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Bill would state move toward implementing Affordable Care Act provisions

With Arizona declining to establish a health insurance exchange under the federal Affordable Care Act, a lawmaker wants to make sure the state maintains its oversight of insurers and policies.

“What we’re trying to do is to codify authority for Arizona to be able to make the best of a worse situation,” said Rep. Heather Carter, R-Cave Creek, author of HB 2550.

The proposed legislation addresses areas of flexibility offered to states under the Affordable Care Act. Those include regulating the health insurance industry and setting areas within which insurers will establish rates for individual and small-group policies.

“This is an attempt to continue as best we can what we have,” said Pete Wertheim, the Arizona Hospital and Healthcare Association‘s vice president of strategic communications.

Carter’s is one of three bills proposing Arizona responses to the federal plan. Legislation by Rep. Carl Seel, R-Phoenix, to prohibit a state health exchange and a bill by Rep. Eric Meyer, D-Scottsdale, to create a state exchange didn’t receive committee hearings.

The main effect of those two bills would be sending a statement without much legal effect, said James G. Hodge Jr., Lincoln Professor of Health Law and Ethics at Arizona State University’s Sandra Day O’Connor College of Law.

In contrast, Carter’s proposal is more an act of compliance, he said.

“The statement if anything is, ‘We’re attempting to comply with the Affordable Care Act,’” Hodge said.

Gov. Jan Brewer declared in November that Arizona would reject a role in health insurance exchanges, a key aspect of the federal health reform law often called Obamacare. The state will instead default to a federally managed exchange in 2014.

The law provides states with opportunities to implement some initiatives without their own exchanges, Hodge said.

“States are making selective choices based on what they feel provides them the best level of control,” he said.

Diane Brown, executive director of the Arizona Public Interest Research Group, said Carter’s bill is the state’s opportunity to determine how it wants to navigate the federal act.

Arizona is moving toward providing reviews of individuals’ health insurance rates and Brewer is seeking an expansion of Medicaid, so the bill is the next step, she said.

“Arizona seems to be picking and choosing which parts of the federal health reform law can best be managed by state officials,” she said.

Brown said the only section of the legislation that gives her pause is a provision allowing for its removal if the Affordable Care Act is repealed or found unconstitutional.

“The concern with moving a law forward and then slamming on the brakes is that there are consumers who will be instantly impacted by how rates had been determined and how those rates may change within a 24-hour period,” Brown said.

David Childers, a lobbyist with national trade association America’s Health Insurance Plans, said that if the state doesn’t designate regions known as rating areas, the federal government will consider all of Arizona one rating area.

Childers and Wertheim said that would be unrealistic given the state’s diversity. Maricopa County, with 3.8 million residents, and Greenlee County, with around 8,500, would be assigned the same premiums for individual and small-group policies, forcing some residents to pay disproportionately higher amounts.

“If you put (insurance companies) in a one-size-fits-all program they may not be able to meet needs as well as they have in the past,” Wertheim said.

Steve Barclay, a lobbyist with Blue Cross Blue Shield of Arizona, called Carter’s legislation a simple solution with “no monkey business.”

“We are trying to do minimal things that we have to do to protect Arizona consumers and businesses,” Barclay said. “That’s what the bottom line is here.”

HB 2550 provisions:

• Require the director of the Arizona Department of Insurance to ensure that the state retains its authority to regulate health insurers.

• Prohibit a health insurer subject to the Affordable Care Act from transacting insurance if the coverage is inconsistent with that required under the act.

• Establish seven rating areas within the state to be used by all health insurers when issuing individual and small-group insurance.

• Include a grandfather clause for certain individual and small group policies.

• Terminate those provisions if the Affordable Care Act is repealed by Congress or declared unconstitutional by the U.S. Supreme Court.

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