FISCAL NOTE
Date Requested: March 04, 2025
Time Requested: 01:43 PM |
| Agency: |
Human Services, WV Department of |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3040 |
Introduced |
HB2473 |
|
|---|
| CBD Subject: |
Health; Taxation |
|---|
|
FUND(S):
5090 - Medicaid State Share Fund, 8722 - Cons Federal Funds Div Human Services Gen Admn Fd
Sources of Revenue:
Other Fund General and Federal
Legislation creates:
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The purpose of this bill is to increase and maintain the bracketed tax rates on the privilege of establishing or operating a health maintenance organization, specify effective dates, and provide a process for rates to be certified to the tax commissioner and require notice to be provided.
The Department estimates a additional revenue under the proposed tier system, based upon managed care member months for both Medicaid and non-Medicaid patients, of $56,689,287. Total revenue based on the new rates is projected at $116,535,325. When applied to the current tax rates bringing in an estimated $59,846,038, the net increase is $56,689,287.
This increase will also result in increased expenditures to the managed care organizations of $56,437,896 ($10,765,100 state funds based on mix of expansion and non-expansion population).
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2025
Increase/Decrease
(use"-") |
2026
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
56,437,896 |
56,437,896 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
56,437,896 |
56,437,896 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
56,689,287 |
56,689,287 |
Explanation of above estimates (including long-range effect):
Estimated gross receipts were based upon January 2025 Managed Care enrollment data. The calculation for the tax is based upon the number of Medicaid member months separated into five tiers: a) <250,000 @ $78.75 per member ($75,757,276), b) 250,000-500,000 @ $45 per member ($33,750,000) c) >500,000 @ $2.25 per member (6,776,658), d) <150,000 @ $0.56 per non-Medicaid member ($234,185) and e) =>150,000 @ $0.23 per non-Medicaid member ($17,206). Total tax of $117,475,275 less current of $59,846,038 for net increase of $56,689,287.
Increase expenditures to MCO is calculated by actuaries based on Medicaid member month revenues. For purposes of this increase, expenditures to MCO would increase by $56,437,896 ($116,283,934 less current at $59,846,038). State share of $10,765,100 based on based on mix of expansion and non-expansion population).
Memorandum
The proposed SFY26 PMPM tax amounts in the bill are less than the 6.0% target.
The language in the bill says the tax rates will be adjusted to maintain revenue at six percent of the cost of care. However, this is a hard target to set prospectively. It may be prudent to allow for flexibility to target 5.5% or some other slightly lower number.
Fiscal note is responsive to Committee Markup Discussion, 03/05/2025.
Person submitting Fiscal Note: Alex J. Mayer
Email Address: osafiscalnotes@wv.gov