LEGISLATIVE FISCAL ESTIMATE

ASSEMBLY, No. 1821

STATE OF NEW JERSEY

222nd LEGISLATURE

 

DATED: JUNE 23, 2026

 

 

SUMMARY

 

Synopsis:

Prohibits health insurance carriers from denying coverage of nonopioid prescription drugs in favor of opioid prescription drugs.

Type of Impact:

Potential annual State expenditure and revenue increases; potential annual local government expenditure increases.

Agencies Affected:

Department of Human Services; Division of Pensions and Benefits in the Department of the Treasury; certain local governments and school districts.

 

 

Office of Legislative Services Estimate

Annual Fiscal Impact

 

 

 

 

Potential State Expenditure Increase

 

Indeterminate

 

 

Potential State Revenue Increase

 

Indeterminate

 

 

Potential Local Expenditure Increase

 

Indeterminate

 

 

 

·         The Office of Legislative Services (OLS) finds that prohibiting health insurance carriers from denying coverage of nonopioid prescription drugs in favor of opioid prescription drugs may result in potential indeterminate annual cost increases to the State and participating local governments and school districts in relation to the State Health Benefits Program and the School Employees’ Health Benefits Program, to the extent that the programs currently implement utilization control policies that favor less-expensive opioid drugs over more-expensive nonopioid drug equivalents.

·         This prohibition may also result in indeterminate annual cost increases to the State Medicaid Program to the extent that the program currently implements utilization control policies that favor less-expensive opioid drugs over more-expensive nonopioid drug equivalents.

·         Any increase in State expenditures under NJ FamilyCare would concomitantly grow annual State revenues by an indeterminate amount in the form of federal Medicaid cost reimbursements.

BILL DESCRIPTION

 

      This bill makes it unlawful when a licensed health care provider prescribes a nonopioid medication to a person covered by a health insurance carrier for the treatment of acute pain and the carrier denies coverage of a nonopioid prescription drug: (1) in favor of an opioid prescription drug; or (2) to require a covered person to try an opioid prescription drug prior to approving the use of a nonopioid prescription drug. “Carrier” is defined in the bill to mean an insurance company, health service corporation, hospital service corporation, medical service corporation, or health maintenance organization authorized to issue health benefits plans in this State.

      Under the bill, a carrier that establishes and maintains a drug formulary is to ensure that a nonopioid drug approved by the United States Food and Drug Administration for the treatment or management of pain will not be disadvantaged or discouraged, with respect to coverage or cost-sharing, relative to any opioid or narcotic drug for the treatment or management of pain on the formulary of the carrier under various circumstances. It is not prohibited in the bill for an opioid drug to be preferred over another opioid drug or for a nonopioid drug to be preferred over another nonopioid drug.

      The provisions of the bill prohibiting denial of a nonopioid prescription drug are also incorporated into the laws governing the required coverage for contracts negotiated by the State Health Benefits Commission and the School Employees’ Health Benefits Commission and in the law overseeing Medicaid.

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

        None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS finds that prohibiting health insurance carriers from denying coverage of nonopioid prescription drugs in favor of opioid prescription drugs may result in potential indeterminate annual cost increases to the State and participating local governments and school districts in relation to the State Health Benefits Program and the School Employees’ Health Benefits Program, to the extent that the programs currently implement utilization control policies that favor less-expensive opioid drugs over more-expensive nonopioid drug equivalents.  This would also apply to the State Medicaid Program.

      Any increase in State expenditures under NJ FamilyCare would concomitantly grow annual State revenues by an indeterminate amount in the form of federal Medicaid cost reimbursements.

 

Section:

State Government

Analyst:

Anna Harris

Associate 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.).