Obamacare relief.

14LSO-0206.L2

FISCAL NOTE

This bill contains an appropriation of $2,000,000 from the GENERAL FUND to the Insurance Department.  This appropriation is effective immediately.

This bill contains an appropriation of $50,000 from the GENERAL FUND to the Insurance Department.  This appropriation is effective immediately.

DETAIL OF APPROPRIATION

Agency #:  044     Agency Name:  Insurance Department

Unit:  0104 (Wyoming Health Insurance Pool)

EXPENDITURE BY SERIES AND YEAR       FY 2014         FY 2015         FY 2016

0600  Grant & Aid Payments           Up to $2,000,000                                  

0900  Contractual Services           Up to $50,000                                  

Total Expenditure Per Year:                Up to $2,050,000                                

Grand Total Expenditure:            $2,050,000

Total Appropriated to Agency:       $2,050,000

Total Appropriated by Fund

GENERAL FUND             :          $2,050,000

Discussion of the Appropriation:

Both appropriations are to be expended for the purpose of the Wyoming Insurance Department (WID) contracting with the Wyoming Health Insurance Pool (WHIP) to support the organization, management and benefit claims of the programs authorized in the act: 1) the Obamacare Temporary Relief Program (OTRP); 2) the Closed Exchange Enrollment Temporary Relief Program (CEETRP); 3) the Wyoming Temporary Medical Welfare Program (WTMWP); and modifies 4) the Wyoming Small Employer Health Reinsurance Program (WSEHRP).  The appropriation of $50,000 General Funds is for contracting with the WHIP for program startup and the appropriation of $2,000,000 General Funds is for payment of claims and ongoing management of the WTMWP.

The bill also modifies a previous appropriation of $1,500,000 General Funds for the state's Healthcare Reform Demonstration Project, commonly known as Healthy Frontiers (2011 Laws, Ch. 134, which modified 2010 Laws, Ch. 96).  Of this original appropriation, there remains $1,378,591, from which the bill authorizes use of these funds to pay claims in excess of the appropriations authorized in this bill.

Assumptions:

All appropriations are effective immediately.  However, a year-by-year analysis of how and when these appropriations may be expended is currently indeterminable without an actuarial analysis or sufficient enrollment and claims experience from the program once it is up and running.  This act is no longer effective after December 31, 2018.

Note:  The bill also requires two other state agencies to perform functions for this program.  The Wyoming Department of Family Services is responsible for enrollment of individuals in the WTMWP as consistent with other state means tested programs.  The Wyoming Business Council must formulate rules/regulations and an application and reimbursement process from which small employers may seek reimbursement for fronting subsidy payments to employees ceded to the WSEHRP.

Legislation Revenue Impact:     1) Premiums for participants in the OTRP and CEETRP are required to cover the full cost of policies issued under these programs, with specific conditions as noted in the bill.  Premiums for participants in the WTMWP are not expected to cover the cost of claims and administration and therefore will partly be covered by the appropriations in the bill.  2) Assessments on insurance companies will be impacted by this bill for the WHIP and WSEHRP.  3)  Premium tax revenue may decrease due to tax credits allowed for insurers under the WHIP and WSEHRP.  Premium tax revenue may also decrease as premiums due under these programs are not subject to premium taxes.  If individuals previously enrolled in a private insurance plan that is subject to premium tax enrolls in one of the three programs created by the bill, premium taxes will not be paid on this coverage.  Accurate, annual estimates of these revenue increases or decreases cannot be determined at this time.

Legislation Expenditure Impact:      1) The WHIP program will experience increased expenditures for program administration and claims payments for the OTRP, WTMWP, and the CEETRP.  Expenditure assumptions for the WHIP include, but are not limited to:  claims expenses, fees for the program administrator, counseling expenses for participants/potential participants related to the proposed programs; establishing process for income verification and exchange subsidies if not absorbed by the contract administrator; written notification to enrollees; establishing an agent appointment process, commission and referral fees; potential staff for WHIP to handle enrollment (current administration is limited to collection of premiums and paying claims, but no current staffing outside plan administrator); increased travel expenses for proposed marketing committee.  2)  The WSEHRP will experience increased expenditures for reimbursements (managed by the Wyoming Business Council) to small employers which will pay subsidies to their employees in the program.  Accurate, annual estimates of these expenditure increases cannot be determined at this time.

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 does not modify any state agency budget or current personnel authorizations.

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:

Wyoming Insurance Department

Wyoming Business Council

Prepared by:    Michael Swank, LSO                         Phone:     777-7881

(Information provided by Stephanie McGee, Wyoming Insurance Department, 777-6896; Diane Joyce, Wyoming Business Council, 777-2848; Nick Baird, Wyoming Department of Family Services, 777-6100)