Fiscal Note

SB0143 - Marketing and Distribution of Prescription Drugs

State Impact:
This will generate approximately $500 to the General Fund which will be appropriated to the Insurance Department for postage and processing. The proposed changes would not impact insurance rates for State government, local governments, institutions of higher education, and some school districts covered by Public Employees Health Program (PEHP). Insurance companies that are not exempt from Employee Retirement Income Security Act of 1974 (ERISA) could see increased costs of up to 0.4 percent. The amount of increase depends on the disparity between the new requirement and the current operations of that company.

Individual and Business Impact:
The fiscal impact is four-fold. First, some individuals may realize a savings because of expanded options. Second, the general population of insured individuals may experience a small premium increase of up to 0.4 percent. This may be paid by the insured individual or their employers. Third, affected insurance companies must file a rate change form at a cost of $20.00 per form if their benefits change. Fourth, pharmacies may benefit or lose revenue depending on the type of operations they now perform and their share of the pharmaceutical market. Additional insurance benefits could result in added costs for the mandated benefits. The costs of mandated coverage may be recovered by: 1) reducing other benefits; 2) increasing premiums; 3) reducing insurance company profits; or 4) increasing insurance company losses.

Office of the Legislative Fiscal Analyst
1/30/2001 4:26:33 PM

Last Revised: 30 August, 2000