State Exchange Profiles: Arizona


Final update made on December 4, 2012 (no further updates will be made)

Establishing the Exchange 

On November 28, 2012, Governor Jan Brewer (R) informed federal officials that Arizona would default to a federally-facilitated health insurance exchange.1

Prior to her decision to default, the Governor had established the Office of Health Insurance Exchange to “organize the health insurance marketplace for easier evaluation by individuals and small businesses to acquire affordable health insurance.”2 While legislation establishing a state-run health insurance exchange failed in 2011, the Governor’s Office and legal counsel had researched non-legislative options for establishing an exchange.3,4

The Arizona Health Insurance Exchange Steering Committee was established to coordinate exchange planning activities across state agencies and met regularly. Members included Directors and senior staff from the Office of Health Insurance Exchange, the Department of Insurance, the Arizona Health Care Cost Containment System, the Department of Economic Security, the Department of Health Services, and the Director of Health Care Innovation Infrastructure Management. Stakeholder feedback was gathered through five work groups including, a health plans work group led by the Department of Insurance and focused on plan management requirements; a health brokers and agents group, concentrating on broker licensing and compensation; a tribal work group, which was developing outreach and education plans; an information technology infrastructure work group led by the Arizona Health Care Cost Containment System; and a legislative work group.5

On April 24, 2010, Arizona enacted a law prohibiting plans in a state exchange from offering abortion coverage except in cases of life endangerment or severe health impairment of the pregnant woman.6

Contracting with Plans: Prior to defaulting to a federal exchange, the Department of Insurance took the lead in researching and developing the plan management functions for the exchange, including certification of qualified health plans, quality rating systems, risk adjustment and transitional reinsurance. Their work was informed by the health plans work group meetings. Arizona expressed support for adopting a market facilitator approach, whereby the exchange would contract with all qualified health plans meeting certain criteria.7,8 In February 2012, the state released a Request for Proposals soliciting subcontractor assistance with exchange management functions including, plan management, plan selection, data management and reporting, consumer support services, and financial management.9

Information Technology (IT): Arizona had planned to design and build the individual and small business exchange components, upgrade its Medicaid eligibility systems, and integrate everything into one seamless system. Arizona submitted an Advanced Planning Document which was accepted by CMS, indicating the state intends to make major Medicaid eligibility systems upgrades. In 2011, the state released a Request for Information to identify viable available or proposed solutions for aligning its Medicaid and Children’s Health Insurance Program (CHIP) enrollment and eligibility systems with an exchange as well as estimated pricing.10 Arizona also participated in the “Enroll UX 2014” project, which is a public-private partnership creating design standards for exchanges that all states can use.11

Essential Health Benefits (EHB): The Affordable Care Act requires that all non-grandfathered individual and small-group plans sold in a state, including those offered through the Exchange, cover certain defined health benefits. The Department of Insurance examined the state’s EHB options and solicited subcontractors to complete an analysis on options for the final benchmark plan.12 The state selected the State Employee Benefit- United Healthcare EPO with pediatric and vision coverage supplemented by the FEDVIP plans as the benchmark package.13

Exchange Funding

In September 2010, the Arizona Governor’s Office of Economic Recovery received a federal Exchange Planning grant of $1 million. In November 2011, the Governor’s Office was awarded a $29.8 million Level One Establishment grant to further secure IT infrastructure and assist in finalizing plan management functions for the exchange.14

Next Steps

The federal government will assume full responsibility for running a health insurance exchange in Arizona beginning in 2014.

For more information on Arizona’s health insurance exchange planning, visit:

1. Governor Jan Brewer letter to CCIIO. November 28, 2012.
2. Office of Health Insurance Exchange: (Accessed February 16, 2012)
3. House Bill 2783. Arizona Health Insurance Exchange. Introduced February 8, 2012.
4. Arizona Exchange Planning Grant Final Report. January 5, 2012.
5. Arizona Exchange Planning Grant 4th Quarterly Report. October 15, 2011.
6. Senate Bill 1305. April 24, 2010.
7. Health Insurance Exchange and ACA Update. August 23, 2012. Arizona Health Care Cost Containment System.
8. Arizona’s Options related to risk adjustment, transitional reinsurance and risk corridors (ACA requirements). Arizona Department of Insurance. April 12, 2012. Mercer.
9. State of Arizona Health Insurance Exchange. Notice of Request for Proposal. February 2, 2012.
10. Request For Information Health Insurance Exchange Commercial Component/Interface. Issued 8/15/2011.
11. Enroll America, UX 2014.
12. Essential Health Benefits. Arizona Department of Insurance. June 1, 2012. Mercer.
13. State of Arizona. Letter to CCIIO from Jan Brewer. September 28, 2012.
14. Level One Establishment grant application. State of Arizona Governor’s Office. September 30, 2011.

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