LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
May 11, 2001
TO: Honorable Mike Moncrief, Chair, Senate Committee on
Health & Human Services
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB1853 by Maxey (Relating to coverage for certain
dependent children under the Texas Employees Uniform
Group Insurance Benefits Act.), As Engrossed
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB1853, As Engrossed: negative impact of $(8,884,230) 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. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $(4,171,000) *
* 2003 (4,713,230) *
* 2004 (5,325,950) *
* 2005 (6,018,320) *
* 2006 (6,800,700) *
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All Funds, Five-Year Impact:
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*Fiscal Probable Savings/(Cost) from Probable Savings/(Cost) from *
* Year Tobacco Settlement Receipts Other Funds *
* 5040 0997 *
* 2002 $(4,171,000) $(679,000) *
* 2003 (4,713,230) (767,270) *
* 2004 (5,325,950) (867,020) *
* 2005 (6,018,320) (979,730) *
* 2006 (6,800,700) (1,107,100) *
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Fiscal Analysis
The bill as substituted would increase employer contributions to fund the
cost of basic coverage for children eligible to participate in the State
Kids Insurance Program (SKIP). Currently, the state pays for 80% of the
cost of dependent child coverage in the Uniform Group Insurance Program
administered by the Employees Retirement System (ERS). The bill would
increase that contribution to 100%.
The bill would also require that the premiums, co-payments and other
cost-sharing provisions for SKIP participants not exceed the amount of
similar payments required under the Children's Health Insurance Program.
Methodology
The current provisions of SKIP increase the state's dependent child
contribution from 50% to 80% of the cost. The estimated cost of the 30%
additional contribution for fiscal year 2001 is $3,145,500. Increasing
the state's contribution rate to 100% would cost an additional
$2,369,600 in fiscal year 2002 and increase to $3,863,570 in fiscal year
2006. Projections assume a growth rate of 13% annually, based on ERS
projections of health care cost increases. Currently 86% of SKIP
expenditures are funded with moneys from the tobacco settlement, while
the other 14% comes from non-General Revenue-related funding sources.
There will also be additional costs incurred by reducing the co-payments
and other cost-sharing provisions for the current ERS plans to match the
CHIP provisions. ERS estimates that the state's cost for their plans
would increase by 15% if the provisions were changed to match CHIP. The
cost associated with the 15% increase is projected to be $2,480,400 in
fiscal year 2002, increasing to $4,044,230 by fiscal year 2006.
Currently 86% of SKIP expenditures are funded with moneys from the
tobacco settlement, while the other 14% comes from non-General
Revenue-related funding sources.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 327 Employees Retirement System
LBB Staff: JK, HD, RB, SC