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

2. 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. 3 Program Funding

4. 4 Financial Position

5. 5 Increasing Enrollment

6. 6 Types of Claims Paid During FY 2002-03

7. 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. 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 2005-07 legislative session

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