LRB-4222/2
PJK:kmg:pg
2003 - 2004 LEGISLATURE
February 13, 2004 - Introduced by Senators Roessler and Schultz, cosponsored
by Representatives Underheim, Gielow, Hahn, Townsend, Bies, Miller,
Albers, Johnsrud, Balow, Van Roy, Seratti and McCormick. Referred to
Committee on Health, Children, Families, Aging and Long Term Care.
SB466,2,6
1An Act to repeal 149.14 (3) (a) to (r), 149.14 (4), 149.14 (4c), 149.15 (3) (c), 149.15
2(3) (f), 149.15 (5) and 149.16;
to renumber 149.143 (1) (bm) 1. and 149.143 (1)
3(bm) 2.;
to renumber and amend 149.14 (3) (intro.);
to amend 25.55 (3),
449.475 (2) (a) (intro.), 149.10 (3), 149.11, 149.115, 149.12 (1) (a), 149.12 (1) (am),
5149.12 (1) (b), 149.12 (1) (c), 149.12 (3) (c), 149.13 (1), 149.13 (3), 149.13 (4),
6149.14 (5) (d), 149.14 (5) (e), 149.14 (5m) (c), 149.14 (7) (b) and (c), 149.14 (8),
7149.142 (1), 149.143 (1) (intro.), 149.143 (1) (am), 149.143 (1) (bm) (intro.),
8149.143 (2) (a) (intro.), 149.143 (2) (a) 1. a., 149.143 (2) (a) 2., 149.143 (2) (a) 3.,
9149.143 (2) (a) 4., 149.143 (2) (b), 149.143 (2m) (a) (intro.), 149.143 (2m) (a) 2.,
10149.143 (2m) (b) 1., 149.143 (2m) (b) 2., 149.143 (2m) (b) 3., 149.143 (3) (a),
11149.143 (3) (a), 149.143 (3) (b), 149.143 (4), 149.143 (5) (a), 149.143 (5) (a),
12149.143 (5) (b), 149.144, 149.145, 149.145, 149.146 (1) (b), 149.146 (2) (a),
13149.146 (2) (am) 4., 149.146 (2) (am) 5., 149.146 (2) (b) (intro.), 149.146 (2) (b)
141., 149.146 (2) (b) 2., 149.15 (1), 149.165 (1), 149.165 (2), 149.165 (3) (a), 149.165
1(3) (b) (intro.), 149.17 (4), 149.175, 149.20, 149.25 (2) (a) and 149.25 (4); and
to
2create 149.10 (5f), 149.10 (5r), 149.125, 149.132, 149.142 (3), 149.143 (1) (bm)
31m., 149.143 (1) (bm) 2m. (intro.), 149.143 (2m) (c), 149.15 (3) (b), 149.15 (3) (e),
4149.15 (4) (c), 149.15 (4) (d), 149.165 (3r) and 450.10 (2m) of the statutes;
5relating to: making various miscellaneous changes to the Health Insurance
6Risk-Sharing Plan, granting rule-making authority, and providing a penalty.
Analysis by the Legislative Reference Bureau
The Health Insurance Risk-Sharing Plan (HIRSP) provides major medical
health insurance coverage for persons who are covered under Medicare because they
are disabled, persons who have tested positive for human immunodeficiency virus,
and persons who have been refused coverage, or coverage at an affordable price, in
the private health insurance market because of their mental or physical health
condition. Also eligible for coverage are persons who do not currently have health
insurance coverage, but who were covered under certain types of health insurance
coverage for at least 18 months in the past.
Premiums paid by covered persons fund 60 percent of the operating costs of
HIRSP and health insurer assessments and health care provider payment discounts
fund the remaining 40 percent of operating costs. HIRSP provides premium and
deductible subsidies for covered persons with annual household incomes below
$25,000. The subsidies are funded equally by health insurer assessments and health
care provider payment discounts. HIRSP is administered primarily by the
Department of Health and Family Services (DHFS), but a board of governors (board)
and a plan administrator also have certain responsibilities and powers with respect
to HIRSP administration.
This bill makes the following changes to HIRSP:
1. Under the bill, any drug manufacturer or labeler that provides drugs
prescribed for use by persons receiving benefits under Medical Assistance,
BadgerCare, or SeniorCare is required to provide drugs prescribed for use by persons
with coverage under HIRSP. As a condition of coverage of their prescription drugs
under HIRSP, each manufacturer or labeler is required to pay an assessment that
is based on the total claims paid by HIRSP in the previous calendar year to
pharmacies and pharmacists for the manufacturer's or labeler's drugs. The
assessment amount for each claim is equal to the rebate amount that the
manufacturer or labeler pays for the drug under Medical Assistance. Under the bill,
the 40 percent of HIRSP's operating costs that remain after premiums are used to
pay 60 percent of the costs are first to be paid with the drug manufacturer and labeler
assessments. The remainder of the 40 percent of the costs are paid, in equal
proportions, by the health insurer assessments and the health care provider
payment discounts. The bill allows the Pharmacy Examining Board to assess a
forfeiture of not more than $1,000 per day against a drug manufacturer or labeler
that fails to pay an assessment for HIRSP.
2. The bill removes most of the administrative responsibilities from DHFS and
transfers them to the board. For example, under current law, DHFS may establish
different deductible amounts and a different coinsurance percentage from what is
provided in the statutes, while under the bill the board may do so; under current law,
DHFS must establish payment rates by adding an enhancement determined by
DHFS to the allowable charges under Medical Assistance, while under the bill the
board establishes the allowable charges in the same manner and must consult with
DHFS; under current law, DHFS establishes a program budget in consultation with
the board and may implement the budget only if it is approved by the board, while
under the bill the board establishes the program budget and must consult with
DHFS in deriving the provider payment rate; under current law, prior to each plan
year DHFS must estimate the operating and administrative costs of HIRSP and set
premiums, insurer assessment amounts, and provider payment rate discounts,
while under the bill the board performs these functions, as well as setting the drug
manufacturer and labeler assessment amounts; and under current law, DHFS is
required to promulgate rules for the operation of HIRSP and must consult with the
board before promulgating any rules related to HIRSP, while under the bill the board
is required to promulgate rules for the design and operation of HIRSP, consulting
with DHFS as necessary, and DHFS may promulgate a rule only if the board has
approved the proposed rule.
3. Under current law, the secretary of health and family services, or his or her
representative, is the chairperson of the board. The bill provides that the board will
annually select the chairperson. The bill also adds a representative of
Pharmaceutical Research and Manufacturers of America to the board, the members
of which are appointed by the secretary of health and family services.
4. Under current law, expenses covered under HIRSP and exclusions are set
out in the statutes. The bill eliminates those provisions and requires the board to
establish by rule the plan design, including covered expenses and exclusions.
5. Under current law, DHFS may select the plan administrator in a competitive
bidding process. The bill requires the board to select the plan administrator in a
competitive, request-for-proposals process and allows the board to contract with
other persons to provide professional services to the board and HIRSP.
6. The bill allows the board to establish for covered persons with annual
household incomes over $100,000 a separate schedule of premium rates that are
higher than the rates for other covered persons. The additional premium collected
must be used to further reduce the premiums paid by lower-income covered persons
who receive a subsidy for premiums and deductibles.
7. Under current law, a person is eligible for HIRSP coverage if he or she is
rejected for coverage by one or more insurers, has coverage canceled by one or more
insurers, or receives notice of a substantial reduction in coverage or a 50 percent
increase in premium. Under the bill, a person is eligible if he or she is rejected for
coverage by two or more insurers or if he or she is rejected for coverage by at least
one insurer in addition to having coverage canceled or reduced, or premiums
increased, by one or more insurers.
8. Under current law, a person is not eligible for coverage under HIRSP if he
or she is eligible for coverage provided by an employer. The bill requires DHFS to
verify information that an applicant provides about his or her employment and
whether health care coverage is available through that employment and to
periodically verify the information if the person receives coverage under HIRSP.
DHFS must maintain a data base with the information and submit a quarterly report
to the board on the information.
9. Finally, the bill requires that any federal grant moneys received by the state
under the Trade Adjustment Assistance Reform Act of 2002 be used for HIRSP to pay
plan costs before any costs are paid with premiums or insurer and drug
manufacturer and labeler assessments and provider payment discounts.
For further information see the state 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:
SB466, s. 1
1Section
1. 25.55 (3) of the statutes is amended to read:
SB466,4,32
25.55
(3) Insurer
and drug manufacturer and labeler assessments under ch.
3149.
SB466, s. 2
4Section
2. 49.475 (2) (a) (intro.) of the statutes is amended to read:
SB466,4,85
49.475
(2) (a) (intro.) Information that the department needs to identify
6beneficiaries of medical assistance
, and persons applying for coverage or who are
7covered under the Health Insurance Risk-Sharing Plan under ch. 149, who satisfy
8any of the following:
SB466, s. 3
9Section
3. 149.10 (3) of the statutes is amended to read:
SB466,4,1210
149.10
(3) "Eligible person" means a resident
of this state who qualifies under
11s. 149.12 whether or not the person is legally responsible for the payment of medical
12expenses incurred on the person's behalf.
SB466, s. 4
13Section
4. 149.10 (5f) of the statutes is created to read:
SB466,5,4
1149.10
(5f) "Labeler" means a person that receives prescription drugs from a
2manufacturer or wholesaler and repackages those drugs for later retail sale and that
3has a labeler code issued by the federal food and drug administration under
21 CFR
4207.20 (b).
SB466, s. 5
5Section
5. 149.10 (5r) of the statutes is created to read:
SB466,5,86
149.10
(5r) "Manufacturer" means a person engaged in the production,
7preparation, propagation, compounding, conversion, or processing of prescription
8drugs.
SB466, s. 6
9Section
6. 149.11 of the statutes is amended to read:
SB466,5,15
10149.11 Operation of plan. The
department board shall promulgate rules for
11the
design and operation of a plan of health insurance coverage for
an eligible
person
12which persons that satisfies the requirements of this chapter.
The board shall
13consult with the department as necessary in promulgating the rules under this
14section. The department shall provide the board with the support necessary for the
15board to carry out its responsibilities under this chapter.
SB466, s. 7
16Section
7. 149.115 of the statutes is amended to read:
SB466,5,21
17149.115 Rules relating to creditable coverage. The commissioner, in
18consultation with the department
and the board, shall promulgate rules that specify
19how creditable coverage is to be aggregated for purposes of s. 149.10 (2t) (a) and that
20determine the creditable coverage to which s. 149.10 (2t) (b) and (d) applies. The
21rules shall comply with section 2701 (c) of P.L.
104-191.
SB466, s. 8
22Section
8. 149.12 (1) (a) of the statutes is amended to read:
SB466,5,2323
149.12
(1) (a) A notice of rejection of coverage from
one 2 or more insurers.
SB466, s. 9
24Section
9. 149.12 (1) (am) of the statutes is amended to read:
SB466,6,2
1149.12
(1) (am) A notice of
rejection of coverage from one or more insurers and
2a notice of cancellation of coverage from one or more insurers.
SB466, s. 10
3Section
10. 149.12 (1) (b) of the statutes is amended to read:
SB466,6,84
149.12
(1) (b) A notice of
rejection of coverage from one or more insurers and
5a notice of reduction or limitation of coverage, including restrictive riders, from an
6insurer if the effect of the reduction or limitation is to
substantially reduce coverage
7substantially compared to the coverage available to a person considered a standard
8risk for the type of coverage provided by the plan.
SB466, s. 11
9Section
11. 149.12 (1) (c) of the statutes is amended to read:
SB466,6,1310
149.12
(1) (c) A notice of
rejection of coverage from one or more insurers and
11a notice of increase in premium exceeding the premium then in effect for the insured
12person by
50% 50 percent or more, unless the increase applies to substantially all of
13the insurer's health insurance policies then in effect.
SB466, s. 12
14Section
12. 149.12 (3) (c) of the statutes is amended to read:
SB466,6,1715
149.12
(3) (c) The
department board may promulgate rules specifying other
16deductible or coinsurance amounts that, if paid or reimbursed for persons, will not
17make the persons ineligible for coverage under the plan.
SB466, s. 13
18Section
13. 149.125 of the statutes is created to read:
SB466,6,24
19149.125 Employment verification; maintenance of data; report. (1) In
20determining a person's initial and continued eligibility, the department shall verify,
21at the time that the person applies for coverage and periodically thereafter,
22information submitted by the person about his or her employment and whether
23creditable coverage is available to the person. The department shall use information
24obtained under s. 49.475 for verification purposes under this subsection.
SB466,7,4
1(2) The department shall maintain and regularly update a computer data base
2with information about eligible persons that includes employment status and
3economic and demographic information. The department shall submit a quarterly
4report to the board on the information contained in the data base.
SB466, s. 14
5Section
14. 149.13 (1) of the statutes is amended to read:
SB466,7,106
149.13
(1) Every insurer shall participate in the cost of administering the plan,
7except
that the commissioner may by rule exempt as a class those insurers whose
8share as determined under sub. (2) would be so minimal as
to not
to exceed the
9estimated cost of levying the assessment. The commissioner shall advise the
10department board of the insurers participating in the cost of administering the plan.
SB466, s. 15
11Section
15. 149.13 (3) of the statutes is amended to read:
SB466,7,1612
149.13
(3) (a) Each insurer's proportion of participation under sub. (2) shall be
13determined annually by the commissioner based on annual statements and other
14reports filed by the insurer with the commissioner. The commissioner shall assess
15an insurer for the insurer's proportion of participation based on the total
16assessments estimated by the
department board under s. 149.143 (2) (a) 3.
SB466,7,2317
(b) If the department
or the, commissioner
, or board finds that the
18commissioner's authority to require insurers to report under chs. 600 to 646 and 655
19is not adequate to permit the department, the commissioner
, or the board to carry out
20the department's, commissioner's
, or board's responsibilities under this chapter, the
21commissioner shall promulgate rules requiring insurers to report the information
22necessary for the department, commissioner
, and board to make the determinations
23required under this chapter.