AZ Legislative Update – Friday, January 23, 2026
Posted by [email protected] on Jan. 26, 2026 / Subscribe 0
Friday marked the 12th day of the Arizona 57th Legislature, Second Regular Session. While legislative activity at the Capitol has been relatively light thus far, we expect a significant increase in momentum over the coming weeks.
Earlier this week, the Governor’s Office of Strategic Planning and Budgeting presented the Governor’s $18.6 billion FY 2027 budget proposal to the House and Senate Appropriations Committees. Based on the tense and partisan exchanges during those hearings, we anticipate a contentious budget process as the session progresses.
As part of her budget proposal, Governor Hobbs outlined a significant structural change to the funding model for the Arizona Department of Insurance and Financial Institutions (DIFI). Rather than continuing to rely on annual General Fund appropriations, the Governor proposes that DIFI be fully funded through fees assessed on insurers and other regulated financial entities. Under this approach, existing assessments and statutory fee authorities, such as licensing and regulatory fees that are currently deposited into the General Fund, would be set at levels sufficient to fully cover the department’s operational and oversight costs, effectively eliminating the need for General Fund support.
Budget-related language directs DIFI to “assess and set the fees at a level to ensure that the monies deposited will equal or exceed the department’s expenditure from the state general fund,” thereby shifting responsibility for funding the department to the regulated industry. However, the Governor’s public budget materials do not specify new fee amounts or assessment rates for individual insurers beyond existing statutory assessments (including the longstanding fraud assessment of approximately $1,050 per licensed insurer). Instead, the proposal establishes a framework under which DIFI would adjust fee levels as necessary to meet its funding requirements.
Most legislative standing committees are now fully underway and are already posting packed agendas for next week.
To date, legislators have introduced 1,325 bills, along with 85 memorials and resolutions. This pace exceeds last year’s totals at this point in the session, when 968 bills and 65 resolutions had been filed. The deadline for bill introductions is February 2 in the Senate and February 6 in the House.
Attached is your latest bill tracking report. Below, we have highlighted several measures of particular interest. As always, please do not hesitate to reach out with any questions or concerns.
Health Insurance
HB 2196 Pharmacists; Pharmacies; Reimbursement Costs; Appeals (Bliss): HB 2196 was double assigned this week to the House Health & Human Services Committee and the House Appropriations Committee. The bill addresses reimbursement costs for pharmacists and pharmacies in Arizona. The bill establishes a framework for appealing reimbursement decisions made by health insurers, ensuring that pharmacists have a clear process to contest denials or reductions in payment. It mandates that insurers provide detailed explanations for any reimbursement decisions that are challenged. Additionally, the legislation requires that pharmacies be compensated fairly for the services they provide, promoting transparency in the reimbursement process. The bill currently does not have a committee hearing scheduled.
HB 2333 Insurance; Prosthetics; Orthotics; Reporting Requirements (Heap): HB 2333 was double assigned this week to the House Health & Human Services Committee and the House Appropriations Committee; however, the it is not up this week. The bill introduces new reporting requirements for prosthetics and orthotics, which could significantly impact operational processes. The bill mandates insurers to collect and report data on the utilization and outcomes of these services, aiming to enhance transparency and improve patient care; however, HB 2333 imposes administrative burdens and costs associated with data collection and compliance.
HB 2336 Health Insurers; Vaccine Mandate; Prohibition (Heap): HB 2336 was assigned to the House Health & Human Services Committee earlier this week. The bill prohibits vaccine mandates, poses significant implications for managing health coverage and public health initiatives. This bill may lead to increased healthcare costs as insurers could face higher claims from unvaccinated individuals who contract vaccine-preventable diseases. Additionally, the bill complicates efforts to promote vaccination as a preventive measure, potentially impacting overall community health outcomes.
HB 2407 Insurance; Claims Processing; Downcoded Claims (Willoughby): HB 2407 was assigned to the House Health & Human Services Committee earlier this week. The bill focuses on claims processing and downcoded claims. HB 2407 introduces significant challenges in managing reimbursement processes. The legislation aims to streamline claims handling but may also lead to increased scrutiny over downcoding practices, potentially resulting in higher administrative costs for insurers. Insurers will need to adapt their claims processing systems to comply with the new regulations. Ultimately, this bill could impact the financial dynamics between insurers and providers, necessitating careful monitoring and adjustment. HB 2407 is not scheduled for committee this week.
HB 2433 Medicare Supplement Insurance; ALS; ESRD (Bliss)/SB 1191 Medicare Supplement Insurance; ALS; ESRD (Shope): HB 2433 was assigned to the House Health & Human Services Committee earlier this week and SB 1191 was assigned to the Senate Finance Committee. Both bills mandate that Medicare supplement policies must provide coverage for individuals diagnosed with ESRD, ensuring they have access to necessary medical services. They outline specific benefits that must be included in these policies, such as coverage for dialysis and kidney transplants. Additionally, the legislation prohibits insurers from imposing waiting periods for coverage related to ESRD. HB 2433 is not scheduled to be heard this week.
HB 2447 Insurance; Reimbursement Rates; Nurse Anesthetist (Lopez): HB 2447 was assigned to the House Health & Human Services Committee earlier this week; however, it is not up in committee this week. The bill addresses reimbursement rates for nurse anesthetists in Arizona. The bill mandates that insurance companies provide fair reimbursement rates for services rendered by certified registered nurse anesthetists (CRNAs). It specifies that these rates should be comparable to those provided to anesthesiologists for similar services. Additionally, the legislation requires insurers to include CRNAs as participating providers in their networks, ensuring that patients have access to anesthesia services without unnecessary barriers.
HB 2250 Prior Authorizations; Habilitative Services (Bliss): HB 2250 addresses prior authorizations for habilitative services in Arizona. The bill requires health insurers to establish a process for prior authorization that is transparent and efficient for habilitative services. It mandates that insurers provide clear criteria for the approval of these services and ensures that decisions are made in a timely manner. Additionally, the bill stipulates that if a prior authorization request is denied, the insurer must provide a detailed explanation for the denial. The bill is assigned to the House Health & Human Services Committee; however, it is not scheduled for a hearing this week.
HB 2617 Insurance; Prostate Cancer; Cost Sharing (Blackman): HB was assigned to the House Health & Human Services Committee earlier this week. The bill addresses cost-sharing requirements for prostate cancer treatment in Arizona. The bill mandates that insurance plans cover prostate cancer screening and treatment without imposing excessive cost-sharing on patients. It specifies that any cost-sharing for these services must be reasonable and not create a financial barrier to accessing necessary care. Additionally, the legislation requires insurers to provide clear information about coverage and cost-sharing related to prostate cancer services.
HB 2693 Insurance; Bona Fide Associations; Qualifications (Livingston): HB 2693 will be heard in the House Commerce Committee on Tuesday. The bill establishes qualifications for bona fide associations in Arizona regarding insurance. The bill outlines the criteria that these associations must meet to provide insurance coverage to their members. It specifies the types of insurance that can be offered and the regulatory framework governing these associations. Additionally, the bill includes provisions for compliance with state insurance laws and regulations.
HB 2796 AHCCCS; Enrollment Verification; Presumption Eligibility (Carbone): HB 2796 will be heard in the House Health & Human Services Committee on Monday afternoon. The bill amends the Arizona Revised Statutes regarding the Arizona Health Care Cost Containment System (AHCCCS) with a focus on enrollment verification and presumptive eligibility. Key provisions include the establishment of data matching agreements with the Department of Revenue to identify members with lottery or gambling winnings of $3,000 or more, along with regular reviews of death records, unemployment benefits, and residency information to adjust eligibility. The bill restricts self-attestation for eligibility criteria without independent verification, unless required by federal law. It also seeks a Section 1115 waiver to eliminate mandatory hospital presumptive eligibility, limiting it to children and pregnant women. Additionally, hospitals must notify the administration of presumptive eligibility determinations within five working days and assist applicants in completing full applications.
SB 1114 Appropriation; Behavioral Health Patient Brokering (Werner): SB 1114 will be heard in the Senate Health & Human Services Committee on Wednesday morning. The bill appropriates $1,000,000 from the state general fund for the fiscal year 2026-2027. The funds are designated for the Maricopa County Attorney's Office to support investigations related to behavioral health patient brokering. The bill aims to address issues of patient brokering within the behavioral health industry in Arizona.
SB 1116 AHCCCS; Claims Review; Behavioral Health (Werner): SB 1116 passed out of the Senate Health & Human Services Committee on Wednesday, 7-0. The bill, as originally drafted, would require an appeal of a behavioral health claim that is subject to the capped fee-for-service schedule to be reviewed by an individual who has relevant clinical experience. An amendment was added in the committee that removed “fee-for-services” and replaced it with “service covered by the system,” looping in Managed Care Organizations (MCOs); however, the sponsor, Senator Werner, stated that she would remove MCOs on the floor through an additional amendment.
SB 1122 AHCCCS; Prior Authorization; Behavioral Health (Werner): SB 1122 will be heard in the Senate Health & Human Services Committee on Wednesday. The bill prohibits, beginning January 1, 2027, the Arizona Health Care Cost Containment System (AHCCCS) from requiring prior authorization for behavioral health services provided to a member under the American Indian Health Plan (AIHP) by a behavioral health provider unless outlined conditions apply.
SB 1159 Health Insurers; Savings Incentive Program (Shamp): SB 1159, right-to-shop, was assigned to the Senate Finance Committee. The bill establishes a savings incentive program for health insurers in Arizona. SB 1159 requires insurers to create and implement programs that encourage policyholders to save for healthcare expenses. It outlines specific criteria for the savings accounts, including tax advantages and eligibility requirements for participants. Additionally, the bill mandates that insurers provide educational resources to help consumers understand the benefits of the program. The bill is not scheduled to be heard this week.
SB 1165 Insurance; Cost Sharing; Breast Exams (Angius): SB 1165 was assigned to the Senate Finance Committee earlier this week. The bill mandates that insurance plans in Arizona cover breast exams without imposing cost-sharing on patients. The bill specifies that both screening and diagnostic breast exams must be included in the coverage, ensuring that individuals can access these services without financial barriers. Additionally, the legislation requires insurers to provide clear information regarding the coverage of breast exams to policyholders. The bill is not scheduled to be heard this week.
SB 1169 Appropriations; Graduate Medical Education Program (Werner): SB 1169 will be heard in the Senate Health & Human Services Committee on Wednesday. The bill appropriates funds for a graduate medical education program in Arizona. The bill allocates $1,000,000 from the state general fund for the fiscal year 2026-2027 to support this program. It aims to enhance the training and education of medical professionals in the state. The program is designed to address the need for more healthcare providers in Arizona, particularly in underserved areas. Additionally, the bill outlines the requirements for the distribution and use of the appropriated funds.
SB 1171 AHCCCS; Dual Enrollment; Notice (Werner): SB 1171 will be heard on Wednesday in the Senate Health & Human Services Committee. The bill requires the Arizona Health Care Cost Containment System (AHCCCS) to provide notice to individuals regarding dual enrollment in Medicaid and Medicare. The bill mandates that AHCCCS establish procedures for notifying eligible individuals about their options and the implications of dual enrollment. It also outlines the information that must be included in the notice, such as benefits, coverage, and potential costs. Additionally, the bill emphasizes the importance of ensuring that individuals understand their rights and responsibilities related to dual enrollment.
SB 1212 Health Insurance; Reimbursement Rates; Vaccines (Shamp): SB 1212 was assigned to the Senate Finance Committee earlier this week. The bill addresses reimbursement rates for vaccines under health insurance plans in Arizona. The bill mandates that health insurers provide coverage for vaccines at rates that are fair and equitable, ensuring that healthcare providers are adequately compensated for administering these immunizations. It specifies the types of vaccines that must be covered and outlines the conditions under which reimbursement is applicable. Additionally, SB 1212 requires insurers to report on their reimbursement practices to ensure compliance with the established standards.
SB 1347 Health Insurance; Fertility Preservation; Coverage (Werner): SB 1347 was introduced earlier this week and is currently awaiting committee assignment. The bill mandates that health insurance plans provide coverage for fertility preservation services. This includes coverage for procedures such as egg retrieval, sperm banking, and embryo freezing for individuals undergoing medical treatments that may affect their fertility. The bill applies to both individual and group health insurance policies. Additionally, it requires insurers to inform policyholders about the availability of these services.
Insurance Operations
HB 2091 Financial Surveillance Fund; Insurer Examinations (Livingston): HB 2091 passed out of the House Commerce Committee on Tuesday afternoon, 11-0. The bill updates ARS 20-156 to modernize the assessment structure that funds the Arizona Department of Insurance and Financial Institutions and specifically its ongoing financial surveillance of domestic insurers. The Arizona insurance industry has encouraged these updates to ensure that DIFI has the resources, staffing, and expertise necessary to maintain strong regulatory oversight and protect the stability of Arizona’s insurance marketplace.
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