FISCAL NOTE

Date Requested: January 27, 2020
Time Requested: 11:31 AM
Agency: Public Employees Insurance Agency (PEIA)
CBD Number: Version: Bill Number: Resolution Number:
2495 Introduced HB4553
CBD Subject: Insurance


FUND(S):

PEIA Basic Insurance

Sources of Revenue:

Special Fund

Legislation creates:

Increases Existing Expenses



Fiscal Note Summary


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


    The purpose of this bill is to require health insurance providers in this state to provide insurance coverage for fertility services. Infertility is defined as an inability to conceive after one year of trying or after 6 months if over the age of 35. 12% of the female population between ages 15-44 have sought infertility services. 9.4% of men age 15-44 have infertility. Approximately 1/3 of infertility is from female causes, 1/3 male causes, and 1/3 both male and female or unexplained. Causes of infertility include diseases, trauma, or birth defects and infertility is considered by the World Health Organization as a disease state. It is recognized by the US as a disability.
    
    Currently PEIA has 34,423 members who are female age 18-46 and 30,134 members who are men ages 18-46. If national data shows a 12% infertility service rate in childbearing women, then 4,130 female members may need some type of infertility service. Out of the 34,423 cases, 3% or 1,032 members will need some type of assisted reproductive technology.
    
    Approximately 60% of employers with more than 500 employees cover some type of infertility services. Out of that 60%, 20% cover infertility drugs, 24% cover In-Vitro Fertilization (IVF), and 23% cover artificial insemination. Nine states mandate coverage for infertility treatment and the services and treatment requirements vary considerably. Five states require the offer of infertility coverage including WV. W. Va. Code 33-25A-2 states HMOs must offer coverage for “basic health care services,” which includes infertility services. The code does not specify as to what services under infertility are mandated. PEIA currently covers a physician visit for the diagnosis of infertility. Some treatments for infertility are covered by PEIA if the primary diagnosis is a medical condition. Examples would include treatment for endometriosis and uterine fibroids. West Virginia currently has three centers who provide in vitro fertilization.
    
    Passage of this bill would create a significant increase in costs to PEIA. Utilizing the New York State Department of Financial Services (NYFS) report on IVF and Fertilization Preservation Coverage (FP), PEIA could expect a 1.02% increase in claim costs. Unlimited IVF accounts for the greatest aspect of this cost at 1%. Application of the 1.02% to PEIA non-Medicare active employee claims in fiscal year 2021 results in an estimated increase of $6.9 million to the plan.
    
    PEIA’s research indicates cost estimates greater than 1%, as the treatment used for over 50% of infertility cases is IVF. IVF charges average $12,000 with the average of 3 treatments per case. Assuming 50% of PEIA’s 1,032 members require assistance and a discount of 50% off charge, the total cost is 1.42% of PEIA’s total costs. Due to this, and the assumption of pent up initial demand, PEIA has assumed an increase of 1.5% of claim costs resulting in an estimated increase of $10 million.
    
    The cost can be reduced and still be a meaningful, well received benefit to our members. By limiting the benefit to an age range, to only the policyholder or spouse, by number of attempts of embryo transfers, by number of cryopreservation or capping the benefit at a specific value, the cost of the benefit can be managed to mitigate increased premiums. Per NYFS’s report, capping the number of IVF’s at three reduced the estimated cost by .02%, a savings of $1.4 million. Similar caps can be implemented by setting limit on the benefit value and allowing the member to seek any treatment deemed necessary per their condition.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2020
Increase/Decrease
(use"-")
2021
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 10,000,000 10,000,000
Personal Services 0 0 0
Current Expenses 0 10,000,000 10,000,000
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0


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


    Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.



Memorandum


    Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.



    Person submitting Fiscal Note: Jason Haught
    Email Address: jason.a.haught@wv.gov