2003 SESSION

03-0270

01/09

HOUSE BILL 760-FN-A

COMMITTEE: Ways and Means

ANALYSIS

This bill increases the tobacco tax to allow for increased funding to 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: the expansion of the Children's Health Insurance Program to parents; health insurance coverage for low-income adults without dependent children; a pharmacy assistance program for seniors and the disabled; and community-based providers of health care.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03-0270

01/09

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Three

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

1 Purpose. The general court recognizes that New Hampshire has a tobacco problem. Tobacco consumption and costs far exceed the national average, particularly among New Hampshire youth. Thirty one percent of New Hampshire high school students use tobacco, and 34,000 children alive today will die as a result of tobacco use. The general court also recognizes that New Hampshire has a health care problem. New Hampshire still has too many families who lack health insurance and coverage for prescription drugs. Seventy two percent of the 74,000 adults in New Hampshire who lack health care coverage work full time. Medical costs attributable to smoking cost the state of New Hampshire $302,500,000 per year, including $90,000,000 per year in the medicaid program. Therefore, the general court hereby raises the tobacco tax to address these problems. A $1 increase in the tobacco tax will reduce smoking rates, particularly among New Hampshire youth, lower health care costs, and provide revenue to expand tobacco use prevention programs and meet the health care needs of New Hampshire children and families.

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] $1.52 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-R: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, 2003 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 (lllllllll) the following new subparagraph:

(mmmmmmmmm) Moneys received under RSA 78:32, II(b), which shall be credited to the healthy families trust fund established in RSA 126-R: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-Q the following new chapter:

CHAPTER 126-R

HEALTHY FAMILIES TRUST FUND

126-R: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 for each of the following programs:

(a) Expansion of the Children's Health Insurance Program, administered by the department of health and human services, pursuant to Title XXI of the Social Security Act, to parents of children eligible for the New Hampshire healthy kids program that have a family income below 185 percent of the federal poverty level.

(b) A health insurance program for adults without dependent children below 100 percent of the federal poverty level.

(c) A prescription drug assistance program for seniors and the disabled below 200 percent of the federal poverty level.

(d) Targeted financial support for "safety net" providers such as community health centers, women's health clinics, and mental health providers that serve the uninsured. In addition, funds from the New Hampshire healthy families trust fund would be used to provide assistance for hospitals considered to be at financial risk of eliminating critical community benefit programs and to support funding for translation programs to facilitate the delivery of health care services to minority populations.

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, 2004.

9 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-R:1. The department is hereby authorized to administer this program.

167:99 Definitions. In this subdivision:

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

II. "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.

III. "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.

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

V. "Program" means the pharmacy assistance program established under 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-R:1, in an amount not to exceed $79,000,000 in each fiscal year.

II. Enrollees shall be provided a benefit of not more than $2,000 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 the program, and to maximize enrollment in the 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 the 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. The copayment amounts shall not be more than $5. 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 Enrollment Fee. The department shall establish an annual enrollment fee of $10 per enrollee. Funds collected from the fee shall be used to fund the administration of this program.

167:103 Cost Containment Mechanisms. The department shall implement cost containment mechanisms consistent with the medicaid prescription drug programs, such as but not limited to: preferred drug list, provider education, group purchasing and negotiated rebates, medication review and case management, and use of mail-order and generics.

167:104 Federal Waiver. The department is encouraged to pursue an 1115 wavier for this program from the federal Department of Health and Human Services in order to obtain federal matching funds.

167:105 Rulemaking. The department shall adopt rules, pursuant to RSA 541-A, in order to implement the program established in this subdivision.

10 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.

11 Expansion of Medicaid Coverage to Parents of Children Eligible for Medicaid. 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 185 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 185 percent of the federal poverty level. The program shall receive funding from the healthy families trust fund established pursuant to RSA 126-R:1.

12 New Chapter; Healthy Adults Program. Amend RSA by inserting after 126-R the following new chapter:

CHAPTER 126-S

HEALTHY ADULTS PROGRAM

126-S:1 Definitions. In this chapter "commissioner" means the commissioner of the department of health and human services.

126-S:2 Healthy Adults Program Established. The commissioner shall establish a program providing health care benefits to adults, without dependent children, who are below 100 percent of the federal poverty level and not eligible for medicaid. This program shall be funded from the healthy families trust fund established pursuant to RSA 126-R. The health benefits provided to eligible persons under this chapter shall be equal to the benefits for medicaid-eligible persons.

126-R:3 Rulemaking. The commissioner shall adopt rules, pursuant to RSA 541-A, relative to the implementation of this chapter.

13 New Subdivisions; Healthy Communities Program; Language Interpretation Services; Catastrophic Prescription Drug Pool. Amend RSA 126-A by inserting after section 18-a the following new subdivisions:

Healthy Communities Program

126-A:18-b Definitions. In this subdivision:

I. "Community health center" means a federally qualified health center under 42 U.S.C. 254b, or a state qualified health center, under RSA 126-A, that provides comprehensive primary and preventive health care services to low-income uninsured patients; serves a geographic area or population designated as medically underserved; and accepts and serves all patients regardless of their ability to pay.

II. "Community mental health provider" means a mental health care organization providing comprehensive mental health services to low-income uninsured patients.

III. "Family planning agency" means a health care organization providing family planning, disease prevention, and cancer screening services.

IV. "Low-income uninsured patient" means a person at or below 200 percent of the federal poverty level who is not eligible for medicaid, Medicare or any other type of government reimbursement for health care costs and for whom the health care provider does not receive any third party payment.

126-A:18-c Healthy Communities Program Established.

I. The healthy communities program is hereby established to ensure access to essential health care services for low-income, vulnerable, and underserved populations.

II. The program shall be funded by the healthy families trust fund established in RSA 126-R.

III. The state treasurer in conjunction with the commissioner of health and human services shall distribute funds from the healthy families trust fund as follows:

(a) An amount up to $3,500,000 per annum for the delivery of otherwise uncompensated primary and preventive health care services to low-income uninsured patients. These funds shall be allocated as follows:

(1) Three million per annum for community health centers.

(2) Five hundred thousand per annum for family planning agencies.

(b) An amount up to $12,000,000 per annum to community mental health care providers for the delivery of otherwise uncompensated mental health care services to low-income uninsured patients.

(c) An amount not to exceed $2,000,000 to prevent hospitals at risk from closing or eliminating critical programs under a hospital community benefit program. In order to qualify for emergency benefits financial assistance under this program, a hospital shall demonstrate that it is at risk of eliminating community benefit services comprised in its community benefit plan developed in conformance with RSA 7:32-f.

(d) An amount up to $750,000 in order to make language interpretation services more available to minority low-income, vulnerable, and underserved populations.

126-A:18-d Rulemaking. The commissioner shall adopt rules, pursuant to RSA 541-A, relative to the proper administration of this subdivision.

Language Interpretation Services

126-A:18-e Language Interpretation Services in Health Care.

I. The commissioner is hereby authorized to annually expend no more than $250,000 from the healthy families trust fund, established in RSA 126-R, to establish a comprehensive program to improve language interpretation services in health care. The program shall assist health care providers in complying with the language interpretation requirements of Title VI of the Civil Rights Act of 1964 and related Executive Orders and Policy Guidance documents.

II. The program shall:

(a) Assess the need for language interpretation services and prepare a comprehensive plan to meet the needs determined by the assessment. The plan shall be developed in consultation with the New Hampshire Minority Health Coalition, the New Hampshire Hospital Association, the Southern New Hampshire Area Health Education Consortium and other groups and individuals concerned with language interpretation the commissioner deems relevant. The assessment and plan shall be published no later than 6 months following the effective date of this section.

(b) Revise minimum standards and requirements for language interpretation in health care, including minimum standards for certification of language interpretation providers and requirements for continuing education and periodic recertification.

(c) Establish rates of payment for language interpretation provided by the medicaid program adequate to provide sufficient access to interpretive services for medicaid beneficiaries.

(d) Periodically convene a network of certified interpreters and groups interested in language interpretation in health care and distribute best practice guidelines regarding language interpretation to health care providers, health insurers and certified language interpreters.

(e) Provide grants to health care providers or language interpretation providers to provide language interpretations services to uninsured residents of the state.

(f) Annually publish a report detailing the activities of the program and evaluating the success of the program in meeting the goals established by this section and the needs assessment.

126-A:18-f Rulemaking. The commissioner shall adopt rules, pursuant to RSA 541-A, relative to the proper administration of this subdivision.

Catastrophic Prescription Drug Pool

126-A:18-g Catastrophic Prescription Drug Pool Established. The commissioner shall establish a catastrophic prescription drug pool to provide emergency assistance to low-income seniors and people with disabilities with incomes below 200 percent of the federal poverty level with drug costs in excess of the $2000 benefit provided by the Pharmacy Assistance program established in RSA 167:98 or those individuals with catastrophic prescription drug costs as defined by the department who are not income eligible. The commissioner shall determine criteria for the distribution of available funds. Revenue from the New Hampshire healthy families trust fund, established in RSA 126-R, that is not otherwise appropriated to support the programs supported by such fund shall be used for the drug pool established in this subdivision.

126-A:18-h Rulemaking. The commissioner shall adopt rules, pursuant to RSA 541-A, relative to the proper administration of this subdivision.

14 Effective Date. This act shall take effect July 1, 2003.

LBAO

03-0270

Revised 2/19/03

HB 760 FISCAL NOTE

FISCAL IMPACT:

METHODOLOGY: