LEGISLATIVE FISCAL ESTIMATE
ASSEMBLY, No. 5459
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: MARCH 27, 2025
SUMMARY
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Synopsis: |
Extends time period in which to enroll newborn infant in health benefits coverage. |
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Type of Impact: |
Potential annual net decrease in State expenditures and revenues. |
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Agencies Affected: |
Department of Banking and Insurance; Department of Human Services; Department of Health. |
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Office of Legislative Services Estimate |
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Fiscal Impact |
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Annual |
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Potential Net State Expenditure Decrease |
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Indeterminate |
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Potential Net State Revenue Decrease |
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Indeterminate |
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· The Office of Legislative Services (OLS) estimates that extending the time period in which to enroll newborn infants in health coverage as a dependent may potentially result in some costs shifting to private insurance that would otherwise be borne by the State’s Medicaid program, NJ FamilyCare.
· The OLS does not have access to data on the number of newly born children likely to be affected by the bill, and cannot anticipate the cost or quantity of medical services that might be shifted from the State to private payers.
· Any decrease in NJ FamilyCare expenditures will also decrease State revenues, in the form of federal reimbursements for State expenditures under the federal Medicaid program and the Children’s Health Insurance Program.
BILL DESCRIPTION
This bill extends the time period in which newly born children are covered under their parents’ health benefits coverage to 90 days after birth.
Current law limits the coverage of newly born children to 60 days from their date of birth, meaning that at the conclusion of the 60 days, parents must enroll the newly born child as a dependent in a private health benefits coverage policy or in a State or federal program, such as NJ FamilyCare. If the parents do not enroll their newly born child as a dependent at the conclusion of the 60 days, the newly born child will lose health benefits coverage. This bill extends the period of time for children to be covered under the parents’ health benefits coverage by 30 days.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS assumes that this bill may decrease expenditures for State-funded health care programs, and may also decrease State revenues associated with those programs, by an indeterminate amount. The OLS is not able to estimate the magnitude of this impact with reasonable certainty, due to a lack of sufficient data.
Under the bill, State expenditure decreases may be achieved by shifting some State costs related to the coverage of health care services provided to newborns to private health insurance plans, which would otherwise have been paid for by State-funded programs, such as NJ FamilyCare, administered by the Department of Human Services. To the extent that a newly born child is eligible for NJ FamilyCare and has access to a private health insurance plan affected by this bill, the provisions of the bill may decrease NJ FamilyCare expenditures by an indeterminate amount, but only if the newly born child is enrolled in the private insurance under the extended timeframe allowed by the bill instead of exclusively enrolling in NJ FamilyCare once the enrollment period for the private health insurance has closed. Any decrease in NJ FamilyCare expenditures will also decrease State revenues, in the form of federal reimbursements for State expenditures under the federal Medicaid program and the Children’s Health Insurance Program.
Other programs that may potentially be affected include the Early Intervention System, administered by the Department of Health. Data is not available on the spending in these programs related to care for newborns, and that spending would not necessarily be replaced by private insurance if the bill is enacted.
The OLS notes that this bill would apply only to private health insurance policies regulated by the Department of Banking and Insurance, which do not track data on the number of births covered under these policies. The OLS notes that, according to a report by the New Jersey Pregnancy Risk Assessment Monitoring System, approximately 58 percent of women who had a live birth from 2021 to 2022 were covered by private insurance; 39 percent were covered by NJ FamilyCare (Medicaid); and three percent were uninsured at the time of birth. The OLS also notes that only a subset of privately insured individuals would be affected by the bill, as the bill would not apply to self-insured health coverage plans or government employee or retiree health benefits plans. Approximately 102,000 births occur in New Jersey annually.
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Section: |
State Government |
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Analyst: |
Assistant Fiscal Analyst |
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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.).