Date Requested: February 28, 2020
Time Requested: 05:58 PM
Agency: Health and Human Resources, WV Department of
CBD Number: Version: Bill Number: Resolution Number:
2836 Comm. Sub. SB719
CBD Subject: Taxation



Sources of Revenue:

Special Fund

Legislation creates:

Fiscal Note Summary

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

The purpose of this bill is to impose a tiered tax on HMOs in a manner that will permit the maximization of federal matching dollars for use in the state Medicaid program. The Department estimates a fiscal impact under the proposed tier system, based upon managed care members months for both Medicaid and non-Medicaid patients, of $44,700,823 before federal match and $235,267,489 with a federal match, assuming a blended FMAP of 81%.

Fiscal Note Detail

Effect of Proposal Fiscal Year
Fiscal Year
(Upon Full
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 235,267,489 235,267,489

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

Estimated gross receipts to establish a baseline for tier development were based upon calendar 2016 receipts for commercial carriers and projected state fiscal year 2018 capitation for the Managed Care Organizations. The calculation for the tax is based upon the number of Medicaid member months separated into five tiers: a) <250,000 @ $35 per member ($26,250,000), b) 250,000-500,000 @ $20 per member ($15,000,000) c) >500,000 @ $1 per member (3,377,738), d) <150,000 @ $0.25 per non-Medicaid member ($56,245) and e) =>150,000 @ $0.10 per non-Medicaid member ($16,840).


The changes to the HMO marginal tax rates in this bill are recommended by the Department to better position the tax for Centers for Medicare & Medicaid (CMS) regulations governing the process by which states may obtain waivers for non-uniform taxes such as this one. Current rates in code have not been approved by CMS, therefore cost in fiscal note reflects total rather than just difference for change to rates.

    Person submitting Fiscal Note: Bill J. Crouch
    Email Address: