LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 7577 NOTE PREPARED: Feb 11, 2025
BILL NUMBER: HB 1604 BILL AMENDED: Feb 11, 2025
SUBJECT: Out-of-Pocket Expense Credit.
FIRST AUTHOR: Rep. McGuire BILL STATUS: CR Adopted - 1
st
House
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: (Amended) This bill requires a health plan to credit toward a covered individual's
deductible and annual maximum out-of-pocket expenses any amount the covered individual pays directly to
any health care provider for a medically necessary covered health care service if a claim for the health care
service is not submitted to the health plan and the amount paid by the covered individual to the health care
provider is less than the average discounted rate for the health care service paid to a health care provider in
the health plan's network. The bill also requires a health plan to: (1) establish a procedure by which a covered
individual may claim a credit; (2) identify documentation necessary to support a claim for a credit; and (3)
publish average discounted rates that the health plan has negotiated to pay health care providers for health
care services.
Effective Date: July 1, 2025.
Explanation of State Expenditures: State Employee Health Plan (SEHP): The bill could increase paid
claims by the SEHP, if members reach their deductible and out-of-pocket expense limits sooner due to the
provisions in the bill. The impact is indeterminate and will depend on the number and types of claims
approved for this out-of-pocket-expense credit. The bill could also shift utilization among out of network and
lower-cost providers. Any change or increase in SEHP costs may be mitigated with adjustments to other
benefits or to employee compensation packages.
(Revised) The State Personnel Department (SPD) is the SEHP plan administrator and could experience
increased workload to establish a procedure for an individual to claim a credit, to publish average discounted
rates, and to display information and required documentation to the plan’s website. It is anticipated this can
be accomplished with existing staffing and resource levels.
The bill will impact workload for the Indiana Department of Insurance (DOI) to adopt rules and to ensure
compliance with the bill's requirements but should be able to be implemented using existing staffing and
resources. [The DOI is funded through a dedicated agency fund.]
Explanation of State Revenues: Violations: An unfair or deceptive act or practice in the business of
HB 1604 1 insurance carries a civil penalty between $25,000 and $50,000 for each act or violation, which is deposited
in the state General Fund.
Explanation of Local Expenditures: (Revised) Local entities providing health insurance may have
increased claim costs when calculating a covered individual's overall contribution to their deductible or an
out-of-pocket maximum. Additionally, all plans will have administrative costs to establish a procedure for
an individual to claim a credit, to publish average discounted rates, and to display information to the plan’s
website.
Explanation of Local Revenues:
State Agencies Affected: All.
Local Agencies Affected: Local entities providing health care insurance.
Information Sources:
Fiscal Analyst: Allison Leeuw, 317-234-9465.
HB 1604 2