LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
SENATE, No. 2535
STATE OF NEW JERSEY
220th LEGISLATURE
DATED: DECEMBER 19, 2023
SUMMARY
Synopsis: Requires health benefits coverage of hearing aids and cochlear
implants for insureds aged 21 or younger.
Type of Impact: Annual expenditure increase to the State General Fund and local
government funds.
Agencies Affected: Department of the Treasury, Division of Pensions and Benefits; local
government entities.
Office of Legislative Services Estimate
Fiscal Impact Annual
State Cost Increase $56,234 to $741,652
Local Cost Increase $80,266 to $1,058,600
Total Cost Increase $136,500 to $1,800,252
The Office of Legislative Services (OLS) estimates that providing health benefits coverage for
hearing aids and cochlear implants for 16 to 21 year olds would result in an annual State
expenditure increase ranging from $0.1 million to $0.7 million and an annual local expenditure
increase ranging from $0.1 million to $1.1 million. The OLS anticipates the costs would likely
fall toward the lower end of the range.
The bill permits a limit on the benefits provided to one hearing aid for each hearing-impaired
ear every 24 months. The OLS notes that if the State Health Benefits Commission and School
Employees’ Health Benefits Commission choose the limit the health benefits, the cost will be
lower. The OLS is not able to predict the benefit limitations that will be adopted.
BILL DESCRIPTION
This legislation requires government healthcare plans and private sector health insurers in New
Jersey to provide health benefits coverage for the purchase of medically necessary hearing aids
and cochlear implants to covered persons aged 21 and younger. The bill permits insurers,
Office of Legislative Services Legislative Budget and Finance Office
State House Annex Phone (609) 847-3105
P.O. Box 068 Fax (609) 777-2442
Trenton, New Jersey 08625 www.njleg.state.nj.us
FE to S2535 [1R]
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including the State Health Benefits Commission, the School Employees’ Health Benefits
Commission, and NJ FamilyCare, to limit the benefit provided per hearing aid for each hearing-
impaired ear every 24 months. Current law requires government healthcare plans and private
sector health insurers in New Jersey to provide health benefits coverage for the purchase of
medically necessary hearing aids and cochlear implants to covered persons aged 15 and younger.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS estimates that providing health benefits coverage for hearing aids and cochlear
implants for 16 to 21 year olds would result in an annual State expenditure increase ranging from
$0.1 million to $0.7 million and an annual local expenditure increase ranging from $0.1 million to
$1.1 million.
Using available information from the State Health Benefits Program and the School
Employees’ Health Benefits Program, the OLS estimates there will be 57,024 newly eligible
dependents under the bill. Further, the analysis assumes a severe hearing loss incident rate of two
hearing aids per 1,000 children, based on information from the federal Centers for Disease Control
and Prevention. For the estimated cost of the hearing aids, the OLS accessed information on the
Blue365 insurance price for the low end of the cost estimate range, and information on the
manufacturer’s suggested retail price for the high end of the cost estimate range.
The following table illustrates the assumptions and the estimated fiscal impact.
Estimated Fiscal Impact of S-2535 (1R)
Estimated CDC Assumes
Newly Estimate - Projected number of
Eligible Severe Newly hearing MSRP Per Aid -
Health Dependents Hearing Loss Eligible aids per Lowest Cost to Blue365 Price -
State or Local Insurance Under Incidence 16-21 individual Highest Cost Fiscal Impact Range for Lowest Cost to Fiscal Impact Range
Fiscal Impact Plan S2535 (1R) Rate Year Olds is 2 (1) MSRP Highest Cost (2) for Blue365
SHBP -
State
State Portion 23,470 0.2% 47 94 $ 1,399 $ 7,900 $ 131,338 $ 741,652 $ 599 $ 2,299 $ 56,234 $ 215,830
Local SEHBP 18,368 0.2% 37 74 $ 1,399 $ 7,900 $ 103,526 $ 584,600 $ 599 $ 2,299 $ 44,326 $ 170,126
SHBP -
Local
Portion 15,186 0.2% 30 60 $ 1,399 $ 7,900 $ 83,940 $ 474,000 $ 599 $ 2,299 $ 35,940 $ 137,940
Local Subtotal 33,554 67 134 $ 187,466 $ 1,058,600 $ 80,266 $ 308,066
Total 57,024 114 228 $ 318,804 $ 1,800,252 $ 136,500 $ 523,896
(1) MSRP per aid is the Manufacturer's Suggested Retail Price per aid, i.e. aid per ear
(2) Pricing Source: Start Hearing Horizon Blue365
The OLS assumes that many of the hearing aids will be purchased at the discounted insurance
price, and therefore anticipates the costs would likely fall toward the lower end of the range.
The bill permits a limit on the benefits provided to one hearing aid for each hearing-impaired
ear every 24 months. The OLS notes that if the State Health Benefits Commission and School
Employees’ Health Benefits Commission choose the limit the health benefits, the cost will be
lower. The OLS is not able to predict the benefit limitations that will be adopted.
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Section: State Government
Analyst: Anna Harris
Assistant Fiscal Analyst
Approved: Thomas Koenig
Legislative Budget and Finance Officer
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 (C.52:13B-6 et seq.).
Statutes affected: Introduced: 17:48-6, 17:48A-7, 17:48E-35.31, 17B:26-2.1, 17B:27-46.1, 17B:27A-7.14, 17B:27A-19.18, 26:2J-4.32, 52:14-17.29, 30:4J-12.2