FISCAL NOTE
Date Requested: February 27, 2023
Time Requested: 03:19 PM |
| Agency: |
Health and Human Resources, WV Department of |
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| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2704 |
Comm. Sub. |
HB3274 |
|
|---|
| CBD Subject: |
Actions, Suits and Liens |
|---|
|
FUND(S):
0403 - General Revenue, Medical Services; 8722 - Federal Funds, Division Human Services
Sources of Revenue:
Other Fund Both General and Other Fund (Federal)
Legislation creates:
Creates New Expense, Creates New Program
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The purpose of this bill is to create the Affordable Medicaid Buy-In Program.
The Department estimates the fiscal impact of this legislation to be $758,460 ($379,230 State funds and $379,230 Federal Funds). This amount reflects administrative costs and enrollment broker fees incurred by the Bureau of Medical Services. The Bureau for Medical Services (BMS) anticipates federal subsidies to cover the health coverage costs for these individuals. It is assumed that this Basic Health Program (BHP) will be operated similar to that under the Medicaid Program.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2023
Increase/Decrease
(use"-") |
2024
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
758,460 |
758,460 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
758,460 |
758,460 |
| 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):
Section 1331 of the Affordable Care Act gives states the option of creating a Basic Health Program (BHP), an alternative health insurance program for lower-wage residents who would otherwise be eligible to purchase coverage through the state Health Insurance Marketplace. The Basic Health Program gives states the ability to provide more affordable coverage for these residents and improves continuity of care for people whose income fluctuates above and below Medicaid eligibility levels.
Through the Basic Health Program, states can provide a new coverage option to individuals with income between 138 percent and 200 percent of the Federal Poverty Level (FPL). A state that operates a Basic Health Program will receive federal funding equal to 95 percent of the amount of the ACA Marketplace premium tax credits and the cost sharing reductions that would have otherwise been provided to (or on behalf of) eligible individuals if these individuals enrolled in qualified health plans through the state Marketplace. That federal funding will more than cover the cost of providing a more affordable health insurance coverage option to adults who earn between 138 percent and 200 percent of FPL. Individuals above the 200 percent FPL can purchase the coverage at full cost.
Workers who enroll will receive health insurance similar to what Medicaid provides them today, using the same Medicaid Managed Care Organizations (MCOs) who administer Medicaid and/or using other private insurance carriers. The capitated rates to the carriers who contract with the state to provide coverage for this new population will be higher than for today’s Medicaid enrollees, on the expectation that the MCOs or other carriers will share those rate increases with providers through increased reimbursement rates.
The Bureau for Medical Services (BMS) anticipates the federal subsidies to cover the health coverage costs for these individuals. Incorporating the BHP into managed care would be the most cost efficient option, as opposed to developing the plan in house as a "fee-for-service" model. Costs incurred by the BMS would include administrative costs; such as actuarial services and enrollment broker services. Actuarial costs are currently bid at $0.00, billable services are included in the managed care contract. The BMS anticipates approximately 30,000 members (or 30% of the members enrolled during the Public Health Emergency) to enroll in the Basic Health Plan. The enrollment broker fees associated would total $8,460 (30,000 members x $0.282 per member). It is assumed that this BHP will be operated similar to the Medicaid Program. The estimated Managed Care costs $750,000; this amount is based upon our current MCO contract ($3,000,000 per year/12 mo.= $250,000 per month; $250,000/4 MCO= $62,500 X 12 =$750,000).
Memorandum
The last sentence of the legislation currently appears incomplete, "The department shall maximize all available federal dollars the waiver." Possible correction, "The department shall maximize all available federal dollars awarded under the waiver."
West Virginia currently has a Medicaid Buy In program called Medicaid Work Incentive Network (MWIN) which is overseen by the WVU-Center for Excellence in Disabilities (CED) that allows people with disabilities to return to work and keep Medicaid.
Oversight of the state Medicaid agency is conducted by the Centers for Medicare/Medicaid Services (CMS), which must, under federal regulations, approve any and all amendments to each state's State Plan Implementation and is contingent upon approval of a State Plan Amendment.
It can be assumed that if more individuals obtained insurance and received services that it would have a positive impact on the budget due to a reduction in need for Indigent Care funding and possibly a decrease in crisis and higher level expenditures due to individuals receiving covered services earlier; however, an actuarial analysis would have to be conducted to determine potential overall impacts.
Any increases/decreases to the number of West Virginians with insurance coverage would likely have a corresponding impact on the Department's programs but the changes would be difficult to ascertain without an actuarial analysis.
Person submitting Fiscal Note: John Jackson
Email Address: DHHRBudgetoffice@wv.gob