HR Management & Compliance

Arizona Voters Pass Health Care Choice Measure

by David I. Weissman, Ford & Harrison LLP

Arizona voters resoundingly said “no thank you” to federal health care reform legislation on Election Day, voting in favor of Arizona Proposition 106 by a fairly significant margin. Proposition 106 amends the Arizona Constitution by:

  • prohibiting any law or rule from compelling any individual, employer, or health care provider to participate in any health care system;
  • allowing individuals and employers to pay directly for lawful health care services without penalty or fine;
  • allowing a health care provider to accept direct payment for lawful health care services without penalty or fine; and
  • providing for purchase and sale of health insurance in private health care systems without prohibition by rule or law, subject to reasonable and necessary rules that do not substantially limit a person’s options.

Notably, Proposition 106 will not affect which services health care providers are required to provide, will not affect which health care services are permitted by law, or prohibit care provided by law as it relates to workers’ compensation.

A similar ballot proposition was narrowly defeated by Arizona voters in 2008 because of concerns that it would affect patients’ ability to receive health care services through the Arizona Health Care Cost Containment System (AHCCCS), the state’s version of Medicaid. The language of the current version makes clear that there will be no impact on AHCCCS services.

The Arizona Legislature referred Proposition 106 to the ballot in the summer of 2009 when federal health care reform was a hot topic in Washington, D.C., but prior to the passage of the federal Patient Protection and Affordable Care Act (PPACA). The Arizona ballot measure was largely a response to concerns over the potential implementation of a government-run health care plan (i.e., a “public option”) and employer and individual mandates to provide or purchase health care insurance or face penalties and fines. Proponents have also expressed concern over bureaucratic control over personal health care decisions and the escalating costs of the federal health care plan.

While the passage of Proposition 106 may send a strong message to Washington about the majority (56 percent) of Arizona voters’ feelings on the federal health care reform legislation, the victory may be more symbolic than anything else (and some would argue that it will be expensive and counterproductive).

Opponents of Proposition 106 point out that the final version of the PPACA does not include a public option, so that concern is a moot point. Further, the right to pay directly for health care services as provided for by Proposition 106 is not prohibited by the PPACA or any other existing law.

Moreover, many believe that federal health care reform is beneficial to our state, allowing for more Arizonans to be covered by health insurance, particularly children. (Arizona currently has the fourth highest percentage of uninsured children in the country.) And without mandated coverage, some believe that our health care costs will continue to go up because of uncovered individuals seeking emergency care.

Finally, opponents maintain that Proposition 106 is premature because the PPACA’s employer and individual mandates don’t take effect until 2014. In addition, the insurance mandates in the federal law will likely preempt any contrary state laws such as Proposition 106. The litigation that is almost sure to result from the passage of Proposition 106 will be lengthy, expensive, and in the end, probably unsuccessful. Given that Arizona is already involved in several lawsuits with the federal government (including litigation over federal health care reform), there are questions about whether this is something our state can afford right now.

If nothing else, Arizona’s legislature and citizens made a strong statement to the federal government against current federal health care reform legislation by passing Proposition 106. Still, the short-term impact of this amendment to the Arizona Constitution will likely be minimal given that there is no federal public option on the table, employer and individual insurance mandates won’t kick in until 2014, and nothing in the current law prevents direct payment for health care services. And at the end of the day, federal law is likely to trump this new state law, though it may take expensive and protracted litigation to get to that result.

David I. Weissman is an editor of Arizona Employment Law Letter and a partner with Ford & Harrison LLP in Phoenix. He can be reached at (602) 627-3531.

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