Medical malpractice insurance assistance.

06LSO-0440.L3

FISCAL NOTE

This bill contains an appropriation of $6,000,000 from the BUDGET RESERVE ACCOUNT.  This appropriation is effective immediately.

This bill contains an appropriation of $150,000 from the BUDGET RESERVE ACCOUNT.  This appropriation is effective immediately.

This bill would result in expenditure increases from the newly created Medical Liability Insurance Assistance Account.

Source of Expenditure Increase:

The state will cover 25 percent of a physician's professional liability insurance on an annual basis.  A cap of $35,000 in assistance will apply to each individual physician.

Assumptions:

For 2004, the last year for which information is available, there were premiums of $14,289,856 written for physicians' professional liability insurance in Wyoming.  This number is for doctors only and does not cover hospitals or other health care professionals.  A 15 percent per year inflation rate has been added to the 2004 premiums in order to determine the amounts that might be paid out over the three years covered by the bill.  (This is a guess as it is impossible to know what type of rate increases the insurers may file for during the next three years.)

Excluding the $35,000 cap (which would apply to physicians with an annual premium of $140,000 or above) and rounding the 2004 amount, 25 percent equals $3,575,000 per year.

If 15 percent inflation is added, 25 percent of the premiums would be $4.7 million for 2006, $5.4 million for 2007, and $6.3 million for 2008.  Assuming all Wyoming doctors are qualified and chose to apply for the full 25 percent assistance, the $6 million appropriation may not be sufficient to cover the amounts for the premium subsidy.  Therefore, according to proposed W.S. 26-33-204(e) in the bill, priority would need to be given to areas where primary care services are most severely restricted.

State Treasurer impact:  On its own, this bill does not require additional personnel and/or expenditures.  However, the State Treasurer's Office would like to note that it has already seen multiple requests for fiscal notes that require additional tasks and/or administration.  If all of these types of bills were to pass, it may be necessary to seek additional personnel and/or appropriations as a supplemental budget request.

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NOTICE-AGENCY ESTIMATE OF ADMINISTRATIVE IMPACT REQUESTED

This bill has administrative impact that appears to increase (or decrease) duties or responsibilities of one or more state agencies and may impact agency spending or staffing requirements. As introduced, the bill modifies the Insurance Department's budget.

The following state agencies will be asked to provide their estimate of the administrative fiscal impact prior to the first committee meeting held to consider the bill:

Insurance Department

Prepared by:   Don Richards, LSO           Phone:  777-7881

(Information provided by Ken Vines, Insurance Commissioner, phone:  777-6894 and Sharon Garland, State Treasurer's Office, phone:  777-7475.)