LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 25, 2001
TO: Honorable John T. Smithee, Chair, House Committee on
Insurance
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB2430 by Naishtat (Relating to a consumer assistance
program for health benefit plan consumers.), Committee
Report 1st House, Substituted
**************************************************************************
* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2430, Committee Report 1st House, Substituted: negative impact *
* of $(2,894,847) 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 $(1,271,531) *
* 2003 (1,623,316) *
* 2004 (1,623,316) *
* 2005 (1,623,316) *
* 2006 (1,623,316) *
****************************************************
All Funds, Five-Year Impact:
*****************************************************
* Fiscal Year Probable Savings/(Cost) from *
* General Revenue Fund *
* 0001 *
* 2002 $(1,271,531) *
* 2003 (1,623,316) *
* 2004 (1,623,316) *
* 2005 (1,623,316) *
* 2006 (1,623,316) *
*****************************************************
Fiscal Analysis
The bill would establish the "Health Benefit Plan Consumers Assistance
Program" within the Office of Public Insurance Counsel (OPIC). OPIC
would be authorized to contract with a non-profit organization to operate
it. The program would be open to consumers under virtually any type of
health and accident plan, whether individual or group. This would
include plans issued through insurers and Health Maintenance
Organizations (HMOs), Multiple Employer Welfare Arrangements (MEWAs),
Children's Health Insurance Program (CHIP), Employees' Retirement System
(ERS), Teachers' Retirement System (TRS), Medicare and Medicaid, although
not including Employee Retirement Income Security Act (ERISA) plans.
The program would be charged with assisting consumers appealing denials,
terminations, reductions in health care services, or refusals to pay for
such services. This would include utilization review appeals and
Medicare or Medicaid "fair" hearings providing consumers with information
about health plans available and the rights and responsibilities of
enrollees under the plans operating a toll-free number and interactive
Internet site for consumers to obtain information, advice and assistance.
It could also accept moneys from any source, including gifts, grants, and
donations. There would also be authority for OPIC or program contractor
to appoint an advisory committee made up of consumer, provider, and plan
issuer representatives.
The bill would take effect September 1. 2001.
Methodology
OPIC assumes it will contract with a non-profit organization to establish
and operate this new program and take at least six months of fiscal year
2002 to implement and require eighteen Full-time Equivalent positions
(FTEs). OPIC estimates that the new program would require thirty FTEs in
fiscal year 2003 and subsequent years. According to OPIC, there is the
potential for thousands of Texans to be referred to the program. The new
program will include the functional units. A Call Center & Intake unit
will answer a toll-free health insurance Help Line. Operators will
provide information about health benefits and plans issued through
insurers and HMOs, (MEWAs), (CHIP), (ERS), (TRS), Medicare and Medicaid.
For consumers who wish assistance, the operators will conduct an intake
interview, send follow-up correspondence, and create a case file.
Based on information provided to OPIC, the Texas Department of
Insurance's (TDI) Information Assistance operators answered about 126,000
Accident and Health (A&H) calls in fiscal year 2000. Based on an
average length of 10 minutes per call, one operator could answer 48 calls
per day, or 11,520 calls per year (240 workdays in one year). Staffing
would include eleven operators, two trainers, a manager, and a support
staff person, for a total of fifteen employees.
The health insurance counselors in the Research & Resolution unit will
conduct in-depth interviews with consumers, research their health
insurance issues including denials, terminations, and reduction of
benefits, make appropriate written and telephone contacts, and otherwise
assist in the development of the case file.
The Texas Department of Insurance received about 19,700 A&H complaints,
compared to 126,000 A&H phone calls. The 19,700 includes complaints
resolved by TDI and those initiated by health care providers. OPIC
estimates approximately 6,500 total complaints. Based on an average
preparation time of two hours per file and a caseload of four files per
day, one counselor could handle approximately 960 cases per year (240
workdays per year). Staffing would include seven health insurance
counselors. OPIC estimates that 10 percent (650) cases will go to a
hearing. An additional three senior health insurance counselors would
assist consumers whose cases go to a hearing. The agency contemplates
that expert consultants would be utilized as needed. This unit would
include a manager and two support staff.
A Director will report to the Public Counsel and provide oversight,
direction, and accountability for the program. A Webmaster would be
responsible for creating and maintaining the program's interactive
Internet site.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 327 Employees Retirement System, 454 Texas
Department of Insurance, 359 Office of Public
Insurance Counsel
LBB Staff: JK, JO, RT, DE