LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session March 5, 2001 TO: Honorable Elliott Naishtat, Chair, House Committee on Human Services FROM: John Keel, Director, Legislative Budget Board IN RE: HB1921 by Maxey (Relating to the continuation of adoption assistance after the 18th birthday of certain children.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Fundsfor * * HB1921, As Introduced: Scenario 1 a negative impact of * * $(4,456,181), and Scenario 2 a negative impact of $(2,071,663), * * 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. * ************************************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Probable Probable Probable * * Year Savings/(Cost) Savings/(Cost) Savings/(Cost) Savings/(Cost) * * from General from GR Match from GR Match from Federal * * Revenue Fund for Medicaid for Title IV-E Funds - Federal * * 0001 0758 Foster 0555 * * Care/Adoption * * Payments * * 8008 * * 2002 $(1,105,583) $(488,742) $(459,491) $(1,434,262) * * 2003 (1,278,935) (594,667) (528,763) (1,690,773) * * 2004 (1,470,439) (771,408) (608,310) (2,075,626) * * 2005 (1,566,192) (970,464) (681,027) (2,484,475) * * 2006 (1,724,331) (1,132,256) (751,314) (2,833,611) * *************************************************************************** Scenario 1, above, assumes that adoption assistance payments will continue to parents of children age 18-20 who have a mental or physical disability that warrants continuation of adoption assistance under federal law and that Medicaid coverage would be provided for 90% of these children after the month of their 19th birthday. It also assumes that adoption assistance payments will continue to parents of other children age 18 who do not have a high school diploma or equivalency certificate and attend school regularly and that these payments will be financed by 100% General Revenue Funds. Scenario 2, below, only includes adoption assistance payments to parents of children age 18-20 who have a mental or physical disability that warrants continuation of adoption assistance under federal law and Medicaid coverage for 90% of these children after the month of their 19th birthday. ************************************************************************** *Fiscal Probable Probable Probable * * Year Savings/(Cost) from Savings/(Cost) from Savings/(Cost) from * * GR Match for GR Match for Title Federal Funds - * * Medicaid IV-E Foster Federal * * 0758 Care/Adoption 0555 * * Payments * * 8008 * * 2002 $(488,742) $(459,491) $(1,434,262) * * 2003 (594,667) (528,763) (1,690,773) * * 2004 (771,408) (608,310) (2,075,626) * * 2005 (970,464) (681,027) (2,484,475) * * 2006 (1,132,256) (751,314) (2,833,611) * ************************************************************************** Technology Impact The Department of Protective and Regulatory Services (PRS) estimates that it would cost $25,000 to modify the Child and Adult Protective System (CAPS) so that caseworkers can authorize adoption assistance payments beyond age 17. The agency states that these costs can be absorbed within existing resources. Fiscal Analysis The bill would require PRS to continue providing adoption assistance payments to the parents of children age 18-20 who have a mental or physical disability that warrants continuation of adoption assistance under federal law. It would also require PRS to continue providing adoption assistance payments to the parents of children age 18 who do not have a mental or physical disability that warrants continuation of adoption assistance under federal law, do not have a high school diploma or equivalency certificate, and attend school regularly. The bill states that if the Legislature does not appropriate sufficient money to provide adoption assistance payments to the parents of all the children described above, PRS shall only provide adoption assistance payments to the parents of children age 18-20 who have a mental or physical disability that warrants continuation of adoption assistance under federal law. The change in law would apply to all adoption assistance agreements entered into by the department. The effective date is September 1, 2001. Methodology Both scenarios share the following assumptions: (1) The monthly number of children turning 18 from September 1998 to August 2006 was provided by PRS. (2) The number of parents receiving adoption assistance payments that are not eligible for federal financial participation is 25% of the total adoption assistance caseload. The method-of-finance for these payments is 100% General Revenue Funds. (3) The number of parents receiving adoption assistance payments that are eligible for federal financial participation is 75% of the total adoption assistance caseload. The method-of-finance for these payments is approximately 40% General Revenue Funds and 60% Federal Funds. (4) The number of children age 18-20 with a mental or physical disability that warrants continuation of adoption assistance under federal law is 22% of the federal caseload (# 3 above). (5) The number of children age 18 without a mental or physical disability that warrants continuation of adoption assistance under federal law is 100% of the state-paid caseload (#2 above) and 78% of the federal caseload (#3 above). Of this number, 20% will not continue their schooling after the month of their 18th birthday, 20% will remain in school for 3 months, 20% for 6 months, 20% for 9 months and 20% for 12 months. (6) The average monthly cost per adoption assistance payment is $472.96 for 2002 and $472.88 for 2003 through 2006. (7) Current law covers eligible children through the month of their 19th birthday under the state Medicaid program or the state Children's Health Insurance Program (CHIP). Ninety percent (90%) of children age 19-20 who have a mental or physical disability that warrants continuation of adoption assistance under federal law would be covered by the state Medicaid program. (8) The average monthly cost of Medicaid coverage is $153.77 for 2002, $168.89 for 2003, $185.08 for 2004, $203.00 for 2005, and $222.80 for 2006. (9) The Federal Medical Assistance Percentage (FMAP) is 60.20% for 2002, 60.08% for 2003, and 60.07% for 2004 through 2006. These matching rates apply to federal adoption assistance payments as well as state Medicaid program coverage. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies: 530 Department of Protective and Regulatory Services, 501 Texas Department of Health LBB Staff: JK, HD, NM