1

Health Insurance Risk-Sharing Plan

Legislative Audit Bureau

May 2004

2

HIRSP Background Established to provide major medical insurance

for those who cannot obtain private coverage for health reasons

Also provides coverage to those who have lost employer-sponsored health insurance

18,273 policyholders enrolled as of 5/31/04

DHFS oversees the Plan

3

Program Funding

4

Financial Position

5

Increasing Enrollment

6

Types of Claims PaidDuring FY 2002-03

7

Audits of Controls 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

DHFS will require independent reviews in its future contract for HIRSP’s plan administrator

8

Technical Statutory Issue Funding formula overcredits policyholders

for deductible and drug subsidies because of a technical statutory provision

A portion of related costs are not being allocated to any funding party

DHFS and the Board plan to pursue statutory changes to address the issue in the 2005-07 legislative session

9

Health Insurance Risk-Sharing Plan

Legislative Audit Bureau

May 2004