LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session February 24, 1997 TO: Honorable David Sibley, Chair IN RE: Senate Bill No. 163 Committee on Economic Development By: Zaffirini Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB163 ( 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 SB163-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 participating HMOs 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 These increased costs to ERS were calculated by ERS' health actuary, under 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. 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 $0 $0 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 501 Department of Health 323 Teacher Retirement System and Optional Retirement Program 327 Employees Retirement System LBB Staff: JK ,TH ,BK