LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session Revision 1 April 11, 2001 TO: Honorable Patricia Gray, Chair, House Committee on Public Health FROM: John Keel, Director, Legislative Budget Board IN RE: HB2807 by Kitchen (Relating to a demonstration project to extend Medicaid coverage to certain low-income individuals.), Committee Report 1st House, Substituted ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB2807, Committee Report 1st House, Substituted: an impact of $0 * * 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. * ************************************************************************** Based on additional information from the Department of Human Services it is assumed the agency could absorb automation costs related to implementation of the bill. General Revenue-Related Funds, Five-Year Net Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2002 $0 * * 2003 0 * * 2004 0 * * 2005 0 * * 2006 0 * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Savings/(Cost) from Probable Savings/(Cost) from * * Year All Local Units of Government Federal Funds - Federal * * 0555 * * 2002 $(4,282,492) $(6,653,538) * * 2003 (4,295,404) (6,464,626) * * 2004 (4,296,480) (6,463,550) * * 2005 (4,296,480) (6,463,550) * * 2006 (4,296,480) (6,463,550) * *************************************************************************** Technology Impact For the Department of Human Services (DHS), automation costs estimated to be $352,000 for FY 2002. Fiscal Analysis The bill would require the Health and Human Services Commission (HHSC) to establish and monitor a demonstration project to provide medical assistance to adults with family income not more than 200% of the federal poverty level who are not otherwise eligible for the assistance and do not have adequate health coverage. The Texas Department of Health (TDH) would administer the project, select the counties (one of which must have a population of more than 725,000) or municipalities (one of which must have a population of not more than 600,00) in which to implement and evaluate its effectiveness, including cost-effectiveness. If the project is cost-effective, TDH is to request funding to continue or expand the project in the budget request for the next fiscal biennium. Each even-numbered year of the project, TDH would provide a report to the Legislature on the project operation and cost-effectiveness. The bill would require the HHSC to ensure local government entities provide matching funds. The HHSC would be required to apply for necessary waivers. The bill would be effective immediately if it receives the necessary two-thirds vote in both chambers of the Legislature. Otherwise, the effective date would be September 1, 2001. Methodology 1. It is assumed the demonstration project would be approved through the Medicaid waiver process and federal funds would be available. 2. TDH assumes 2000 clients would participate in the project. 3. It is assumed the same mix of risk groups that presently constitute the Medicaid program would constitute the pilot project. (Aged, 43.57 percent, Disabled/Blind, 25.6 percent, TANF Adults, 14.9 percent, Pregnant Women, 12.66 percent, and Medically Needy, 3.27 percent.) 4. The following premium costs are assumed: Aged, $223.93, Disabled/Blind, $825.08, TANF Adults, $252.56, Pregnant Women, $586.20, and Medically Needy, $847.20. 5. It is assumed the project would be implemented September 1, 2001. Local Government Impact It is assumed local governments would provide the matching funds required for services. See table above. Source Agencies: 529 Health and Human Services Commission, 324 Texas Department of Human Services, 501 Texas Department of Health LBB Staff: JK, HD, KF, AJ