COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 0793-01
Bill No.: SB 194
Subject: Insurance - Medical; Insurance Department
Type: Original
Date: January 30, 2001
FISCAL SUMMARY
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| All Funds | (Unknown) | (Unknown) | (Unknown) |
| Total Estimated
Net Effect on All State Funds |
(UNKNOWN) | (UNKNOWN) | (UNKNOWN) |
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| None | |||
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| Local Government | (UNKNOWN) | (UNKNOWN) | (UNKNOWN) |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 4 pages.
ASSUMPTION
Officials from the Department of Transportation and the Department of Conservation assume this proposal would not fiscally impact their agencies.
Department of Social Services (DOS) officials state there is no fiscal impact to the Division of Medical Services (DMS) assuming Medicaid managed care plans can continue to prior authorize medications on the drug formulary as they currently are able to do. DOS also assumes the DMS can increase co-pays for the 1115 waiver premium group as allowed under section 208.640.
Officials from the Department of Insurance (INS) state this proposal would prohibit health insurers from removing coverage for prescription drugs already on a formulary and from raising an enrollee's co-payment, co-insurance or other out-of-pocket expense for formulary drugs except on the policy annual anniversary date. INS states the proposal may require some insurers to file amendments to policy forms or contracts if they contain language contrary to the proposal. The number of insurers would not be significant and the impact to the department would be minimal for this single proposal.
Missouri Consolidated Health Care Plan (HCP) officials state the HCP board establishes the contract cost sharing benefits. Any health maintenance organization that contracts with HCP agrees to these contract terms. Therefore, the health maintenance organization would not be able to change this aspect of the prescription drug benefit and there would be little if any fiscal impact during the current contract year. Not being able to change the formulary drugs would not have an immediate cost impact. However, upon subsequent renewals, the health plans may adjust their premiums to reflect any lost savings in the previous year due to the inability to remove a more costly brand from the formulary when a generic is available. HCP's PPO and Copay plans are self-funded. The impact of any expenses incurred from the inability to adjust the formulary would be immediate. The cost impact is not possible to calculate since it cannot be determined at this time what, if any, formulary drugs may change for each of the HMOs and/or the self-insured plans.
Officials from the Department of Public Safety - Missouri State Highway Patrol (MHP) did not respond to our fiscal impact request. However, in response to a similar proposal from last session MHP assumed no fiscal impact.
| FISCAL IMPACT - State Government | FY 2002
(10 Mo.) |
FY 2003 | FY 2004 |
| ALL FUNDS | |||
| Costs - Missouri Consolidated Health Care Plan | |||
| Increase in state contributions | (Unknown) | (Unknown) | (Unknown) |
| ESTIMATED NET EFFECT ON ALL FUNDS |
(UNKNOWN) |
(UNKNOWN) |
(UNKNOWN) |
| FISCAL IMPACT - Local Government | FY 2002
(10 Mo.) |
FY 2003 | FY 2004 |
| LOCAL POLITICAL SUBDIVISIONS | |||
| Costs - Local Political Subdivisions | |||
| Increase in premium contributions | (Unknown) | (Unknown) | (Unknown) |
| ESTIMATED NET EFFECT ON LOCAL POLITICAL SUBDIVIONS |
(UNKNOWN) |
(UNKNOWN) |
(UNKNOWN) |
FISCAL IMPACT - Small Business
Small health maintenance organizations (HMO) could be affected by this proposal.
DESCRIPTION
This proposal would prohibit health carriers from changing their drug formularies except at the beginning of the policy anniversary date or pursuant to a FDA recommendation. The health carrier may add new prescription drugs to its formulary. The health carrier may not increase an enrollee's co-payment or other out of pocket expenses except at the beginning of the policy annual anniversary date.
This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.
SOURCES OF INFORMATION
Department of Transportation
Department of Social Services
Missouri Consolidated Health Care Plan
Department of Insurance
Department of Conservation
NOT RESPONDING: Department of Public Safety - Missouri State Highway Patrol
Jeanne Jarrett, CPA
Director
January 30, 2001