FISCAL NOTE
FUND(S):
0588, 2154 (Children's Operating Fund), 8838
Sources of Revenue:
General Fund,Other Fund Federal
Legislation creates:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
This bill would require that WV CHIP expand coverage to families with incomes up to 250% FPL. This bill would also require WV CHIP to implement cost-sharing provisions for children of families whose incomes exceed 200% 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. It appears this bill would eliminate cost-sharing for these families. The projected cost of this legislation is based on the assumption that cost-sharing provisions currently in place for families between 150-200% FPL will continue.
Also provided in the memorandum section of this fiscal note is additional information regarding this bill if cost-sharing provisions for families with incomes between 150% and 200% FPL are discontinued.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2005
Increase/Decrease
(use"-") |
2006
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
2,701,718 |
7,143,643 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
2,701,718 |
7,143,643 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
549,605 |
1,459,465 |
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 250% 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 submitted by WV CHIP to the WV State Legislature in January 2005 required by HB 4412. 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 premiums are projected to be $40.21 per child in FY 2006, $42.84 in FY 07, and increasing to $52.88 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%-250% FPL, is expected to be 1,139 for FY 2006, 1,924 for FY 2007, and increasing to 2,300 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 $549,605 in FY 2006, $989,190 in FY 2007, and increasing to $1,459,465 in FY 2009.
Additional program costs for children enrolled in CHIP under the new 250% FPL income limits are projected to be $2,701,718 in FY 2006, $4,855,936 in FY 2007, and $7,143,643 in FY 2009. These additional costs include administrative and medical costs. The program anticipates only minimal additional administrative costs with regards to premium billing and collections as a result of this expansion. The additional administrative costs are expected to be around $0.65 per participant per month.
The projections summarized above assume the current state and federal match rates of 17.74% and 82.26%, 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.
Memorandum
As stated earlier, page 4 lines 15 through 20 of this bill appear to change the income levels on which the program may impose cost-sharing provisions by striking-through one-hundred fifty and underlining two hundred. The program currently imposes cost-sharing provisions on families with incomes from 150% to 200% FPL, in the form of co-payments. CHIP avoided $1,016,452 of program costs during SFY 2004 as a result of these cost-sharing requirements. If this is the true intent of the bill, the program will have additional costs in regards to this provision, which are not included in the estimates presented above.
WV CHIP would require a three to six months start-up period for this expansion in order to implement a premium collections system and also to file a State Plan amendment with CMS, which has a 90-day approval period.
Person submitting Fiscal Note: Stacey L. Shamblin
Email Address: sshamblin@wvchip.org