LEGISLATIVE FISCAL ESTIMATE

[First Reprint]

SENATE, No. 2535

STATE OF NEW JERSEY

220th LEGISLATURE

 

DATED: DECEMBER 19, 2023

 

 

SUMMARY

 

Synopsis:

Requires health benefits coverage of hearing aids and cochlear implants for insureds aged 21 or younger.

Type of Impact:

Annual expenditure increase to the State General Fund and local government funds.

Agencies Affected:

Department of the Treasury, Division of Pensions and Benefits; local government entities.

 

 

Office of Legislative Services Estimate

Fiscal Impact

 

Annual 

 

 

State Cost Increase

 

$56,234 to $741,652

 

 

Local Cost Increase

 

$80,266 to $1,058,600

 

 

Total Cost Increase

 

$136,500 to $1,800,252

 

 

 

 

 

·         The Office of Legislative Services (OLS) estimates that providing health benefits coverage for hearing aids and cochlear implants for 16 to 21 year olds would result in an annual State expenditure increase ranging from $0.1 million to $0.7 million and an annual local expenditure increase ranging from $0.1 million to $1.1 million.  The OLS anticipates the costs would likely fall toward the lower end of the range.

 

·         The bill permits a limit on the benefits provided to one hearing aid for each hearing-impaired ear every 24 months.  The OLS notes that if the State Health Benefits Commission and School Employees’ Health Benefits Commission choose the limit the health benefits, the cost will be lower.  The OLS is not able to predict the benefit limitations that will be adopted.

 

 

BILL DESCRIPTION

 

      This legislation requires government healthcare plans and private sector health insurers in New Jersey to provide health benefits coverage for the purchase of medically necessary hearing aids and cochlear implants to covered persons aged 21 and younger.  The bill permits insurers, including the State Health Benefits Commission, the School Employees’ Health Benefits Commission, and NJ FamilyCare, to limit the benefit provided per hearing aid for each hearing-impaired ear every 24 months.  Current law requires government healthcare plans and private sector health insurers in New Jersey to provide health benefits coverage for the purchase of medically necessary hearing aids and cochlear implants to covered persons aged 15 and younger.

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS estimates that providing health benefits coverage for hearing aids and cochlear implants for 16 to 21 year olds would result in an annual State expenditure increase ranging from $0.1 million to $0.7 million and an annual local expenditure increase ranging from $0.1 million to $1.1 million.

      Using available information from the State Health Benefits Program and the School Employees’ Health Benefits Program, the OLS estimates there will be 57,024 newly eligible dependents under the bill.  Further, the analysis assumes a severe hearing loss incident rate of two hearing aids per 1,000 children, based on information from the federal Centers for Disease Control and Prevention.  For the estimated cost of the hearing aids, the OLS accessed information on the Blue365 insurance price for the low end of the cost estimate range, and information on the manufacturer’s suggested retail price for the high end of the cost estimate range.

      The following table illustrates the assumptions and the estimated fiscal impact.

 

 

      The OLS assumes that many of the hearing aids will be purchased at the discounted insurance price, and therefore anticipates the costs would likely fall toward the lower end of the range.

      The bill permits a limit on the benefits provided to one hearing aid for each hearing-impaired ear every 24 months.  The OLS notes that if the State Health Benefits Commission and School Employees’ Health Benefits Commission choose the limit the health benefits, the cost will be lower.  The OLS is not able to predict the benefit limitations that will be adopted.

 

Section:

State Government

Analyst:

Anna Harris

Assistant Fiscal Analyst

Approved:

Thomas Koenig

Legislative Budget and Finance Officer

 

 

This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.

 

This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).