Colorado Legislative Council Staff
NO FISCAL IMPACT
January 28, 1998
Will Meyer (866-4976)
TITLE: CONCERNING THE TERMS OF MANDATORY HEALTH CARE COVERAGE PROVISIONS FOR NEWBORN CHILDREN AND MATERNITY, AND, IN CONNECTION THEREWITH, REQUIRING THAT SUCH COVERAGES INCLUDE A MINIMUM LENGTH OF A HOSPITAL STAY AFTER CHILDBIRTH.
Summary of Assessment
The provisions of this bill require health care policies that are regulated by the Division of Insurance, Department of Regulatory Agencies, under Title 10, C.R.S., to provide mandatory coverage for newborn children and maternity for a 48-hour hospital stay following a normal childbirth delivery and a 96-hour hospital stay following a cesarean section delivery. It would also require health care policies to provide coverage, if the 48-hour or the 96-hour period ends after 8 p.m., until 8 a.m. the following morning. The bill would become effective upon signature of the Governor.
Current Practice. Since 1996, a majority of health care policies have provided coverage equal to the requirements of this bill, as the result of an informal agreement reached between the regulated health care providers reached nearly two years ago. Additionally, on September 26, 1996, Public Law 105-41, “The Newborns’ and Mothers’ Health Protection Act of 1996” (NMHPA) was signed into law by the federal government requiring health care policies to provide 48-hour and 96-hour coverages, effective January 1, 1998. This bill would provide the Division of Insurance with the authority to enforce these provisions.
Background. The provisions of this bill would affect health care coverages provided by health insurance carriers and HMO’s, but not self-funded health care plans. Self-funded health plans currently cover more than 40 percent of the state’s work force (both private and public), and more than 60 percent of state employees. Consequently, the provisions of this bill would not apply to a large percentage of the state’s workforce. In the case of the state, the provisions of the bill would apply only to HMO contract costs and any increases in these costs would be reflected in premiums paid by participating state employees.
However, it is the policy of the state’s self-insurance plan to follow health insurance mandates, as a matter of good public policy. To the extent that the state were to change the self-funded plan’s coverage, cost to the state’s self-funded plan would increase and these increased costs would be reflected in premiums paid by participating employees. Over time, these costs would be incorporated in the annual Total Compensation Survey. Any recommended increases to maintain parity with the private sector would impact the costs to the state. The provisions of this bill have already been incorporated into the state’s benefit plans.
Department of Regulatory Agencies. Given the level of compliance resulting from the informal agreement, the Division of Insurance does not expect any significant impact to their current workload. This bill would have no fiscal impact to the Division of Insurance.
Department of Personnel. The State Benefits Fund, which is used to provide medical health care coverage for state employees, is administered by the Department of Personnel. The fund consists of both state contributions and employee premiums. The state contribution amount is limited by statute. Consequently, any changes in health care coverages, or changes to contracts with HMO’s or other providers that affect the fund balance must be covered by corresponding changes to the premiums charged to state employees, unless the state’s contribution is amended by legislation. The bill would not affect the state’s contribution. This bill would nave no fiscal impact to the Department of Personnel.
Department of Health Care Policy and Financing. The coverages required by this bill are required under the provisions of federal legislation, Public Law 105-04, effective January 1, 1998. While any changes in health care coverages tend to result in a “procedural creep” resulting in increased Medicaid costs, it is believed that any cost increases resulting from the provisions in this bill would be largely due to the change in federal law. This bill would have an insignificant impact on the cost to the state to provide Medicaid benefits.
The provisions of this bill would not impact any other agency of the state, or unit of local government. Therefore, this bill is assessed as having no fiscal impact.
Regulatory Agencies Health Care Policy and Financing Personnel