BILL #    HB 2333	TITLE: insurance; prosthetics; orthotics; reporting requirements
SPONSOR:    Heap	STATUS: As Amended by House HHS
PREPARED BY:    Brian Belakovsky

Description

The bill would mandate coverage requirements of prosthetic and custom orthotic devices up to at least the Medicare Part B coverage limit by private health insurers, including the state employee health plan. The bill also institutes reporting requirements for these insurers to the Department of Insurance and Financial Institutions (DIFI) regarding prosthetic and custom orthotic coverage.

Estimated Impact

We cannot determine the fiscal impact of this bill, although it is likely that the bill would increase costs to the state employee health plan beginning in FY 2027. Increased costs under this bill would primarily be associated with a greater utilization of specialty prosthetic and orthotic devices above current coverage levels.

The Department of Insurance and Financial Institutions (DIFI) stated that it "cannot calculate an estimate of the fiscal impact of this bill without conducting an actuarial study using data from private health insurers."

We have asked the Arizona Department of Administration (ADOA) for an estimate of the bill's fiscal impact, but we have not yet received a response.

Analysis

Our estimated impact is based on the following assumptions and data sources:

1) As part of the Affordable Care Act, the federal government mandated that non-grandfathered or otherwise exempted health insurers cover Essential Health Benefits (EHBs), a ten-category coverage plan benchmarked by individual states. Arizona's EHB includes prosthetic coverage insofar as it is "necessary for the alleviation or correction of illness, injury, congenital defect, or alopecia as a result of chemotherapy, radiation therapy, and second or third degree burns," for Plan Years 2025-2027, according to the Centers for Medicare and Medicaid Services (CMS).

2) This bill would expand the coverage of prosthetics and custom orthotics to include coverage necessary so as to "complete activities of daily living or essential job-related activities" and to "perform physical activities, including running, biking, swimming or strength training, to maximize the covered person's whole body health and lower and upper limb function."

2/16/26