Arizona Bill Would Allow Insurers From Out Of State To Circumvent Consumer Protections

Last week, Arizona passed a bill that will serve as a test case for one of the GOP’s most popular solutions to the health care crisis: allowing individuals to purchase coverage across state lines:

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.

The Affordable Care Act already includes a similar provision that would allow states to form across state compacts, establish a set of rules and mandates and allow individuals to purchase coverage that follow those guidelines.

Arizona is doing something entirely different. It wants to allow insurers to completely circumvent state-based patient protections and coverage requirements and offer bare-bones coverage to the healthiest applicants. Insurers would be able to cherry pick the most profitable patients (who don’t need coverage for things like breast reconstruction), further dividing the insurance risk pool and likely increasing costs for the sickest beneficiaries.