LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session April 4, 1997 TO: Honorable David Sibley, Chair IN RE: Senate Bill No. 163, Committee Report 1st House, Substituted 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-Committee Report 1st House, Substituted Implementing the provisions of the bill would result in a net impact of $0 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 January 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 expenses to the Uniform Group Insurance Plan (UGIP) by $175,000 in fiscal year 1999, $185,000 in fiscal year 2000, $195,000 in fiscal year 2001, and $205,000 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 UGIP. 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 Savings/(Cost) from Employee Life 0973 1998 $0 1998 (175,000) 2000 (185,000) 2001 (195,000) 2002 (205,000) 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 0 2000 0 2001 0 2002 0 Similar annual fiscal implications would continue as long as the provisions of the bill are in effect. No fiscal implication to units of local government is anticipated. Source: Agencies: LBB Staff: JK ,TH ,SC ,BK