LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
April 20, 1999
TO: Honorable Patricia Gray, Chair, House Committee on Public
Health
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB1398 by Coleman (relating to indigent health care),
Committee Report 1st House, Substituted
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB1398, Committee Report 1st House, Substituted: negative impact *
* of $(105,520,045) through the biennium ending August 31, 2001. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2000 $(50,053,436) *
* 2001 (55,466,609) *
* 2002 (55,466,609) *
* 2003 (55,466,609) *
* 2004 (55,466,609) *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Probable Probable Change in *
* Year Savings/(Cost) Savings/(Cost) Revenue Number of State *
* from General from Local Gain/(Loss) Employees from *
* Revenue Fund from Local FY 1999 *
* 0001 *
* 2000 $(50,053,436) $(18,219,193) $49,802,795 6.0 *
* 2001 (55,466,609) (20,350,723) 55,178,053 9.0 *
* 2002 (55,466,609) (20,350,723) 55,178,053 9.0 *
* 2003 (55,466,609) (20,350,723) 55,178,053 9.0 *
* 2004 (55,466,609) (20,350,723) 55,178,053 9.0 *
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Fiscal Analysis
The bill would modify the County Indigent Health Care Program (CIHCP),
administered by the Department of Health.
1. The Department of Health assumes that a total of nine additional
Full-Time Equivalent positions and associated administrative costs would
be incurred in association with the implementation of the provisions of
this bill. First year staff and some costs have been reduced for a
phase-in period.
2. Section 61.006 (b) would set the minimum financial eligibility
standard for the program at 25 percent of the Federal Poverty Level.
3. Section 61.023(b) would be modified to allow the county to use less
restrictive standards of eligibility for services and credit expenditures
made on behalf of persons eligible under the less restrictive standards
toward state assistance.
4. Section 61.0235 allows counties to treat as eligible county residents
inmates of a county jail who satisfy the eligibility requirements
applicable in the county but who do not reside in the county.
Expenditures made on behalf of inmates would be creditable towards state
assistance.
5. Section 61.037 would be modified to lower the percentage of county
general revenue from ten to eight percent that a county must expend to
become eligible for state assistance.
6. Section 61.038(b) would increase the state matching ratio from 80 to
90 percent for payments made by the counties eligible for assistance for
health services for eligible persons. In addition, the bill would
provide for a mechanism allowing the department to waive the requirement
that the county meet the minimum expenditure level and provide state
assistance at a lower percentage of the General Revenue Tax Levy if the
county demonstrates that the county is unable to satisfy the eight
percent expenditure level because the county's General Revenue Tax Levy
is growing at a faster rate than its indigent health care expenditures,
or certain other circumstances.
7. The bill would add a Chapter 46 to the Health and Safety Code, which
would create a new account in the state treasury, the Tertiary Care
Facility Account, to be composed of money appropriated to the account and
gifts, grants, and donations. The Department of Health would be
required to certify to the Comptroller, for each designated tertiary care
facility, the cost of unreimbursed tertiary care provided by the
facility to persons who reside outside of the service area of the
facility or unit of local government. In addition, the department would
be required to allocate funds available in the Tertiary Care Facility
Account to facilities based on the percentages computed by dividing the
cost of the facility's unreimbursed tertiary medical services by the
total cost of all facilities' unreimbursed tertiary medical services.
8. The bill would amend Chapter 26 of the Tax code providing for a tax
rate adjustment for indigent health care.
Methodology
1. Department of Health administrative costs are assumed to be $250,641
in the first year and $288,556 in subsequent years.
2. Changing the minimum eligibility standard to 25 percent of the
Federal Poverty Level is assumed to cost $15.6 million per year in
additional General Revenue Funds. The fiscal impact to counties,
assuming the same overall average percent of the federal poverty level,
would be $4.7 million per year.
3. There is no additional information regarding the fiscal impact of
allowing counties to use less restrictive eligibility standards than
those specified under the bill, and credit the expenditures towards state
assistance, but the impact would be signficant.
4. Allowing counties to credit towards state assistance expenditures for
county jail inmates is assumed to cost an additional $12.3 million in
2000 and $17.7 million in 2001 through 2004 in additional General
Revenue.
5. Lowering the percentage of county general revenue from ten to eight
percent that a county must expend to become eligible for state assistance
is assumed to increase state expenditures by $11.3 million per year and
decrease county expenditures by the same amount. The provision allowing
for a waiver of the requirement that a county expend eight percent of the
general revenue tax levy under certain circumstances is likely to have a
fiscal impact to the state if applied.
6. Increasing the state matching ratio from 80 to 90 percent for
payments made by the counties eligible for assistance for health services
for eligible persons is assumed to increase state expenditures by $0.7
million per year and decrease county expenditures by the same amount.
7. No information is available regarding the amount of gifts, grants,
and donations that might be applied towards the Tertiary Care Fund. The
department would assume a pool of $10 million per year would be
appropriated by the state.
8. The provision amending the tax code is not anticipated to have any
fiscal impact to the state.
Local Government Impact
The estimated impact to units of local government is shown in the table
above. In general, the provisions of this bill would shift more
responsibility to the state to cover expenditures for health services
made at the county level.
Section 1.24 of the bill would allow effective tax rate increases for
taxing units increasing expenditures for indigent health care.
Increased effective tax rates would probably result in increased adopted
tax rates by taxing units, thus, increasing local revenues in tax years
in which indigent health care expenditures are made. The amount of
increase would reflect increases in expenditures.
Source Agencies: 501 Department of Health
LBB Staff: JK, TH, KF