COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION



FISCAL NOTE



L.R. No.: 0394-04

Bill No.: SB 464

Subject: Insurance - Medical

Type: Original

Date: February 28, 2003



FISCAL SUMMARY



ESTIMATED NET EFFECT ON GENERAL REVENUE FUND
FUND AFFECTED FY 2004 FY 2005 FY 2006
General Revenue Unknown Unknown Unknown
Total Estimated

Net Effect on

General Revenue

Fund*

 Unknown Unknown Unknown

*Savings could exceed $100,000



ESTIMATED NET EFFECT ON OTHER STATE FUNDS
FUND AFFECTED FY 2004 FY 2005 FY 2006
Conservation Commission Insurance Plan Unknown Unknown Unknown
Missouri Highway and Transportation Commission - Highway and Patrol Health Plan Unknown Unknown Unknown
Total Estimated

Net Effect on Other

State Funds*

 Unknown Unknown Unknown

*Savings could exceed $100,000



Numbers within parentheses: ( ) indicate costs or losses.

This fiscal note contains 5 pages.



ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 2004 FY 2005 FY 2006
Total Estimated

Net Effect on All

Federal Funds

 $0 $0 $0



ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 2004 FY 2005 FY 2006
Local Government* Unknown Unknown Unknown

*Savings could exceed $100,000



FISCAL ANALYSIS



ASSUMPTION



Officials from the Department of Insurance indicated there would be no fiscal impact to their agency resulting from this proposal.



Officials from the Department of Conservation (MDC) stated that this proposed legislation could have a positive impact on MDC's self-insured health plan; however, the amount of impact is unknown.



Officials from the Department of Transportation (MoDOT) stated that the Highway and Patrol Medical Plan has a reimbursement policy, which allows the MoDOT/MSHP Medical Plan (Plan) to recover medical claims expense from the subscriber/participant whenever the subscriber/participant receives payments for physical or mental treatment from individuals, insurance companies, settlements, or court verdicts. Any reimbursement shall not exceed the amount actually paid by the Plan. Subrogation would also allow the Missouri Highway and Transportation Commission (MHTC) and the Plan to file a lawsuit against the third party, without including the subscriber/participant in the suit, for the difference in the reimbursement received and the costs of the medical claims paid by the plan. There may be fiscal impact to the MHTC for intangible costs for litigation. This cost cannot be determined. There may be a positive fiscal impact to the medical plan, but this cost cannot be determined.



ASSUMPTION (continued)



Officials from Missouri Consolidated Health Care Plan (MCHCP) stated that events that may result in subrogated claims are unpredictable so it is difficult to forecast the potential savings this proposal may yield. In a February, 2000 study, using the InterStudy National HMO Financial Database, the subrogation/coordination of benefits rate for 1997 was $1.38. Employing this rate results in a 2004 MCHCP potential savings of $492,193 when applied to MCHCP's current 29,720 self-insured membership. MCHCP noted that this is a rough estimate and the $1.38 figure is several years old and could be higher now. It is also noted, however, that figure refers to subrogation and coordination of benefits while the proposal only refers to subrogation.



Oversight assumes some cost savings could be passed on to the State, but is unable to determine that amount. Oversight also assumes other public entities could experience cost savings.



FISCAL IMPACT - State Government FY 2004

(10 Mo.)

 FY 2005 FY 2006
GENERAL REVENUE
Savings - Reduction in cost of benefits Unknown Unknown Unknown
ESTIMATED NET EFFECT ON GENERAL REVENUE*



Unknown

Unknown

Unknown
CONSERVATION COMMISSION INSURANCE PLAN
Savings - Health benefit reimbursements from third party tortfeasors

Unknown

Unknown

Unknown
ESTIMATED NET EFFECT ON CONSERVATION COMMISSION INSURANCE PLAN*



Unknown



Unknown



Unknown
MISSOURI HIGHWAY AND TRANSPORTATION COMMISSION (MHTC) - HIGHWAY AND PATROL MEDICAL PLAN FY 2004 (10 Mo.) FY 2005



FY 2006





Savings - Health benefit reimbursements from third party tortfeasors



Unknown



Unknown



Unknown
ESTIMATED NET EFFECT ON MHTC - HIGHWAY AND PATROL MEDICAL PLAN*



Unknown



Unknown



Unknown

*Savings could exceed $100,000



FISCAL IMPACT - Local Government FY 2004

(10 Mo.)

 FY 2005 FY 2006
LOCAL PUBLIC ENTITIES



Savings - Health benefit reimbursements from third party tortfeasors



Unknown



Unknown



Unknown
ESTIMATED NET EFFECT ON LOCAL PUBLIC ENTITIES*

Unknown

Unknown

Unknown

*Savings could exceed $100,000



FISCAL IMPACT - Small Business



Small businesses that are self-insured could have a positive fiscal impact as a result of this proposal.



DESCRIPTION



This proposal allows public entities which provide health insurance coverage to their employees through a self-insured plan to file a subrogation claim or otherwise seek reimbursement from a third party tortfeasor.



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 Conservation

Department of Transportation







Mickey Wilson, CPA

Director

February 28, 2003