Arizona Governor Jan Brewer stunned conservatives with a pair of vetoes yesterday, one on a bill that would have required presidential candidates to submit specific documentation to qualify for a race, and the other on a measure that would have allowed people to carry firearms on public-college campuses.  Brewer has another controversial measure on her desk now that goes to the heart of the health-care debate in the nation, and no one’s quite sure whether Brewer intends to sign it.  Katie Pavlich reports on the question for Townhall:

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.

States don’t usually allow for interstate sales of health insurance because the sector is almost always highly regulated.  A state cannot impose mandates on businesses operating across state lines, which means that any insurer selling in Arizona only has to abide by the mandates of their own particular state.  Once Arizona opens its borders to health insurers, those in the states with the smallest mandate burden will compete best against those in Arizona and around the country.

That may be great for consumers, but it’s bad for state governments.  The competition would tend to drive in-state insurers out of business, and put Arizona’s mandates out of business with them.  It would give a more free-market approach to health insurance, which will anger the special interests that drove the mandates in the first place.  Katie notes that coverage for autism is one of the points of argument being made to press Brewer to veto this bill, although according to the Kaiser Foundation’s list of mandates in Arizona, insurers there were not required to offer coverage for those issues in 2010.

Brewer has a decision to make with this bill.  Will she support free-market solutions that benefit the majority of Arizonans, or will she act to protect the state’s prerogative in enforcing mandates on insurers?

Tags: Arizona