LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session May 10, 2001 TO: Honorable Mike Moncrief, Chair, Senate Committee on Health & Human Services FROM: John Keel, Director, Legislative Budget Board IN RE: HB3038 by Isett (Relating to the employment of Medicaid recipients and to the enrollment of Medicaid recipients and state child health plan enrollees in certain group health benefit plans.), As Engrossed ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * HB3038, As Engrossed: positive impact of $586,189 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 Net Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2002 $79,306 * * 2003 506,883 * * 2004 1,361,358 * * 2005 3,180,606 * * 2006 3,448,606 * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Probable Probable Probable * * Year Savings/(Cost) Savings/(Cost) Savings/(Cost) Savings/(Cost) * * from GR Match from GR Match from Medicaid from Medicaid * * for Medicaid for Medicaid Federal Funds - Federal Funds - * * 0758 0758 Federal Federal * * 0555 0555 * * 2002 $(104,673) $190,083 $(146,856) $287,512 * * 2003 (515,162) 925,535 (719,842) 1,392,939 * * 2004 (1,617,117) 2,905,452 (2,258,855) 4,370,912 * * 2005 (3,821,713) 6,866,419 (5,338,322) 10,329,721 * * 2006 (4,080,372) 7,323,162 (5,699,628) 11,016,838 * *************************************************************************** *************************************************************************** *Fiscal Probable Probable Probable Probable * * Year Savings/(Cost) Savings/(Cost) Savings/(Cost) Savings/(Cost) * * from Tobacco from Tobacco from CHIP from CHIP * * Match for CHIP Match for CHIP Federal Funds - Federal Funds - * * (Article II - (Article II - Federal Federal * * Permanent Permanent 0555 0555 * * Funds) Funds) * * 8025 8025 * * 2002 $(6,104) $0 $(15,806) $0 * * 2003 (34,464) 130,974 (123,042) 336,623 * * 2004 (117,515) 190,538 (419,545) 489,712 * * 2005 (118,499) 254,399 (423,059) 653,846 * * 2006 (118,499) 324,315 (423,059) 833,538 * *************************************************************************** Fiscal Analysis The bill would provide for the health insurance premium payment reimbursement program. The bill would require the Texas Department of Health (TDH) to identify children, otherwise eligible for Medicaid or the Children's Health Insurance Program (CHIP), who are eligible to enroll in a group health benefit plan. TDH, under the direction of HHSC, would determine if it is cost-effective for the child to enroll in the group benefit plan. In cases of cost-effectiveness, TDH would pay the employee's share of premiums, deductibles, and co-payments. TDH may pay the premium for the child's parent if it is cost-effective and the child cannot otherwise be enrolled in the plan. The bill would require the issuer of a group health benefit plan to allow a child who is participating in the proposed program to enroll in the plan regardless of the enrollment period, upon written notice from TDH. These provisions of the bill would be effective on August 31, 2001. The bill would be effective September 1, 2001. Methodology 1. It is assumed beginning in March 2002, there would be 200 new Medicaid families and 50 new CHIP families in the program. Thereafter, participation would increase by 10% per month until there are 5,000 new Medicaid families and 318 new CHIP families in the program. 2a. For Medicaid families, TDH estimates the annual Medicaid cost savings per family is $3,668. The average monthly premium cost is $134 per family. There is an administrative fee of $29 per family per month. 2b. For CHIP families, there is an administrative fee of $29 per family per month. The average monthly premium cost is $125. HHSC estimates that by moving children with special health needs into private insurance, the risk pool of remaining CHIP clients would be reduced. HHSC assumes that the CHIP premiums for the remaining clients would be reduced .07% in FY 2003, .08% in FYs 2004 and 2005, and .09% in FY 2006. HHSC does not assume that cost-effectiveness will be calculated on an individual client or family basis. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies: 529 Health and Human Services Commission LBB Staff: JK, HD, AJ