LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 10, 2001
TO: Honorable Patricia Gray, Chair, House Committee on Public
Health
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.), Committee Report 1st House,
Substituted
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB3038, Committee Report 1st House, Substituted: 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. *
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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 *
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All Funds, Five-Year Impact:
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*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 *
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*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 *
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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