2001 SESSION

01-1009

09/01

HOUSE BILL 762-FN-A

COMMITTEE: Ways and Means

ANALYSIS

This bill increases the tobacco tax to allow for increased funding of the tobacco use prevention fund and for a healthy families trust fund. The healthy families trust fund is to be administered by the department of health and human services and provides funding for: medical assistance for persons 65 years of age and older; the Children's Health Insurance Program and expansion of the Children's Health Insurance Program to parents; a pharmacy assistance program; a pilot program providing health insurance coverage for child care workers; and the senior prescription drug discount program.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

01-1009

09/01

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand One

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Statement of Purpose. It is the intent and purpose of this act to address the health care needs of the citizens of New Hampshire. The general court recognizes that a healthy citizenry contributes greatly to the overall health of the economy and general well being of the state. The general court declares that it is the policy of the state of New Hampshire to share in the costs of tobacco control programs and health care access in order to assist the more critically needy components of the population in attaining access to quality health care.

2 Cigarette Tax Increased. Amend RSA 78:7 to read as follows:

78:7 Tax Imposed. A tax upon the retail consumer is hereby imposed at the rate of [52 cents] $1.02 for each package containing 20 cigarettes or at a rate proportional to such rate for packages containing more or less than 20 cigarettes, on all tobacco products sold at retail in this state. The payment of the tax shall be evidenced by affixing stamps to the smallest packages containing the tobacco products in which such products usually are sold at retail. The word "package" as used in this section shall not include individual cigarettes. No tax is imposed on any transactions, the taxation of which by this state is prohibited by the Constitution of the United States.

3 Distribution of Funds. Amend RSA 78:32 to read as follows:

78:32 Distribution of Funds.

I.(a) The commissioner shall determine the additional amount of revenue produced by any additional tax in excess of 37 cents and less than 53 cents for each package containing 20 cigarettes or at a rate proportional to such rate for packages containing more or less than 20 cigarettes, on all tobacco products sold at retail in this state imposed by RSA 78:7 and shall certify such amount to the state treasurer by October 1 of each year for deposit in the education trust fund established by RSA 198:39.

[II.](b) The commissioner shall make quarterly estimates of the amount of additional revenues that will be produced by such increase in tax rate for the next fiscal year and shall certify such amount to the state treasurer for deposit in the education trust fund established by RSA 198:39. Such estimates shall be certified on June 1, September 1, December 1, and March 1 of each year.

II. The commissioner shall determine the additional amount of revenue produced by any additional tax in excess of 52 cents for each package containing 20 cigarettes or at a rate proportional to such rate for packages containing more or less than 20 cigarettes, on all tobacco products sold at retail in this state imposed by RSA 78:7 and shall certify such amount to the state treasurer by June 30 of each year for deposit as follows:

(a) The sum of no less than $7,800,000 shall be deposited in the tobacco use prevention fund established pursuant to RSA 126-K:15.

(b) The remainder of the amount shall be deposited in the healthy families trust fund established pursuant to RSA 126-P:1.

4 Applicability. Section 2 of this act shall apply to all persons licensed under RSA 78:2. Such persons shall inventory all taxable tobacco products in their possession and file a report of such inventory with the department of revenue administration on a form prescribed by the commissioner within 20 days after the effective date of this act. The tax rate effective July 1, 2001 shall apply to such inventory and the difference, if any, in the amount paid previously on such inventory and the current effective rate of tax shall be paid with the inventory form. The inventory form shall be treated as a tax return for the purpose of computing penalties under RSA 21-J.

5 Tobacco Use Prevention Fund. Amend RSA 6:12, I (yyy) to read as follows:

(yyy) Moneys received under RSA 126-K:15 and RSA 78:32, II(a), which shall be credited to the tobacco use prevention fund.

6 New Subparagraph; Healthy Families Trust Fund. Amend RSA 6:12, I by inserting after subparagraph (dddd) the following new subparagraph:

(eeee) Moneys received under RSA 78:32, II(b), which shall be credited to the healthy families trust fund established in RSA 126-P:1.

7 Tobacco Use Prevention Fund. Amend the introductory paragraph of RSA 126-K:15 to read is follows:

126-K:15 Tobacco Use Prevention Fund. There is hereby established in the office of the state treasurer a fund to be known as the tobacco use prevention fund. Of tobacco settlement funds received by the state of New Hampshire, $3,000,000 annually, commencing with fiscal year 2001, shall be deposited in the tobacco use prevention fund. The sum of $7,800,000 from tobacco tax revenues shall be deposited annually in the fund, pursuant to RSA 78:32, II(a). Moneys in this fund shall be nonlapsing and continually appropriated, beginning with fiscal year 2001, for tobacco use prevention and cessation programs, which shall include but not be limited to:

8 New Chapter; Healthy Families Trust Fund. Amend RSA by inserting after chapter 126-O the following new chapter:

CHAPTER 126-P

HEALTHY FAMILIES TRUST FUND

126-P:1 Healthy Families Trust Fund.

I. There is hereby established in the office of the state treasurer a separate fund to be known as the healthy families trust fund. This trust fund shall be administered by the state treasurer. There shall be credited to this fund:

(a) All revenues collected pursuant to RSA 78:32, II(b) as certified by the commissioner of revenue administration.

(b) Any rebates credited to this fund pursuant to RSA 167:98.

(c) Any premiums, grants, gifts or other contributions explicitly made to this fund.

II. Amounts credited to said fund shall be expended by the commissioner of health and human services in the following priority:

(a) The medical assistance program, to provide Medicaid coverage for seniors with incomes at or below 100 percent of the federal poverty level who are eligible for said program according to RSA 167:6, VII;

(b) The pharmacy assistance program, established pursuant to RSA 167:98 in an amount not to exceed $40,000,000;

(c) The Children's Health Insurance Program, administered by the department of health and human services, pursuant to Title XXI of the Social Security Act;

(d) The Children's Health Insurance Program for parents administered by the department of health and human services, pursuant to Title XXI of the Social Security Act;

(e) Any pilot program established within the department of health and human services which provides health insurance coverage for child care workers; and

(f) To increase the prescription reimbursement dispensing fee to pharmacists for the senior prescription drug discount program; provided that funding dedicated to said program from this fund shall only be used for the dispensing fee for pharmacists and not for the operation of said program.

III. Any funds allocated from this fund that are not expended for the prioritized programs shall lapse to this fund at the end of each biennium, beginning with the biennium ending June 30, 2003.

9 Medical Assistance for Seniors. Amend RSA 167:6, VII to read as follows:

VII. For purposes hereof, a person shall be eligible for medical assistance as categorically needy or as medically needy. A person shall be eligible as categorically needy if he receives financial assistance under RSA 167:6, I, IV, V or VI, or is otherwise eligible to receive such assistance but does not. A person shall be eligible as medically needy if he meets the categorical, age, and technical requirements under RSA 167:6, I, IV, V or VI, and if his income and assets meet the standards as prescribed for the medically needy program. A person shall also be eligible as categorically needy or as medically needy who is eligible for medical assistance pursuant to the mandates of federal law or regulation or pursuant to optional state coverage groups which are allowed by federal regulation and defined by the commissioner of the department of health and human services in accordance with rules adopted under RSA 541-A, but who does not receive assistance or would not be otherwise eligible to receive assistance under paragraph I, IV, V, or VI of this section. A person shall be eligible for the medical assistance program, who meets the criteria established in paragraph I of this section and has an income at or below 100 percent of the federal poverty level.

10 New Subdivision; Pharmacy Assistance Program. Amend RSA 167 by inserting after section 97 the following new subdivision:

Pharmacy Assistance Program

167:98 Program Established. There is hereby established the pharmacy assistance program, to be funded by the healthy families trust fund established pursuant to RSA 126-P:1. The department is hereby authorized to administer this program.

167:99 Definitions.

I. "Department" means the department of health and human services.

II. "Eligible person" means a resident of New Hampshire who:

(a) Is 65 years of age or older; or

(b) Is 18 years of age or older and has been determined to be "disabled" by the Social Security Administration; and

(c) Has a gross annual household income of not more than 200 percent of the federal poverty level. For the purposes of determining eligibility under this section, annual income shall not include the cost of Medicare Part B premiums unless the cost of the premium is paid by the department; and

(d) Is not eligible for the medical assistance program under this chapter.

III. "Program" means the pharmacy assistance program established under this subdivision.

IV. "Drugs" means all prescription drugs that have been approved as safe and effective by the federal Food and Drug Administration or are otherwise legally marketed in the United States, including insulin, insulin syringes, and insulin needles.

V. "Enrollee" means an eligible individual who receives benefits under the pharmacy assistance program established by this subdivision.

167:100 Administration of the Program.

I. The department of health and human services shall administer the pharmacy assistance program in order to provide prescription drug coverage to eligible persons who lack sufficient access to necessary prescription drugs. Enrollment in the program shall be voluntary and shall be funded by the healthy families trust fund, established under RSA 126-P:1, in an amount not to exceed $40,000,000 in each fiscal year.

II. Enrollees shall be provided a benefit of not more than $1,250 for the cost of prescription drugs that are purchased as part of this program.

III. The department shall verify the income of applicants for the program according to the most recent income tax returns for the applicant. If an applicant is not required to pay income tax, the department shall verify the applicant's income through submission of monthly checks received by said applicant.

IV. The department shall conduct outreach marketing efforts to ensure that eligible senior citizens and people with disabilities are aware of the availability of the program, to provide eligible individuals with the guidelines of said program, and to maximize enrollment in said program.

V. The department shall have the authority to close enrollment to the program or create a waiting list, if the commissioner reasonably believes that the costs of said program will exceed the available appropriation for said program.

VI. The department shall establish a procedure for enrollees to appeal a decision by the department to deny payment for a certain drug.

167:101 Copayments. The department shall develop copayment requirements for all purchases of drugs by an enrollee in the program. Said copayment amounts shall not be more than $5 for generic drugs or $12 for brand drugs. The department shall provide information in writing to individuals who enroll in the program as to which drugs are covered by the program, the copayment amounts, and any restrictions on drugs.

167:102 Rebates. The department may negotiate a rebate arrangement with pharmaceutical companies. Revenues received from such rebate shall be credited to the healthy families trust fund, established pursuant to RSA 126-P:1, and may be used to supplement the funding, eligibility, and drug coverage of the program.

167:103 Reports. The department shall report to the general court on the pharmacy assistance program on or before January 1 of each year, commencing one year following implementation of the program. This report shall be submitted by the department to the house and senate finance committees, the senate public institutions, health and human services committee and the house health, human services and elderly affairs committee. The report shall address the enrollment status of the program, outreach efforts by the department to educate senior citizens and persons with disabilities about the program, the expenditures and projected expenditures of the program, utilization of the program, and demographics of enrollees.

167:104 Rulemaking. The department shall adopt rules, pursuant to RSA 541-A, in order to implement the program established by the subdivision.

11 Reference Change; Education Trust Fund. Amend RSA 198:39, I (d) to read as follows:

(d) Funds collected and paid over to the state treasurer by the department of revenue administration pursuant to RSA 78:32, I, relative to tobacco taxes.

12 Expansion of Medicaid Coverage to Parents of Children Eligible for Medicaid.

I. The commissioner of the department of health and human services shall establish a program providing benefits under the medicaid program to parents of children, who are eligible for medicaid pursuant to Title XIX of the Social Security Act, who have incomes at or below 133 percent of the federal poverty level. The commissioner shall administer this program under Title XXI of the Social Security Act. The commissioner shall apply to the federal Health Care Financing Administration for a waiver pursuant to Title XXI of the Social Security Act in order to extend the S-CHIP program to include parents with incomes at or below 133 percent of the federal poverty level. The program shall receive funding from the healthy families trust fund established pursuant to RSA 126-P:1.

II. The commissioner shall adopt rules, pursuant to RSA 541-A, in order to implement the program. The department shall conduct significant outreach efforts in order to provide information to eligible parents on the availability of said program. The commissioner shall report to the general court on the implementation of the program 12 months following the effective date of this section and on or before January 20 of each subsequent year. The report shall detail the number of enrollees in the program, the outreach efforts undertaken by the department for the program, and the estimated annual cost of the program.

13 Pilot Program Established. Health Insurance Coverage for Child Care Workers.

I.(a) The general court hereby finds that it is the intent of this pilot program to provide health insurance coverage for child care workers who care for the children of New Hampshire's lowest income working families. Child care is a vital component of New Hampshire's welfare to work initiatives and this pilot program will provide an incentive for licensed child care agencies to accept state subsidized children.

(b) The general court further finds that this pilot program will increase benefits in a field which currently has low wages and few employer-sponsored benefits. It is the intent of the general court that increasing the availability of health insurance coverage will result in stabilizing the child care workforce.

II. There is hereby established a 3-year pilot program within the department of health and human services for providing employees of certain child day care agencies with access to health care insurance. The pilot program shall receive funding from the healthy families trust fund, established pursuant to RSA 126-P:1. For the purposes of this program, "department" shall mean the department of health and human services. The pilot program shall terminate on July 1, 2004, unless the legislature acts to extend the program.

III.(a) The state shall pay 50 percent of the premium for medical and surgical benefits, including group hospitalization, hospital medical care, and surgical care, for each full-time employee of a family day care home or family group day care home, as such homes are defined in RSA 170-E:2, IV (a) and (b), provided such homes meet the following eligibility requirements:

(1) The family day care home or family group day care home is licensed pursuant to RSA 170-E;

(2) The family day care home or family group day care home has provided care for 2 or more children for which the home received payment under any of the department's child care programs for 9 or more of the preceding 12 months prior to applying to the department for health care coverage under this program; and

(3) The family day care home or family group day care home continues to provide child care services for 2 or more children, for which either home is receiving payment under any of the department's child care programs as of the time the application to the department for health care coverage is submitted.

(b) To be eligible for the benefit established in this paragraph, a full-time employee of a family day care home or family group day care home shall not be eligible to receive health insurance benefits under a spouse's employer-sponsored health insurance programs.

IV. The state shall pay a percentage of the premium for medical and surgical benefits, including group hospitalization, hospital medical care, and surgical benefits, for each full-time employee of a child day care agency, as defined in RSA 170-E:2, IV (c)-(e) and (g), which provides child day care services paid for in whole or in part by the department and which is licensed pursuant to RSA 170-E.

(1) The state shall pay 35 percent of the premium for a full-time employee of a child day care agency where, during the 6-month period immediately preceding application to the department for health care insurance, the number of children served by that agency who are enrolled in any of the department's child care subsidy or assistance programs is not less than 35 percent or more than 50 percent of the child day care agency's total licensed capacity.

(2) The state shall pay 50 percent of the premium for a full-time employee of a child day care agency where, during the 6-month period immediately preceding application to the department for health care insurance, the number of children served by that agency who are enrolled in any of the department's child care subsidy or assistance programs is greater than 50 percent of the child day care agency's total licensed capacity.

(b) To be eligible for the benefit established in this paragraph, a full-time employee of a child day care agency as defined in this section shall not be eligible to receive health insurance benefits under a spouse's employer-sponsored health insurance program.

(c) No benefit provided under this paragraph shall exceed benefits provided by the medicaid program.

V. The department of health and human services shall prepare a report detailing the number of participating providers, the number of workers covered by the provisions of the pilot program, the changes in the number of licensed providers, and an estimate of the effect on staff retention. The report shall be submitted to the speaker of the house of representatives, the senate president, and the governor no later than November 1 of each year of the pilot program.

VI. The commissioner of the department of health and human services shall adopt rules, pursuant to RSA 541-A, relative to application procedures, eligibility criteria, limitations and restrictions, insurance coverage benefits limited to the level of benefits provided through the medicaid program, and any other matter consistent with the provisions of the pilot program.

14 Repeal. Section 13 of this act, relative to a pilot program providing health care insurance for child care workers, is repealed.

15 Effective Date.

I. Section 14 of this act shall take effect July 1, 2004.

II. The remainder of this act shall take effect July 1, 2001.

LBAO

01-1009

2/21/01

HB 762-FN-A - FISCAL NOTE

FISCAL IMPACT: