LEGISLATIVE FISCAL ESTIMATE TO

SENATE, No. 234

STATE OF NEW JERSEY

DATED: JULY 24, 1996

      Senate Bill No. 234 of 1996 requires that Medicaid prescription drug benefits be provided on a fee-for-service basis based upon reimbursement formulas established by the Commissioner of Human Services and prohibits the inclusion of such benefits in a managed care plan offered in the State. The bill also prohibits the Commissioner of Insurance from approving for utilization in the Medicaid program a health benefits plan offered by an insurer or health maintenance organization (HMO) which provides prescription drug benefits.

      Agency Comments:

      The Department of Human Services and the Office of Management and Budget have not provided any fiscal information on the legislation.

      Office of Legislative Services Comments:

      The Office of Legislative Services is not able to estimate the cost associated with the legislation as the differential between what HMOs and the Medicaid program reimburse for prescription drugs is not known. However, as it is generally acknowledged that Medicaid reimburses more for the same prescription drugs than HMOs, Medicaid costs for prescription drugs would be expected to increase if prescription drugs are not covered by HMOs.

      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.