LEGISLATIVE FISCAL ESTIMATE

[First Reprint]

SENATE, No. 1439

STATE OF NEW JERSEY

221st LEGISLATURE

 

DATED: JUNE 28, 2024

 

 

SUMMARY

 

Synopsis:

Requires health benefits coverage for additional orthotic and prosthetic appliances under certain circumstances; requires coverage for orthotic and prosthetic appliances obtained through podiatrists.

Type of Impact:

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

Agencies Affected:

Division of Pensions and Benefits in the Department of the Treasury; certain local government units.

 

 

Office of Legislative Services Estimate

Fiscal Impact

 

Annual 

 

 

State Expenditure Increase

 

$171,000 to $215,000

 

 

Local Expenditure Increase

 

$290,000 to $363,000

 

 

Total Expenditure Increase

 

$461,000 to $577,000

 

 

 

 

 

·         The Office of Legislative Services (OLS) estimates that requiring health benefits coverage for an additional orthotic or prosthetic applicant under certain circumstances will result in a total annual increase of $461,000 to $577,000 in State and local government unit expenditures for the State Health Benefits Program and the School Employees’ Health Benefits Program.

·         A report by the New Jersey Mandated Health Benefits Advisory Commission prior to the passage of the State’s initial mandate for health benefits coverage for orthotic and prosthetic appliances found that health care premiums for the fully insured group insurance and individual insurance markets were likely to increase by 0.025 percent due to the mandate.  A subsequent analysis for a related, but limited mandate in Maine suggested that expanding coverage for prosthetics for devices necessary for recreational activities would increase premiums by up to 0.02 percent.

·         The OLS does not know the actual number of covered individuals whose physicians will determine that an additional prosthetic appliance is medically necessary to engage in physical recreational activities, but assumes for the purpose of the analysis that half of all covered individuals granted prosthetic devices for medical necessity under current law could be approved for an additional prosthetic device for recreational use.

 

 

BILL DESCRIPTION

 

      This bill requires health benefits coverage for an additional orthotic or prosthetic device from a licensed specialist if the covered person’s physician determines that an additional appliance is necessary for physical and recreational activities.  This bill also requires health benefits coverage for an orthotic or prosthetic device from a licensed podiatrist if the covered person’s physician determines that an appliance is medically necessary.

      Current law requires health benefits coverage for one orthotic or prosthetic device from a licensed specialist per covered person if the covered person’s physician determines that the appliance is medically necessary.

      By law, the reimbursement rate for orthotic and prosthetic appliances is the same as the reimbursement rate for such appliances under the federal Medicare reimbursement schedule.

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS estimates that requiring health benefits coverage for an additional orthotic or prosthetic applicant under certain circumstances will result in a total annual increase of $461,000 to $577,000 in State and local government unit expenditures for the State Health Benefits Program and the School Employees’ Health Benefits Program.

      The OLS does not know the actual number of covered individuals whose physicians will determine that an additional prosthetic appliance is medically necessary to engage in physical recreational activities, but assumes for the purpose of this analysis that half of all covered individuals granted prosthetic devices for medical necessity under current law could be approved for an additional prosthetic device for recreational use.

      A report by the New Jersey Mandated Health Benefits Advisory Commission prior to the passage of the State’s initial mandate for health benefits coverage for orthotic and prosthetic appliances found that health care premiums for the fully insured group insurance and individual insurance markets were likely to increase by 0.025 percent. Under current law, the State Health Benefits Program and the School Employees’ Health Benefits program are included in the State mandate.

      Based on data from the Plan Year 2024 Rate Setting Analyses, a 0.01 percent increase in projected costs for incurred medical claims would result in expenditure increases of approximately $215,000 for the State portion of the State Health Benefits Program, $156,000 for the local portion of the State Health Benefits Program, and $208,000 for the School Employees’ Health Benefits Program for Plan Year 2024 before cost-sharing.

Section:

State Government

Analyst:

Camryn Mathews

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.).