Fiscal Note - SB 0268 - Insurers to Cover Payment For Drugs For Off-Label Use
L.R. NO. 0694-03
BILL NO. SB 268
SUBJECT: Health Care, Insurance-Medical, Department of Insurance, Pharmacy
TYPE: #Revised
DATE: February 24, 1997
#By vote of the Oversight Subcommittee on February 24, 1997.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
All funds # $0 $0 $0
Insurance
Dedicated $14,250 to $28,500 $0 $0
Total Estimated
Net Effect on All
State Funds $14,250 to $28,500 $0 $0
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
None
Total Estimated
Net Effect on All
Federal Funds $0 $0 $0
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Local Government# $0 $0 $0
FISCAL ANALYSIS
ASSUMPTION
Officials from the Department of Conservation, the Department of Health, the
Department of Social Services, the Department of Mental Health, the Office of
Administration, the Department of Public Safety - Missouri State Highway
Patrol, and the Department of Corrections assume this proposal would not
fiscally impact their agencies.
The Department of Insurance (INS) states that approximately 250 health
insurers and 35 HMOs have policies filed with INS. Each insurer may submit
one or two policy form amendments (one for individual and one for group or
one filing for both) to comply with the requirements of this proposal. The
result would be a range of 285 to 570 new policy filings needed to comply
with this proposal. Form filings are to be accompanied with a $50 filing
fee. Based on the estimated range of new policy filings, $14,250 to $28,500
in new revenue would be generated for the Insurance Dedicated Fund in the
first fiscal year only. INS further states that the passage of more than one
similar proposal could require the INS to request increased appropriations to
cover cumulative administrative costs.
Officials from the Department of Transportation (DHT) assume this proposal
would have a minimal impact on the Highway and Patrol Medical Plan but the
amount is undeterminable without knowing the actuarial affect of this
additional coverage.
Missouri Consolidated Health Care Plan (HCP) officials state this proposal
would permit broader use of prescription drugs in Missouri, specifically for
conditions and treatment for which the drug was not originally approved or
intended. This change would add cost to HCP's contracted health plans which
would be passed along to HCP as premium increases. HCP states that it is
difficult to determine the exact impact of this proposal but any negative
impact upon the already large pharmacy costs of the health plans could result
in significant cost increases to HCP. Currently, more than twenty percent of
all medical plan costs are generated by pharmacy expenses. Based upon the
state's $88.2 million annual contribution to employee medical benefits the
pharmacy component is $17,640,000 annually. These costs would increase along
with the costs of related services. It would not be unexpected to see a one
to two percent increase in overall claims producing additional costs of
$882,000 to $1,764,000 annually and increase six percent annually. In
addition, HCP estimates an annual increase in cost to local governments that
participate in the HCP Plan of $170,012 and increase six percent annually.
#As directed by the Oversight Subcommittee on February 24, 1997, the fiscal
impact for the costs of the Missouri Consolidated Health Care Plan has been
reduced to $0.
FISCAL IMPACT - State Government FY 1998 FY 1999 FY 2000
(10 Mo.)
INSURANCE DEDICATED FUND
Income - Department of Insurance
Filings fees $14,250 to $28,500 $0 $0
ESTIMATED NET EFFECT ON
INSURANCE DEDICATED FUND $14,250 TO $28,500 $0 $0
FISCAL IMPACT - Local Government FY 1998 FY 1999 FY 2000
(10 Mo.)
# $0 $0 $0
FISCAL IMPACT - Small Business
Small businesses would be expected to be fiscally impacted to the extent that
they would incur insurance premium increases and additional administrative
costs due to the requirements of this proposal.
DESCRIPTION
This proposal would require health benefit plans with drug coverage to pay
for prescribed drugs approved by the federal Food and Drug Administration and
recognized in medical literature as a treatment.
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 Insurance
Missouri Consolidated Health Care Plan
Department of Corrections
Department of Conservation
Office of Administration
Department of Transportation
Department of Public Safety
Missouri State Highway Patrol
Department of Health
Department of Mental Health
Department of Social Services
This Fiscal Note is not an official copy and should not be quoted or cited.