LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HB 537 HLS 22RS 648
Bill Text Version: REENGROSSED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: May 31, 2022 9:20 AM Author: DAVIS
Dept./Agy.: Dept of Insurance
Subject: Mandates Coverage for Infertility Diagnosis and Treatment Analyst: Patrice Thomas
INSURANCE/HEALTH RE INCREASE GF EX See Note Page 1 of 2
Requires health insurance coverage for infertility treatments
Proposed law requires health insurance plans to provide coverage for standard fertility preservation services. Proposed law
provides coverage including hospital, medical, or surgical benefits to cover medically necessary expenses of standard fertility
preservation services. Proposed law provides that an individual must have a medical condition that may cause infertility, or
medication therapy, surgery, radiation, chemotherapy, or other medical treatments directly or indirectly cause infertility.
Proposed law has a religious exemption. Proposed law effective January 1, 2023 (new health coverage plans) and January
1, 2024 (existing health coverage plans). Proposed law shall be known as “The Medically Necessary Fertility Preservation
Act”.
EXPENDITURES 2022-23 2023-24 2024-25 2025-26 2026-27 5 -YEAR TOTAL
State Gen. Fd. $0 INCREASE INCREASE INCREASE INCREASE $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $0 $0
REVENUES 2022-23 2023-24 2024-25 2025-26 2026-27 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $0 $0 $0 $0 $0 $0
EXPENDITURE EXPLANATION
Proposed law may increase State General Fund expenditures associated with a mandate to health insurance policies issued under the
insurance exchanges beginning in FY 24 and subsequent fiscal years (see narrative below). Furthermore, the proposed law will increase
claims expenditures for the private health insurance industry by an estimated $9 M - $27.8 M and premiums by an estimated $10.6 M -
$32.8 M, which represents a 0.17% - 0.52% total premium increase in FY 24 (see Expenditure Explanation on Page 2).
Insurance Exchanges Impact (State General Fund Impact)
Proposed law may increase SGF expenditures beginning in FY 24 and subsequent fiscal years according to an analysis provided by the
health actuary for LDI. The state would be required to fund health claims expenditures associated with infertility treatment coverage in the
proposed law for policies issued by qualified health plans through the health insurance exchange beginning in FY 24 with estimated costs
totaling $1.4 M to $4.3 M SGF and a potential phase-up to over $1.6 M to $5 M SGF by FY 27 and beyond. Claims expenses associated
with the proposed law would be paid out by the State Treasury Department. LDI bases this analysis on the following assumptions: the
calculations are on a fiscal year basis; the exchange population is approximately 100,000 and the insured population is assumed to be
stationary; medical cost inflation is 5%; the premium loss ratio is 85%; and the estimated cost is between $1.10 PMPM and $3.40
PMPM over the entire insured population. Based upon the aforementioned assumptions, the estimated annual cost increases for
insurance providers associated with claims are as follows:
Aggregate Cost Determination
Aggregate cost = exchange population x PMPM cost x 12 months
Base Cost (Low) - 100,000 x $1.70 PMPM x 12 months = $1,320,000
Base Cost (High) - 100,000 x $4.10 PMPM x 12 months = $4,080,000
FY 24 (Low) - $1,320,000 x 5% MI = $1,386,000 FY 26 (Low) - $1,455,300 x 5% MI = $1,528,065
FY 24 (High) - $4,080,000 x 5% MI = $4,284,000 FY 26 (High) - $4,498,200 x 5% MI = $4,723,110
FY 25 (Low) - $1,386,000 x 5% MI = $1,455,300 FY 27 (Low) - $1,528,065 x 5% MI = $1,604,468
FY 25 (High) - $4,284,000 x 5% MI = $4,498,200 FY 27 (High) - $4,723,110 x 5% MI = $4,959,266
See EXPENDITURE EXPLANATION on Page 2
REVENUE EXPLANATION
There is no anticipated direct material effect on governmental revenues as a result of this measure.
Senate Dual Referral Rules House
x 13.5.1 >= $100,000 Annual Fiscal Cost {S & H} x 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
13.5.2 >= $500,000 Annual Tax or Fee Evan Brasseaux
6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} or a Net Fee Decrease {S} Interim Deputy Fiscal Officer
 LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HB 537 HLS 22RS 648
Bill Text Version: REENGROSSED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: May 31, 2022 9:20 AM Author: DAVIS
Dept./Agy.: Dept of Insurance
Subject: Mandates Coverage for Infertility Diagnosis and Treatment Analyst: Patrice Thomas
CONTINUED EXPLANATION from page one: Page 2 of 2
EXPENDITURE EXPLANATION Continued from Page 1
PRIVATE INSURANCE IMPACT
Pursuant to R.S. 24:603.1, the information below is the projected private insurance impact of the proposed law. Based upon an actuarial
analysis prepared by LDI, the proposed law is anticipated to increase expenditures associated with claims by $13.9 M - $33.6 M and
premium increases by $16.4 M - $39.5 M for private insurers and the insured in FY 24 with phase-up costs of an estimated $16.1 M -$38.9
M claims and $19 M - $45.7 M premiums by FY 27. LDI bases this analysis on the following assumptions: the calculations are on a fiscal
year basis; the exchange population is approximately 650,000 and the insured population is assumed to be stationary; medical cost
inflation is 5%; the premium loss ratio is 85%; and the estimated cost is between $1.10 PMPM and $3.40 PMPM over the entire
insured population, which represents a 0.17% to 0.52% annual premium increase. Based upon the aforementioned
assumptions, the estimated annual cost increases for insurance providers associated with claims are as follows:
Aggregate Cost Determination
(exchange population x PMPM cost x 12 months)
Base Cost (Low) - 650,000 x $1.10 PMPM x 12 months = $ 8,580,000
Base Cost (High) - 650,000 x $3.40 PMPM x 12 months = $26,520,000
FY 24 (Low) - $ 8,580,000 x 5% MI = $ 9,009,000
FY 24 (High) - $26,520,000 x 5% MI = $27,846,000
FY 25 (Low) - $ 9,009,000 x 5% MI = $ 9,459,450
FY 25 (High) - $27,846,000 x 5% MI = $29,238,300
FY 26 (Low) - $ 9,459,450 x 5% MI = $ 9,932,423
FY 26 (High) - $29,238,300 x 5% MI = $30,700,215
FY 27 (Low) - $ 9,932,423 x 5% MI = $10,429,044
FY 27 (High) - $30,700,215 x 5% MI = $32,235,226
Aggregate Extra Premium Determination
(PMPM cost x 12 months)/medical loss ratio
Base Cost (Low) - ($1.10 PMPM x 12 months)/85% = $15.53 (0.17% annual increase)
Base Cost (High) - ($3.40 PMPM x 12 months)/85% = $48.00 (0.52% annual increase)
FY 24 (Low) - $15.53 x 5% MI = $16.31
FY 24 (High) - $48.00 x 5% MI = $50.40
FY 25 (Low) - $16.31 x 5% MI = $17.13
FY 25 (High) - $50.40 x 5% MI = $52.92
FY 26 (Low) - $17.13 x 5% MI = $17.99
FY 26 (High) - $52.92 x 5% MI = $55.57
FY 27 (Low) - $17.99 x 5% MI = $18.89
FY 27 (High) - $55.57 x 5% MI = $58.35
Senate Dual Referral Rules House
x 13.5.1 >= $100,000 Annual Fiscal Cost {S & H} x 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
13.5.2 >= $500,000 Annual Tax or Fee Evan Brasseaux
6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} or a Net Fee Decrease {S} Interim Deputy Fiscal Officer