Francisco Felix, 32, of Laveen suffers from hepatitis C. The liver he would have received was offered by a friend whose wife was dying.
But the Arizona Health Care Cost Containment System has stopped paying for transplants for patients in his situation, at least partly because of the low success rate.
Because Felix's family was unable to get the money for the procedure between Monday evening and Tuesday morning, the organ was transplanted into the next candidate on the waiting list, The Arizona Republic reported.
"It was his day today. If we had the money, someone to pay for it, he would have received the liver," Felix's wife Flor told the newspaper. "How can people make this decision? How does one person have the right to decide who's going to live and who's not?"
Patients with failing livers because of hepatitis C are unlikely to survive without a transplant. At the same time, the virus usually spreads to the new liver quickly and eventually causes it to fail.
Felix, whose doctors say he will still be healthy enough for a transplant for a year or so, is believed to be the first person to miss out because of the policy that went into effect Oct. 1. In October, a leukemia patient was denied a bone-marrow transplant after losing coverage, but an anonymous donor then came forward with the money.