FISCAL NOTE
Date Requested: February 19, 2024
Time Requested: 09:00 AM |
| Agency: |
Human Services, WV Department of |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3813 |
Introduced |
HB5647 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
0403 - DIV OF HUMAN SERVICES GENERAL ADMINISTRATION FUND; 8722 - CONS FEDERAL FUNDS DIV HUMAN SERVICES GEN ADMN FD
Sources of Revenue:
Other Fund General and Federal
Legislation creates:
Increases Revenue From Existing Sources, 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 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 fiscal impact under the proposed tier system, based upon managed care member months for both Medicaid and non-Medicaid patients, of $107,608,540 before federal match and $412,372,255 with a federal match, assuming a blended FMAP of 73.91%. When applied to the current tax rates, the increase is $56,008,540 before federal match and $214,633,225 with federal match, assuming a blended FMAP of 73.91%.
This increase will also result in increased expenditures to the managed care organizations of $60,629,504 ($11,722,775 state funds based on mix of expansion and non-expansion population).
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2024
Increase/Decrease
(use"-") |
2025
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
60,629,504 |
60,629,504 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
60,629,504 |
60,629,504 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
214,633,225 |
214,633,225 |
Explanation of above estimates (including long-range effect):
Estimated gross receipts were based upon February 2024 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 @ $66.5 per member ($66,500,000), b) 250,000-500,000 @ $38 per member ($38,000,000) c) >500,000 @ $1.9 per member (2,929,504), d) <150,000 @ $0.48 per non-Medicaid member ($164,822) and e) =>150,000 @ $0.19 per non-Medicaid member ($14,214). Total tax of $107,608,540 less current of $51,600,000 for net increase of $56,008,540.
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 $60,629,504 ($107,429,504 less current at $46,800,000). State share of $11,722,775 based on mix of expansion and non-expansion population.
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: Cynthia A. Persily, Ph.D.
Email Address: dhhrbudgetoffice@wv.gov