|Budget Issue:||Increases in Premiums.|
|Program:||Healthy Families Program|
|Finding or Recommendation:||Adopt the administration’s proposals to increase premiums in order to achieve General Fund savings.|
Governor's Proposal. The Governor’s May Revision proposes a premium increase for children in families earning between 201 and 250 percent of the federal poverty level (FPL) from $24 to $42 per child per month, for a savings of $13.1 million from the General Fund. This mirrors the Governor’s previous January budget proposals to increase premiums for children in families earning between 151 and 200 percent of the federal poverty level (FPL) from $16 to $30 per child per month. The savings amounts for both premium proposals have been adjusted to reflect an effective date of September 2010.
In addition, the administration proposes budget bill language that requires the MRMIB board to promptly provide notification to the Joint Legislative Budget Committee if the federal government disallows subscriber premium increases for the Healthy Families Program under the Patient Protection and Affordable Care Act (PPACA), and to provide options for maintaining service at the authorized level in the 2010 Budget Act. At this time, it is not clear whether premium increases would be considered violations of the maintenance of eligibility (MOE) provisions under the PPACA.
Finally, the administration proposes trailer bill language that would require prior federal approval before premiums could be implemented, due to the risk of violating the MOE provisions under the PPACA.
Analyst’s Recommendation. We recommend adopting the administration’s proposals to increase premiums in order to achieve General Fund savings. We are still reviewing the proposed budget bill and trailer bill language.