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HB 2473

Increasing and maintaining the bracketed tax rates on the privilege of establishing or operating a health maintenance organization

2025 Regular Session Introduced by Vernon Criss and 1 co-sponsor

HB 2473 raises tiered taxes on health maintenance organizations in West Virginia, boosting Medicaid funding to improve healthcare access for low-income residents.

To Finance
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Bill Summary · HB 2473

Summary of House Bill 2473

Bill Number: HB 2473
Title: Increasing and Maintaining the Bracketed Tax Rates on the Privilege of Establishing or Operating a Health Maintenance Organization
Status: To Finance
Introduced: February 3, 2025
Subject: Health, Taxation

Purpose and Intent

House Bill 2473 aims to amend the existing tax structure for health maintenance organizations (HMOs) operating in West Virginia. The bill seeks to increase and maintain bracketed tax rates imposed on these organizations, which are crucial for funding healthcare services provided to Medicaid members. The intent is to ensure that the tax rates reflect the costs of care and comply with federal regulations.

Key Provisions

  1. Tax Imposition:

    • The bill levies an annual broad-based health care-related tax on certified HMOs for the privilege of operating within the state.

  2. Tax Rates:

    • The tax rates are structured in tiers based on the number of Medicaid member months and non-Medicaid member months:
      • Tier I: $78.75 for each Medicaid member month under 250,000.
      • Tier II: $45.00 for each Medicaid member month between 250,000 and 500,000.
      • Tier III: $2.25 for each Medicaid member month greater than 500,000.
      • Tier IV: $0.5604 for each non-Medicaid member month under 150,000.
      • Tier V: $0.2300 for each non-Medicaid member month of 150,000 or more.

  3. Rate Adjustments:

    • Starting July 1, 2026, the tax rates will be adjusted annually to maintain compliance with federal regulations, specifically ensuring that the rates do not exceed the maximum aggregate amount allowed under 42 C.F.R. § 433.68.

  4. Certification Process:

    • The West Virginia Bureau for Medical Services will certify the capitation rate changes and publish the adjusted rates before July 1 of each year.

  5. Definitions:

    • The bill includes definitions for key terms such as "managed care organization," "Medicaid member," and "non-Medicaid enrollee," ensuring clarity in the application of the tax.

Impact

  • Affected Entities: The bill directly impacts health maintenance organizations operating in West Virginia, particularly those providing services to Medicaid beneficiaries.
  • Funding for Healthcare: By increasing the tax rates, the bill aims to enhance funding for Medicaid services, potentially improving access to healthcare for low-income individuals.
  • Compliance with Federal Law: The adjustments and maintenance of tax rates are designed to ensure compliance with federal healthcare regulations, which is essential for the state's Medicaid funding.

Procedural Aspects

  • Legislative Timeline:
    • The bill was first introduced on February 3, 2025, and has undergone several readings and discussions in both the House and Senate.
    • It has been referred to the Finance Committee for further consideration.

This summary provides an overview of HB 2473, highlighting its purpose, key provisions, and potential impact on healthcare funding and regulation in West Virginia.

Compiled from official sources — confirm details with the bill’s official record.

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