds of thousands of Arizonans by the end of the decade. These exchanges are being designed in every state to be completely exempt from all state benefit mandates.

SB 1593 begins the process of what needs to be a wide range of reforms to keep patients and families in the driver seat for health-care decisions, as opposed to a small group of insurers, which enjoy a cozy relationship with regulators. Opening up markets, demanding transparency and expanding choices for Arizona families are where we must start.

Our entire nation is watching to see if a state will actually pass real free-market reforms.

Much like our Health Care Freedom Act has become the model for the nation, SB 1593 will become the model for how real health-care reforms can be passed and enacted.

Please join me in supporting SB 1593 and urging Gov. Brewer to sign this important bill into law.

Nancy Barto is a Republican state senator who chairs the Committee on Healthcare and Medical Liability Reform.


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