LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 6, 2001
TO: Honorable Patricia Gray, Chair, House Committee on Public
Health
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB828 by Gray (Relating to application and eligibility
for Medicaid.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB828, As Introduced: negative impact of $(172,160,888) through *
* the biennium ending August 31, 2003. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
**************************************************************************
General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $(57,923,414) *
* 2003 (114,237,474) *
* 2004 (130,294,545) *
* 2005 (136,470,979) *
* 2006 (139,312,508) *
****************************************************
All Funds, Five-Year Impact:
***********************************************************************
*Fiscal Probable Probable Probable Probable Change in *
* Year Savings/ Savings/ Savings/ Savings/ Number of *
* (Cost) from (Cost) from (Cost) from (Cost) from DHS *
* GR Match GR Match Federal Federal Employees *
* for for Funds - Funds - from FY 2001 *
* Medicaid Medicaid Federal Federal *
* 0758 0758 0555 0555 *
* 2002 $4,072,106 $4,072,106 65.0 *
* $(61,995, $(50,426, *
* 520) 341) *
* 2003 5,705,743 5,705,743 78.0 *
* (119,943, (120,693, *
* 217) 447) *
* 2004 5,971,177 5,971,177 66.0 *
* (136,265, (145,106, *
* 722) 094) *
* 2005 6,251,166 6,251,166 54.0 *
* (142,722, (154,776, *
* 145) 200) *
* 2006 6,545,602 6,545,602 40.0 *
* (145,858, (159,448, *
* 110) 854) *
***********************************************************************
Fiscal Analysis
The bill would modify the Medicaid application and recertification
processes for children under the age of 19 to make them comparable to
those of the Children's Health Insurance Program (CHIP). Specific
changes include: eliminating the face-to-face interview at application
(Section 1 (e)) and recertification (Section 2 (e)); simplifying
documentation and verification (Section 2 (d)); and excluding a
child's/family's assets and resources (Section 3). The bill would take
effect September 1, 2001.
Methodology
General Assumptions
Policy changes would impact the Department of Health (TDH), the
Department of Human Services (DHS), and the Employees Retirement System
(ERS). Excluding a Child's/Family's Assets and Resources would also
impact the Health and Human Services Commission (HHSC), which operates
CHIP. It is assumed that funding would be realigned among state agencies
as needed, with implementation occurring January 2002. No costs related
to automation are assumed. Medicaid services provided by TDH would
include premiums (weighted for fee for service and managed care),
prescriptions, dental, physician, hospital, laboratory and other
services. Client costs would remain at the estimated FY 2001 level, with
no adjustment for inflation or change in service utilization. (Average
costs do vary according to the mixture of client risk groups.) The
federal share of total client services expenses would be 60.20% in FY
2002, 60.08% in FY 2003, and 60.07% in subsequent years. To account for
potential overlap in clients, estimates for Eliminating the Face-to-Face
Interview and Simplifying Documentation and Verification have been
reduced by 10%. Annual savings/costs per eligibility-related FTE at DHS
would total approximately $30,850. Of this amount, 19% is for employee
benefits funded at ERS. The federal share of FTE expenses would be 50%
of the total.
Eliminating the Face-to-Face Interview
Recipient months per month would increase by 9,176 in FY 2002, 27,734 in
FY 2003, 34,695 in FY 2004, 37,254 in FY 2005, and 38,193 in FY 2006.
Monthly client services costs would total $138.67 each fiscal year. A
reduction in application processing time would result in a net FTE
reduction totaling 263.7 in FY 2002, 369.9 in FY 2003, 387.0 in FY 2004,
405.0 in FY 2005, and 424.8 in FY 2006.
Simplifying Documentation and Verification
Recipient months per month would increase by 20,617 in FY 2002, 63,202 in
FY 2003, 80,357 in FY 2004, 87,339 in FY 2005, and 91,216 in FY 2006.
Monthly client services costs would range from $142.99 in FY 2002 to
$141.64 in FY 2006. An increase in the number of eligible cases would
offset a reduction in application processing time, resulting in a net FTE
increase totaling 80.1 in FY 2002, 112.5 in FY 2003, 117.0 in FY 2004,
123.3 in FY 2005, and 128.7 in FY 2006.
Excluding a Child's/Family's Assets and Resources
Thirty-two percent of CHIP enrollees are within Medicaid income limits.
It is assumed that 32% of CHIP clients funded in Senate Bill 1/House
Bill 1, As Introduced, would be shifted to Medicaid, increasing Medicaid
recipient months per month by 104,114 in FY 2002, and 138,819 in
subsequent years. A net cost increase would result from a fuller benefit
package and a less favorable federal match in Medicaid. Monthly client
services costs would total $136.55 in FY 2002 and $131.53 in subsequent
years for Medicaid, compared to $108.58 each year for CHIP. The federal
match for Medicaid is noted above, compared to 72.14% in FY 2002, and
72.05% in subsequent years for CHIP. Additionally, it is assumed that
32% of potential CHIP enrollees above levels funded in Senate Bill
1/House Bill 1, As Introduced, would enroll in Medicaid, resulting in a
new cost to the state. Medicaid recipient months per month would
increase by 10,063 in FY 2002, and 21,500 in subsequent years. The
increase in Medicaid cases would be partially offset by a reduction in
application processing time, resulting in a net FTE increase totaling
249.0 in FY 2002 and 335.7 in subsequent years.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 529 Health and Human Services Commission, 304
Comptroller of Public Accounts, 324 Texas
Department of Human Services, 501 Texas Department
of Health
LBB Staff: JK, HD, PP, SW