LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session February 18, 1997 TO: Honorable Hugo Berlanga, Chair IN RE: House Bill No. 750 Committee on Public Health By: Berlanga House Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on HB750 ( Relating to coverage under health benefit plans for certain supplies and services associated with the treatment of diabetes.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by HB750-As Introduced Implementing the provisions of the bill would result in a net negative impact of $(88,000) to General Revenue Related Funds through the biennium ending August 31, 1999. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill. Fiscal Analysis This bill would require health plans that provide benefits for the treatment of diabetes and associated conditions to include coverage for diabetes equipment, diabetes supplies, and diabetes self-management training programs. This bill would be applicable to health maintenance organizations (HMOs) participating in the state managed care system beginning September 1, 1998. The only coverage required by this bill that is not provided by HMOs participating in the Employees Retirement System (ERS) is for podiatric appliances for the prevention of complications associated with diabetes. As a result, the bill is expected to increase HMO costs for ERS by $142,000 in fiscal year 1999, $150,000 in fiscal year 2000, $158,000 in fiscal year 2001, and $166,000 in fiscal year 2002. Methodolgy This analysis is based on the following assumptions: 1. HMO premiums will increase as a result of providing the coverage that is required by the bill. 2. This will increase expenses to the Uniform Group Insurance Plan (UGIP). 3. State contributions to UGIP will increase by the same amount. 4. These increased state contributions were calculated by the health actuary for ERS. The probable fiscal implications of implementing the provisions of the bill during each of the first five years following passage is estimated as follows: Five Year Impact: Fiscal Year Probable Probable Savings/(Cost) Savings/(Cost) from General from Other Funds Revenue Fund 0001 8042 1998 1998 (88,000) (54,000) 2000 (93,000) (57,000) 2001 (98,000) (60,000) 2002 (103,000) (63,000) Net Impact on General Revenue Related Funds: The probable fiscal implication to General Revenue related funds during each of the first five years is estimated as follows: Fiscal Year Probable Net Postive/(Negative) General Revenue Related Funds Funds 1998 $0 1999 (88,000) 2000 (93,000) 2001 (98,000) 2002 (103,000) No fiscal implication to units of local government is anticipated. Source: Agencies: 454 Department of Insurance 323 Teacher Retirement System and Optional Retirement Program 501 Department of Health 327 Employees Retirement System LBB Staff: JK ,BB ,BK