The General Assembly had to address an unexpected emergency in the State Health Plan as the 2008 session draws to a close this week. A new forecast for the 2008-09 year indicates that the State Health Plan could experience as much as a $257 million loss by the end of the current Plan year that ends June 30, 2009. The forecast projected that the Plan could require an infusion of cash in the amount of $200 to 217 million to remain solvent through the end of the Plan Year.
On Thursday, the House approved HB 2440 (State Health Plan/Shortfall Funds) that would establish a State Health Plan Contingency Account in the Office of State Budget and Management. The Account would receive a transfer of $100 million from the state’s Rainy Day Fund (Savings Reserve Account) to meet claims payment obligations in the State Health Plan. These monies would be available to supplement existing reserves of $140 million in the State Health Plan. The bill also requires the Executive Administrator of the Plan to develop a plan to insure the long-term viability of the State Health Plan.
The bill was sent to the Senate where it has been referred to the Select Committee on Employee Hospital and Medical Benefits. As of 11:30 A.M. on Friday, it was unclear if the Senate would act on House Bill 2440 before adjournment. Under the provisions of the Executive Budget Act, the Governor has the authority to address shortfalls in the State Health Plan when the General Assembly is out of session.
