Arizona Health Insurance Legislative Update

The Arizona Legislature convened its regular session in January. With the state facing a deficit of more than $4 billion in fiscal years 2010 and 2011, the budget overshadowed all other issues again this year. Lawmakers faced difficult decisions, including the elimination of critical state programs, in their effort to balance the budget. State agencies have been cut drastically.
Among the most severe budget cuts were the elimination of KidsCare and the reduction of over 300,000 AHCCCS enrollees. Although lawmakers initially approved these budget reductions, they are likely to restore these cuts as a result of the new federal health care reform law. Because the law prohibits states from changing eligibility for CHIP and Medicaid, Arizona risks losing billions of dollars in federal matching funds if KidsCare and AHCCCS enrollment reductions are not reinstated.

In an effort to increase revenues and lessen additional cuts to key programs, legislators referred a temporary one-cent sales tax to the ballot. If approved, the measure will generate approximately $1 billion that will fund education, health care and public safety. A special election on the temporary tax is scheduled for May 18.

On another topic, the Legislature passed a bill giving the Governor authority to sue the federal government over the recently passed health care reform law. Stating that the federal government is overstepping its constitutional authority by mandating that individuals have insurance, Arizona is joining a suit with 18 other states against the implementation of the law.

While the budget dominated the session, below is a description of some other bills of interest.

Health Insurance-related Bills

  • HB 2296 (law enforcement officer; spouse; insurance payment) – Allows the surviving spouse of a law enforcement officer killed in the line of duty to receive payments for health insurance premiums from the officer’s former employer for one year after the officer’s death. Status: Passed House, awaiting final vote in the Senate.
  • HB 2308 (insurance information; transfer of business) – Adds “transfer of business” to the definition of insurance transaction in the statutes governing insurance information and privacy protection. Status: Signed by Governor.
  • HB 2579 (insurance; continuing education; continuation) – Continues education requirements for insurance agents indefinitely. Status: Signed by Governor.

Health Care-related Bills

  • SB 1189 (admissibility of expert opinion testimony) – Changes the standard used in civil and criminal trials relating to admissibility of expert testimony from the Frye standard to the Daubert standard. Establishes criteria for expert testimony to be admissible in court. Legal experts expect this change will be particularly helpful in defending medical malpractice suits. Status: Passed Senate and House; awaiting Senate action on House amendments.

Other Legislation

  • SB 1070 (safe neighborhoods; immigration; law enforcement) – Makes changes to laws relating to the enforcement of immigration laws, failure to carry an alien registration document, day laborers and harboring or transporting illegal aliens. Amends the employer sanctions provisions of law in the following ways:
  • Provides employers with the affirmative defense for entrapment;
  • Requires employers to keep a record of the employment verification from E-verify for the duration of an employee’s employment, or three years, whichever is longer. Status: Awaiting action by the Governor.
  • HB 2250 (Arizona’s job recovery act) – Provides income and property tax reductions and incentives. Creates a new supplemental Arizona Job Training Program, the Arizona Opportunity Fund and the Arizona Quality Jobs Program. Restructures Enterprise Zones into a statewide Arizona Enterprise Development Program. Status: Passed the House; awaiting debate in the Senate.

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