1 Health Insurance Risk-Sharing Plan Legislative Audit Bureau May 2004

2 HIRSP Background u Established to provide major medical insurance for those who cannot obtain private coverage for health reasons u Also provides coverage to those who have lost employer-sponsored health insurance u 18,273 policyholders enrolled as of 5/31/04 u DHFS oversees the Plan

3 Program Funding

4 Financial Position

5 Increasing Enrollment

6 Types of Claims Paid During FY

7 Audits of Controls u Independent internal control audits of HIRSP’s pharmacy benefit management company would provide additional assurance that necessary safeguards and controls are in place and working u DHFS will require independent reviews in its future contract for HIRSP’s plan administrator

8 Technical Statutory Issue u Funding formula overcredits policyholders for deductible and drug subsidies because of a technical statutory provision u A portion of related costs are not being allocated to any funding party u DHFS and the Board plan to pursue statutory changes to address the issue in the legislative session

9 Health Insurance Risk-Sharing Plan Legislative Audit Bureau May 2004