Requires health insurance and Medicaid coverage for treatment of stuttering.*

S3502 1R FISCAL ESTIMATE

LEGISLATIVE FISCAL ESTIMATE

[First Reprint]

SENATE, No. 3502

STATE OF NEW JERSEY

222nd LEGISLATURE

DATED: JUNE 18, 2026

SUMMARY

Synopsis:

Requires health insurance and Medicaid coverage for
treatment of stuttering.

Type of Impact:

Annual State expenditure and revenue increases; annual
expenditure increase for certain local government units and school districts.

Agencies Affected:

Division of Pensions and Benefits, Department of the
Treasury; Department of Human Services; certain local government units and
school districts.

Office of
Legislative Services Estimate

Fiscal Impact

Annual

Potential State Expenditure Increase

Indeterminate

Potential State Revenue Increase

Indeterminate

Potential Local Expenditure Increase

Indeterminate

�

The Office of Legislative Services (OLS) finds that requiring the
State Health Benefits Program, the School Employees� Health Benefits Program,
and the State Medicaid Program to provide coverage for the treatment of
stuttering, including habilitative and rehabilitative speech therapy may result
in annual indeterminate expenditure increases to the State and participating
local government employers.

�

The actual cost increase to the State and participating local
government units will depend on the number of covered persons who seek coverage
for habilitative and rehabilitative speech therapy through employer or
State-sponsored health insurance, the frequency of the services requested, any
precertification or utilization management requirements imposed by the
programs, and the allowable rates negotiated between the State�s third-party
medical contract administrators for the State Health Benefits Program and the
School Employees� Health Benefits Program, Horizon and Aetna, the Managed Care
Organizations (MCOs) that run the plans in which the majority of NJ Medicaid
beneficiaries are enrolled, and various providers and their respective
networks.

�

Any increase in State expenditures under the NJ FamilyCare
program will be eligible for additional federal Medicaid reimbursements,
thereby increasing State revenues, albeit by an indeterminate amount.

BILL DESCRIPTION

����� This bill requires health insurers, including the
State Health Benefits Program, the School Employees� Health Benefits Program,
and the State Medicaid Program to provide coverage for medical expenses
incurred in the treatment of stuttering, including habilitative and
rehabilitative speech therapy. �Benefits are to be provided to the same extent
as for any other service, device, procedure, or product.� Under the bill,
coverage for treatment is required whether services are delivered in-person or
through telemedicine.

����� The State Health Benefits Program and School
Employees� Health Benefits Program currently provide coverage for habilitative
speech therapy for persons with autism or pervasive development disorder. �The
programs also provide coverage for rehabilitative speech therapy to restore or
improve speech after a stroke or other traumatic event or corrective surgery. �Such
services require pre-certification and are covered at 100 percent when
delivered in-network and between 60 and 80 percent when delivered
out-of-network. �There is no difference in coverage between services delivered
in-person and services delivered through telemedicine.

����� The contract between the State and the Medicaid MCOs
does not address medical treatments for stuttering, but the member handbooks
issued by each of the Medicaid MCOs for CY 2025 list speech/language pathology
or speech/language therapy as among the covered outpatient rehabilitation
services, although certain Medicaid beneficiaries will be limited to 60 days of
therapy services per calendar year. �Horizon NJ Health�s speech therapy
utilization management policy for Medicaid enrollees stipulates that speech therapy
services require a prescription by a primary care provider or a specialist, and
must be medically necessary. �Additionally, the Horizon policy limits speech
therapy services for stuttering to those enrollees whose stuttering is
associated with a congenital craniofacial anomaly, a specific illness, or
injury.

����� In addition, as part of compliance with the federal
Individuals with Disabilities Education Act, the State of New Jersey requires
all boards of education to provide a free, appropriate public education to all
students between ages three and 21, including students with disabilities who
require special education and related services, regardless of whether the
student is enrolled in public school. �Such free educational services include
habilitative speech therapy if a certified speech language pathologist finds
that a speech related disability adversely impacts a student�s educational
performance.

FISCAL ANALYSIS

EXECUTIVE BRANCH

����� None received.

OFFICE OF LEGISLATIVE SERVICES

����� The OLS finds that requiring the State Health Benefits
Program, the School Employees� Health Benefits Program, and the State Medicaid
Program to provide coverage for the treatment of stuttering, including
habilitative and rehabilitative speech therapy, may result in annual
indeterminate expenditure increases to the State and participating local
government employers.

����� Because greater than 95 percent of NJ Medicaid
beneficiaries are enrolled in one of the State�s five Medicaid managed care
plans, and the provider reimbursement rates negotiated by these MCOs are
proprietary, the OLS lacks the informational basis to determine how the bill�s
provisions would affect costs under the State Medicaid program.

����� The provider reimbursement rates negotiated between
the State�s third-party medical contract administrators for the State Health
Benefits Program and the School Employees� Health Benefits Program, Horizon and
Aetna, and various providers and their respective networks, are also
proprietary.

����� Because the State already provides habilitative speech
therapy to certain children between ages three and 21, as part of compliance
with the federal Individuals with Disabilities Education Act, the uptake of
treatment in private non-educational settings billed to the State Health
Benefits Program, the School Employees� Health Benefits Program, and the State
Medicaid Program may be less than the number of children who require these
services and receive healthcare coverage under the programs.

����� The actual cost increase to the State and
participating local governments will depend on the number of covered persons
who seek coverage for habilitative and rehabilitative speech therapy through
employer or State-sponsored health insurance, the frequency of the services
requested, any precertification or utilization management requirements imposed
by the programs, and the allowable rates negotiated between the State�s
third-party medical contract administrators for the State Health Benefits
Program and the School Employees� Health Benefits Program, Horizon and Aetna,
the MCOs that run the plans in which the majority of NJ Medicaid beneficiaries
are enrolled, and various providers and their respective networks.

����� The OLS does not have access to this information to
determine the actual costs resulting from the provisions of this bill. �However,
the OLS notes that the hourly rate for speech therapy services provided through
the NJ Department of Health�s Early Intervention System Program, which provides
services, including habilitative speech therapy to certain children from birth
to age three, is approximately $123 per hour. �A national survey of health care
claims across different market segments conducted by Milliman in 2020 found
that the nationwide allowable amount per service for speech therapy billing
codes was $50.19 for commercial large group employers, which is a comparable
market segment to the State Health Benefits Program and School Employees�
Health Benefits Program. �The survey found that the nationwide allowable amount
per service was $34.23 for Medicaid.

����� The OLS notes that an increase in State expenditures
under the NJ FamilyCare program will be eligible for additional federal
Medicaid reimbursements, thereby increasing State revenues, albeit by an
indeterminate amount.

Section:

State Government

Analyst:

Anna Harris

Associate Fiscal Analyst

Approved:

Thomas Koenig

Legislative Budget and Finance Officer

This legislative fiscal estimate has been produced by the
Office of Legislative Services due to the failure of the Executive Branch to
respond to our request for a fiscal note.

This fiscal estimate has been prepared pursuant to P.L.1980,
c.67 (C.52:13B-6 et seq.).