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Legislators OK insurance from outside Arizona

Legislators OK insurance from outside Arizona

PHOENIX - State lawmakers voted Wednesday to let companies from elsewhere sell insurance here, a move that could cut premiums but leave many Arizonans without coverage for some medical conditions.

SB 1593 eliminates laws requiring insurers that sell 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 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, while 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, a condition 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 said she is not concerned because, "I think the market will handle that. If employers start making those decisions, I think they're going to run into some problems."

Businesses that don't offer insurance with adequate coverage will find it harder to find qualified workers.

"This is a very unusual move by a state. It's an odd thing to do," said health policy expert Dr. Joe Gerald, director of the undergraduate program in public health at the University of Arizona's Zuckerman College of Public Health.

While other states allow out-of-state companies to sell insurance, Gerald said they typically are subject to regulations in the state where they are selling.

But even if the bill is signed into law, Gerald predicted it would not affect a huge number of Arizonans. It won't affect state residents who are on Medicaid and Medicare, and many large employers are self-insured so they are already exempt from state mandates, he said. "It's going to affect a small slice of Arizonans - those who work for smaller companies and those who buy insurance as individuals," he said.

And just because out-of-state health insurers may not be subject to Arizona mandates, they won't all necessarily have cheaper policies, he noted.

Star reporter Stephanie Innes contributed to this story.

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