NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.



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F I S C A L I M P A C T R E P O R T





SPONSOR: Gorham DATE TYPED: 03/04/01 HB
SHORT TITLE: Catastrophic Health Insurance SB 478/aSPAC
ANALYST: Wilson


APPROPRIATION



Appropriation Contained
Estimated Additional Impact
Recurring

or Non-Rec

Fund

Affected

FY01 FY02 FY01 FY02
NFI



(Parenthesis ( ) Indicate Expenditure Decreases)



SOURCES OF INFORMATION



Health Policy Commission (HPC)

Public Regulatory Commission (PRC)

General Services Department (GSD)

Attorney General's Office (AG)



SUMMARY



Synopsis of SPAC Amendment



SB 478/aSPAC (Senate Public Affairs Committee) changes the word "catastrophic" to "basic" when referring to the health insurance policies that the bill allows insurers to sell to individuals and small employer groups. The new word more accurately reflects the nature of the policies under consideration in SB 478.



Synopsis of Original Bill



SB 478 amends the insurance code to permit the sale of a catastrophic plan to individuals and small employer groups. This catastrophic plan would not offer certain mandated benefits and would have at least a $600 individual calendar year deductible ($1200 per family).



Significant Issues



The intent of the bill is to provide a lower cost health insurance option for individuals and small employers.



The PRC notes that proponents believe that mandated benefits unnecessarily increase the cost of health insurance to individuals and small employers. Those who oppose this legislation believe this plan's stripped down benefits will leave insureds without necessary coverage in certain key areas.



ADMINISTRATIVE IMPLICATIONS



The PRC does not need additional FTEs to process the filings that may result from the provision of SB 478.



CONFLICT/DUPLICATION/COMPANIONSHIP/RELATIONSHIP



Relates to:



HB 275, Small Employer Catastrophic Group Health

SB 209, Self-insured Health Care Act



OTHER SUBSTANTIVE ISSUES



The HPC has provided the following:



There may also be a tendency to transfer these services and associated costs to government, for example: immunizations through public health offices, PAP smears and mammograms through the Department of Health breast and cervical cancer screening program.



DW/ar