LRB-4204/1
PJK:kmg:jf
2003 - 2004 LEGISLATURE
February 16, 2004 - Introduced by Representative J. Lehman, cosponsored by
Senator Hansen. Referred to Committee on Insurance.
AB839,1,4 1An Act to amend 632.89 (2) (b) 1., 632.89 (2) (c) 2. b., 632.89 (2) (d) 2. and 632.89
2(2) (dm) 2.; and to create 632.89 (1) (am) and 632.89 (2) (f) of the statutes;
3relating to: increasing the limits for insurance coverage of nervous or mental
4health disorders or alcoholism or other drug abuse problems.
Analysis by the Legislative Reference Bureau
Under current law, a group health insurance policy (called a "disability
insurance policy" in the statutes) that provides coverage of any inpatient hospital
services must cover those services for the treatment of nervous and mental disorders
and alcoholism and other drug abuse problems in the minimum amount of the lesser
of: 1) the expenses of 30 days of inpatient services; or 2) $7,000 minus the applicable
cost sharing under the policy or, if there is no cost sharing under the policy, $6,300
in equivalent benefits measured in services rendered. If a group health insurance
policy provides coverage of any outpatient hospital services, it must cover those
services for the treatment of nervous and mental disorders and alcoholism and other
drug abuse problems in the minimum amount of $2,000 minus the applicable cost
sharing under the policy or, if there is no cost sharing under the policy, $1,800 in
equivalent benefits measured in services rendered. If a group health insurance
policy provides coverage of any inpatient or outpatient hospital services, it must
cover the cost of transitional treatment arrangements (services, specified by rule by
the commissioner of insurance, that are provided in a less restrictive manner than
inpatient services but in a more intensive manner than outpatient services) for the
treatment of nervous and mental disorders and alcoholism and other drug abuse

problems in the minimum amount of $3,000 minus the applicable cost sharing under
the policy or, if there is no cost sharing under the policy, $2,700 in equivalent benefits
measured in services rendered. If a group health insurance policy provides coverage
for both inpatient and outpatient hospital services, the total coverage for all types
of treatment for nervous and mental disorders and alcoholism and other drug abuse
problems is not required to exceed $7,000, or the equivalent benefits measured in
services rendered, in a policy year.
This bill changes the minimum amount of coverage that must be provided for
the treatment of nervous and mental disorders and alcoholism and other drug abuse
problems on the basis of the change in the consumer price index for medical services
since the coverage amounts in current law were enacted. Inpatient services must be
covered in the minimum amount of the lesser of: 1) the expenses of 30 days of
inpatient services; or 2) $16,800 minus the applicable cost sharing or, if there is no
cost sharing under the policy, $15,100 in equivalent benefits measured in services
rendered. Outpatient services must be covered in the minimum amount of $3,100
minus the applicable cost sharing or, if there is no cost sharing under the policy,
$2,800 in equivalent benefits measured in services rendered. Transitional treatment
arrangements must be covered in the minimum amount of $4,600 minus the
applicable cost sharing or, if there is no cost sharing under the policy, $4,100 in
equivalent benefits measured in services rendered. The total coverage for all types
of treatment for nervous and mental disorders and alcoholism and other drug abuse
problems is not required to exceed $16,800, or the equivalent benefits measured in
services rendered, in a policy year.
The table below provides information on treatment category, current minimum
coverage amount, year of enactment, and the proposed coverage amounts based on
the increase in the federal cost-of-living for medical coverage "indexed" since the
enactment of the current coverage amounts. - See PDF for table PDF - See PDF for table PDF
The bill also requires the Department of Health and Family Services to
annually report to the governor and legislature on the change in coverage limits

necessary to conform with the change in the federal consumer price index for medical
costs.
For further information see the state and local fiscal estimate, which will be
printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB839, s. 1 1Section 1. 632.89 (1) (am) of the statutes is created to read:
AB839,3,32 632.89 (1) (am) "Consumer price index" means the consumer price index for all
3urban consumers, U.S. city average, as determined by the U.S. department of labor.
AB839, s. 2 4Section 2. 632.89 (2) (b) 1. of the statutes is amended to read:
AB839,3,105 632.89 (2) (b) 1. Except as provided in subd. 2., if a group or blanket disability
6insurance policy issued by an insurer provides coverage of inpatient hospital
7treatment or outpatient treatment or both, the policy shall provide coverage in every
8policy year as provided in pars. (c) to (dm), as appropriate, except that the total
9coverage under the policy for a policy year need not exceed $7,000 $16,800 or the
10equivalent benefits measured in services rendered.
AB839, s. 3 11Section 3. 632.89 (2) (c) 2. b. of the statutes is amended to read:
AB839,3,1612 632.89 (2) (c) 2. b. Seven thousand Sixteen thousand eight hundred dollars
13minus any applicable cost sharing at the level charged under the policy for inpatient
14hospital services or the equivalent benefits measured in services rendered or, if the
15policy does not use cost sharing, $6,300 $15,100 in equivalent benefits measured in
16services rendered.
AB839, s. 4 17Section 4. 632.89 (2) (d) 2. of the statutes is amended to read:
AB839,4,218 632.89 (2) (d) 2. Except as provided in par. (b), a policy under subd. 1. shall
19provide coverage in every policy year for not less than $2,000 $3,100 minus any
20applicable cost sharing at the level charged under the policy for outpatient services

1or the equivalent benefits measured in services rendered or, if the policy does not use
2cost sharing, $1,800 $2,800 in equivalent benefits measured in services rendered.
AB839, s. 5 3Section 5. 632.89 (2) (dm) 2. of the statutes is amended to read:
AB839,4,94 632.89 (2) (dm) 2. Except as provided in par. (b), a policy under subd. 1. shall
5provide coverage in every policy year for not less than $3,000 $4,600 minus any
6applicable cost sharing at the level charged under the policy for transitional
7treatment arrangements or the equivalent benefits measured in services rendered
8or, if the policy does not use cost sharing, $2,700 $4,100 in equivalent benefits
9measured in services rendered.
AB839, s. 6 10Section 6. 632.89 (2) (f) of the statutes is created to read:
AB839,4,1411 632.89 (2) (f) Report on coverage limits. The department of health and family
12services shall report annually to the governor and the legislature on revising the
13coverage limits specified in this subsection based on the change in the consumer price
14index for medical costs.
AB839, s. 7 15Section 7. Initial applicability.
AB839,4,1716 (1) This act first applies to a policy issued, renewed, or modified on the first day
17of the 13th month beginning after publication.
AB839,4,1818 (End)
Loading...
Loading...