FISCAL NOTE



FUND(S):

2180

Sources of Revenue:

Special Fund

Legislation creates:

A 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 a health care plan for uninsured adults that provides primary and preventive care. The bill sets the plan’s cost at $40 per month per subscriber, plus a modes co-payment by a subscriber for each visit to a provider. The bill’s funding is to be provided by the State of West Virginia, the uninsured adult and his or her employer. The bill provides the Health Care Authority and the Director of the Public Employees Insurance Agency with the authority to develop the plan and to promulgate regulations. The bill also provides for licensing requirements for participating health care providers and provides the Health Care Authority with the authority to suspend, revoke or non-renewal providers’ license and penalties. The biggest expense for this program would be the 50% of the $40 monthly fee required in this bill. For each person enrolled the State of West Virginia is obligated $240 per year. While the funding for the program is not identified in the bill this fiscal note assumes that it will paid from the General Revenue fund and not a Special Revenue fund. The PEIA Board Actuary, CCRC Actuaries, projected the expected costs to be: Costs: Key Assumption: Premiums cover medical expenditures, not administrative costs $480 per member per year in 2010 8% program trend 270,000 Uninsured adults in West Virginia 50% Member share of Premium 40% Take up rate Costs: Key Assumption: Premiums cover medical expenditures, not administrative costs $480 per member per year in 2010 8% program trend 270,000 Uninsured adults in West Virginia 50% Member share of Premium 40% Take up rate Total Member State Administrative Total Members Premiums Share Share Costs Costs 2010 108,000 $51,840,000 $25,920,000 $25,920,000 $1,555,200 $27,475,200 2011 108,000 $55,987,200 $27,993,600 $27,993,600 $1,679,616 $29,673,216 2012 108,000 $60,466,176 $30,233,088 $30,233,088 $1,813,985 $32,047,073 WV PEIA sees itself as having to establish a separate administrative section for the delivery of this product. Since the billing/invoicing will be done individually instead of for a group plan the staff personnel required to direct invoice, collect, deposit and reconcile accounts will be considerable. PEIA direct invoices approximately 3,000 retirees at present and the process requires one full-time Accounting Tech III. Salary and benefits for a single employee of this type would be approximately $40,000 per year. If the expected membership of 108,000 is reached the burden to PEIA administratively will far exceed the expected revenues after claims payment. The expected total cost for the first three years is expected to be: $84,146,688.00



Fiscal Note Detail


Effect of Proposal Fiscal Year
2009
Increase/Decrease
(use"-")
2010
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 27,475,200 32,047,073
Personal Services 0 0 0
Current Expenses 0 0 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):






Memorandum






    Person submitting Fiscal Note: J. Michael Adkins, Deputy Director
    Email Address: michael.adkins@wv.gov