0588, 2154 (Children's Operating Fund), 8838

Sources of Revenue:

General Fund

Legislation creates:

Neither Program nor Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

    This bill would enable the WV CHIP to expand coverage to families with incomes up to 300% FPL. This bill would also require WV CHIP to implement cost-sharing provisions for children of families whose incomes exceed 150% FPL. These provisions may include enrollment fees, premiums, co-payments, and deductibles, or a combination thereof.
    WV CHIP currently imposes cost-sharing provisions on children of families with incomes that exceed 150% FPL in the form of co-payments for drugs, physician office visits, inpatient and outpatient hospital services, as well as emergency room services, which are waived if the child is admitted to the hospital. In addition to cost-sharing requirements currently imposed, WV CHIP would recommend that families above 200%FPL pay a monthly premium to help offset additional program costs that will be incurred under the expansion.

Fiscal Note Detail

Effect of Proposal Fiscal Year
Fiscal Year
(Upon Full
1. Estmated Total Cost 0 5,128,775 13,643,580
Personal Services 0 0 0
Current Expenses 0 5,128,775 13,643,580
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 1,167,946 3,122,873

Explanation of above estimates (including long-range effect):

    This bill would allow WV CHIP to expand program eligibility to children of families with incomes up to 300% FPL and implement cost-sharing provisions for families with incomes over 200% FPL. Projections included in this fiscal note are based on assumptions made in Expanding the West Virginia Children's Health Insurance Program through Increased Cost Sharing as required by HB 4412 and with acturarial updates submitted by WV CHIP to the WV State Legislature in January 2005. This study assumes that families above 200% FPL would pay monthly premiums per child that would cover 20-25% of the actual cost of coverage for this eligibility group. Based on current program trends of 14%, these cost are projected to average $44.97 per child in FY 2006, $47.95 in FY 07, and increasing to $59.14 in FY 2009. Please note that costs upon full implementation are based on projections for FY 2009.
    Average monthly enrollment for this expanded eligibility group, 200%-300% FPL, is expected to be 2,164 for FY 2006, 3,665 for FY 2007, and increasing to 4,400 by FY 2009. Revenues from premiums, which are used to offset total program costs before calculation of the state and federal shares, are expected to be $1,167,946 in FY 2006, $2,108,954 in FY 2007, and increasing to $3,122,873 in FY 2009.
    Additional total program costs for children enrolled in CHIP under the new 300% FPL income limits are projected to be $5,128,775 in FY 2006, $9,244,982 in FY 2007, and $13,643,580 in FY 2009. The state's portion of these cost would be $969,851 in FY 2006, $1,748,226 in FY 2007, and $2,580,000 in FY 2009. These additional costs include administrative and medical costs. The program anticipates additional administrative costs with regards to premium billing and collections as a result of this expansion.
    The projections summarized above assume state and federal match rates of 18.91% and 81.09%, respectively. Please note that these projections are based on current program experience in regards to trends in claims costs and enrollment. Any changes to current trends will impact these projections. These projections take into account funding currently available to the program, and any excess state funding which may be carried forward to next fiscal year.


    WV CHIP would require a three to six months start-up period for this expansion in order to allow for a plan of modification review and approval by the Children's Health Insurance Board; implement a premium collections system and also to file a State Plan amendment with CMS, which has a minimum 90-day approval period.

    Person submitting Fiscal Note: Hank Woodson
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