Austin, Texas
                    FISCAL NOTE, 77th Regular Session
                              March 21, 2001
          TO:  Honorable Patricia Gray, Chair, House Committee on Public
        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.), As Introduced
*  Estimated Two-year Net Impact to General Revenue Related Funds for    *
*  HB2807, As Introduced:  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.                                                             *
General Revenue-Related Funds, Five-Year 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                      $(5,020,453)                    $(6,256,987) *
*  2003                       (3,209,727)                     (4,431,713) *
*  2004                       (3,240,333)                     (4,461,107) *
*  2005                       (3,275,333)                     (4,496,107) *
*  2006                       (3,310,333)                     (4,531,107) *
Technology Impact
For the Department of Human Services (DHS), automation costs at estimated
at $1,848,000 for FY 2002.
Fiscal Analysis
The bill would require the Health and Human Services Commission (HHSC) to
establish a demonstration project to provide medical assistance to
adults with family income not more than 100% 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 in which to implement (one of which must have a population
of more than 725,000), 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

The bill would require the HHSC to ensure that local government entities
provide the matching funds. HHSC would be required to apply for necessary

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.
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 average monthly premium cost is $252.56.
4. 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 these 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, PP, AJ