PHOENIX — Senate Republicans sent out a news release claiming “taxpayers will be shelling out $788 million annually” to pay for state employees’ gender reassignment surgeries — but their spokeswoman now admits that’s not true.
The actual report to the Legislature from the Department of Administration, obtained by Capitol Media Services, pegs the annual cost to state taxpayers at a thousand times less — $788,000.
The net cost to insurance policyholders will be zero, according to the department’s director, Elizabeth Alvorado-Thorson.
That’s because the cost of funding the procedure for eligible employees and retirees represents 0.1% of the cost of current insurance claims. That is not only within the margin of error for actuarial estimates but “should not require a specific adjustment in rates,” she said.
The insurance coverage of the surgeries for state government and university employees will be new under an executive order issued last week by Democratic Gov. Katie Hobbs, which the Senate Republicans call an “abuse of power.”
Kim Quintero, communications director for the Senate Republicans, blamed the figure on a “typo.’’
“I’m used to writing ‘millions’ and not ‘thousands,’ ‘’ she told Capitol Media Services when asked about the report.
And while Senate Republicans have produced a steady stream of criticism of Hobbs, Quintero said the news release was not intended to scare people or score political points.
“I don’t want to give the impression I am trying to pump out false information,’’ she said. Quintero sent out a corrected version.
The figures cited publicly by the Republican lawmakers indicate more than 5,500 employees want gender reassignment surgeries.
CNN says the average $140,000 cost of male-to-female conversion is $140,000.
Insurance carrier covers it elsewhere
Arizona already pays for some gender-affirming care for state and university workers and retirees, including hormone replacement.
But since at least 2017, the plan has had a specific exclusion for “gender reassignment surgery,’’ even in cases where a doctor determines the procedure is medically necessary.
Hobbs, in her order Friday, directed the Department of Administration to remove it. That was not done in a vacuum.
In an explanation to lawmakers, Alvorado-Thorson explained that the state’s two insurance carriers — UnitedHealthcare and BlueCross BlueShield of Arizona — already include that in their standard policies they write for other clients. Only the policies they write for Arizona omit it.
“By removing the exclusion for gender reassignment surgery, ADOA will be aligning its covered benefits with the standard coverages provided by our contracted carriers,’’ she wrote.
Order effectively ends lawsuit vs. state
Also, University of Arizona Professor Russell Toomey filed suit against Arizona four years ago in federal court to get the state to pay for a “medically necessary’’ hysterectomy.
Hobbs made it clear there were concerns his claim of sex discrimination would be affirmed. Her executive order cited similar successful lawsuits against other states.
In changing the policy going forward, the state also effectively settled Toomey’s lawsuit without incurring further legal expenses.
The cost of what he wants is virtually certain to be far less than the $140,000 figure: Toomey already paid years ago for his own chest-reduction surgery.
Senate president blasts Hobbs
The lack of any actual cost to Arizona taxpayers is unlikely to change the objections of Senate President Warren Petersen.
Last week, before the cost report from the Arizona Department of Administration, the Gilbert Republican lashed out at Hobbs.
“Instead of helping struggling Arizona families plagued by inflation, the governor just issued an order for taxpayers to cover the cost of elective, sex reassignment surgeries,’’ Petersen wrote in a Twitter post. He called it “illegal, out of touch (and) unprecedented.’’
Petersen also complained the change had not received proper review by the Joint Legislative Budget Committee.
In fact, though, Alvorado-Thorson sent her report to that committee the day Hobbs announced the change, laying out the cost — in this case, none — and saying the change will be implemented in 45 days.
The law says only that the committee, dominated by Republican lawmakers, must be notified. Committee members lack any legal authority to veto the change or make alterations.
Petersen did not respond Monday to a request for comment.
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