Revision: Jan. 25, 2017, 1:42 p.m.
HB 638-FN-LOCAL - AS INTRODUCED
2017 SESSION
17-0711
01/03
HOUSE BILL 638-FN-LOCAL
AN ACT repealing the New Hampshire health protection program.
SPONSORS: Rep. Hoell, Merr. 23; Rep. Itse, Rock. 10
COMMITTEE: Health, Human Services and Elderly Affairs
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This bill repeals the New Hampshire health protection program.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
17-0711
01/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Seventeen
AN ACT repealing the New Hampshire health protection program.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Insurance Premium Tax; New Hampshire Health Protection Program. Amend RSA 400-A:32, III to read as follows:
III.[(a) Except as provided in subparagraph (b),] The taxes imposed in paragraphs I and II of this section shall be promptly forwarded by the commissioner to the state treasurer for deposit to the general fund.
[(b) Taxes imposed attributable to premiums written for medical and other medical related services for the newly eligible Medicaid population as provided for under RSA 126-A:5, XXIV-XXVI shall be deposited into the New Hampshire health protection trust fund, established in RSA 126-A:5-b. The commissioner shall notify the state treasurer of sums for deposit into the New Hampshire health protection trust fund no later than 30 days after receipt of said taxes. ]
2 Individual Health Insurance Market; Purpose. Amend RSA 404-G:1, II to read as follows:
II. Create a nonprofit, voluntary organization to facilitate the availability of affordable individual nongroup health insurance by establishing an assessment mechanism and an individual health insurance market mandatory risk sharing plan as a mechanism to distribute the risks associated within the individual nongroup market [and to support the marketplace premium assistance program established in RSA 126-A:5, XXV].
3 Individual Health Insurance Markdt; Definitions. Amend RSA 404-G:2, X-a to read as follows:
X-a. "Plan of operation'' means the plan of operation of the risk sharing mechanism, the high risk pool, [support for the program established in RSA 126-A:5, XXV,] and the federally qualified high risk pool, including articles, bylaws and operating rules, procedures and policies adopted by the association.
4 Individual Health Insurance Market; Plan of Operation. Amend RSA 404-G:5-a, IV(b) through IV(d) to read as follows:
(b) Established no later than November 1 in the year preceding the calendar year for which the carrier's experience shall be used to calculate the assessment; and
(c) Anticipated to be sufficient to meet the high risk pool's funding needs [and the association's share of the costs of the program, as defined in subparagraph (d); and
(d) For the period of January 1, 2017 through December 31, 2018, an amount not to exceed 50 percent of the remainder amount, as defined in RSA 126-A:5-c, I(b), less the amount made available to the program pursuant to RSA 404-G:11, VI. The association shall transfer all amounts collected pursuant to this subparagraph and the amount made available to the program pursuant to RSA 404-G:11, VI to the New Hampshire health protection trust fund, established pursuant to RSA 126-A:5-b].
5 Individual Health Insurance Market; High Risk Pool. Amend RSA 404-G:11, VI to read as follows:
VI. Following the cessation of coverage on December 31, 2013, the association shall take such actions as are necessary and desirable to wind down its affairs under this chapter in accordance with the plan of termination. The association shall retain all of its powers and duties, including, but not limited to, its power to establish and collect regular and special assessments under RSA 404-G:5 and RSA 404-G:5-a, and the immunity provided by RSA 404-G:9 and the bylaws of the association. Any excess funds remaining after the satisfaction of all of the association's liabilities shall be [used for the program and for the association's reasonable costs for collecting its share of the remainder amount] returned to the association's members in proportion to their respective liability for the last regular assessments imposed by the association.
6 Repeal. The following are repealed:
I. RSA 126-A:5, XXIV-XXVI and XXX, relative to the New Hampshire health protection program.
II. RSA 126-A:5-b, relative to the New Hampshire health protection trust fund.
III. RSA 126-A:5-c, relative to funding the state share of the New Hampshire health protection program.
IV. RSA 126-A:5-d, relative to voluntary provider contributions.
V. RSA 126-A:5-e, relative to a commission to evaluate the effectiveness and future of the premium assistance program.
VI. RSA 126-A:67, relative to a statewide demonstration waiver.
VII. RSA 404-G:2, X-c, relative to the definition of program.
VIII. RSA 404-G:11, VI-a relative to a plan for an amendment to continue the New Hampshire health protection program.
IX. RSA 6:12, I(b)(317), relative to moneys deposited in the New Hampshire health protection trust fund.
X. 2014, 3:10, as amended by 2016, 13:13, relative to applicability, eligibility, funding for the New Hampshire health protection program.
I. Section 1 of this act shall take effect July 1, 2017, at 12:01 a.m.
II. The remainder of this act shall take effect upon its passage.
17-0711
1/24/17
HB 638-FN-LOCAL- FISCAL NOTE
as introduced
AN ACT repealing the New Hampshire health protection program.
FISCAL IMPACT: [ X ] State [ ] County [ X ] Local [ ] None
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| Estimated Increase / (Decrease) | |||
STATE: | FY 2018 | FY 2019 | FY 2020 | FY 2021 |
Appropriation | $0 | $0 | $0 | $0 |
Revenue | Indeterminable | Indeterminable | Indeterminable | $0 |
Expenditures | Indeterminable | Indeterminable | $0 | $0 |
Funding Source: | [ X ] General [ ] Education [ ] Highway [ X ] Other (Federal Funds, Charitable Contributions, Insurance Premium Tax, Insurance Provider Assessment) | |||
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LOCAL: |
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Revenue | $0 | $0 | $0 | $0 |
Expenditures | Indeterminable Increase | Indeterminable Increase | $0 | $0 |
METHODOLOGY:
This bill repeals the New Hampshire Health Protection Program (NHHPP). Under current law, the program is effective through December 31, 2018, and is funded primarily with federal funds, supplemented by three state revenue sources: (1) insurance premium tax revenue derived from qualified health plans purchased under the program, (2) voluntary contributions from charitable organizations, and (3) an assessment on insurance providers under RSA 404-G. During calendar year 2017, federal funds will cover 95 percent of program costs, decreasing to 94 percent in calendar year 2018. Costs not covered by the federal government are paid for first with insurance premium tax revenue as noted in (1) above, with the remaining costs split evenly between funding sources (2) and (3). The Department of Health and Human Services projects that should the NHHPP go forward, program and related administrative costs will be as follows: $226.6 million in the final six months of FY 2017, $492.8 million in FY 2018, and $266.4 million in the first six months of FY 2019. These costs will be funded as follows, based on the formula described above. (Note that insurance premium tax revenue does not contribute to the funding formula until July 1, 2017, and so there is no insurance premium tax contribution in FY 2017.)
| FY 2017 | FY 2018 | FY 2019 |
| 1/1/17 - 6/30/17 | 7/1/18 - 12/31/18 | |
Federal Funds | $214,970,063 | $465,408,441 | $250,235,400 |
Insurance Premium Tax Revenue | $0 | $6,000,000 | $6,100,000 |
Voluntary Charitable Contributions | $5,813,343 | $10,698,853 | $5,015,134 |
Insurer Assessment | $5,813,343 | $10,698,853 | $5,015,134 |
Total: | $226,596,749 | $492,806,147 | $266,365,668 |
Should the bill pass, these expenditures and related revenues will be discontinued. The Department further states the NHHPP has resulted in cost avoidance in several areas, and that costs in the affected areas will rise upon the program's termination. Specifically, the Department projects the program's discontinuance will result in increased general fund costs of $7.6 million in the second half of FY 2017, $14.7 million in FY 2018, and $7.1 million in the first half of FY 2019. These costs are related to four areas that will be affected by the program's termination: the breast and cervical cancer program, pregnant women, the Medicaid "spend-down" population, and the inmate population within NH's state prisons. The first three of these areas pertain to populations that would be covered under traditional Medicaid at a federal reimbursement rate of 50 percent, but are covered under the NHHPP at the higher reimbursement rate. The fourth area pertains to the cost of inpatient medical stays for inmates incarcerated in the state's prisons. The Department of Corrections concurs with the Department of Health and Human Services that should the NHHPP be repealed, responsibility for paying for inmate care would revert back to the state general fund. The Department of Corrections notes in FY 2016, these costs were $2,337,594.
The Insurance Department states premium tax revenue will decrease under the bill, since the qualified health plans purchased under the NHHPP will no longer be purchased and hence will no longer be taxed. (The Department of Health and Human Services and the Insurance Department project slightly different revenue amounts attributable to the NHHPP, but both assume approximately $6 million in FY 2018 and $4 million to $6 million in the first half of FY 2019.) The Insurance Department notes if the NHHPP is repealed, insurance premium tax revenue will increase in FY 2020 due to timing issues associated with the way the tax is collected. This increase will occur in FY 2020 only. The Department of Revenue Administration notes that since businesses are able to take a credit against their business profits taxes for insurance premium taxes paid, a reduction in insurance premium tax revenue collected may yield an associated increase in business profits tax revenue.
The New Hampshsire Municipal Association states municipalities have reported a decrease in costs for local welfare assistance as a result of the NHHPP. The Association therefore projects that the bill may result in an indeterminable increase in local expenditures.
AGENCIES CONTACTED:
Departments of Health and Human Services, Insurance, Corrections, Administrative Services, and Revenue Administration, New Hampshire Association of Counties, and New Hampshire Municipal Association