FISCAL NOTE
Date Requested: February 11, 2020
Time Requested: 12:17 PM |
| Agency: |
Health and Human Resources, WV Department of |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3165 |
Introduced |
HB4828 |
|
|---|
| CBD Subject: |
Health |
|---|
|
FUND(S):
5071 - WV CHILDREN'S HEALTH INSURANCE FUND
Sources of Revenue:
Other Fund Non-appropriated Special
Legislation creates:
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 expand Children's Health Insurance Program (CHIP) coverage by creating a CHIP buy-in program for children of families above 300 percent of the federal poverty level and who can pay the total cost.
The Department estimates fiscal impact related to this legislation at $2,600,000. A "reserve" would be needed to cover the risk of any catastrophic claims or high cost members that may occur prior to "build-up" of an acceptable level of "reserve." Projections for implementing a "full buy-in" plan estimate 600 total enrollees by SFY 2023 and a built-up "reserve" of approximately $95,570 by the end of SFY 2023. This "reserve" is insufficient to cover any catastrophic expenses. Therefore, the Department estimates it would need one-time funding of approximately $2,600,000; $2,000,000 as the minimum reserve requirement and $600,000 to cover start up costs related to development and implementation of enrollment, claims processing, and premium collections systems, as well as an additional staff to administer the program.
CMS state plan approval is not necessary, as this program would not utilize federal funding.
Premiums will be set to cover expenditures.
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 |
2,600,000 |
67,417 |
| Personal Services |
0 |
67,417 |
67,417 |
| Current Expenses |
0 |
2,532,583 |
0 |
| 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):
The department estimates it would need one-time funding of approximately $2,600,000; $2,000,000 as the minimum reserve requirement for health payers in the state according to the Office of Insurance Commission and $600,000 to cover start up costs related to development and implementation of enrollment, claims processing, and premium collections systems, as well as additional staff to administer the program. Because this "full buy-in" program does not meet the definition of "targeted low-income" child under Title XXI, no federal monies are available for financing administrative or operational costs.
Of the $600,000 start up costs $67,417 ($71,042 minus current state portion of $3,625) will be needed for the funding shift from Federal to State for the current position that will be utilized for these new duties. $71,042 comes from 94% of the midpoint $75,577 (salary of $55,571 and $20,006 for employee benefits ($55,571*.36)).
Memorandum
Projected state costs for this bill assumes this "buy-in" program will operate the same as the current WVCHIP as fee-for-service. WVCHIP plans to transition to managed care in July 2020. WVCHIP has the option of including this "buy-in" as a part of any managed care contract - no legislation needed.
Person submitting Fiscal Note: Bill J. Crouch
Email Address: dhhrbudgetoffice@wv.gov