LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
March 6, 2001
TO: Honorable Mike Moncrief, Chair, Senate Committee on
Health & Human Services
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB374 by Moncrief (Relating to continuous eligibility of
children for medical assistance.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB374, As Introduced: negative impact of $(249,538,131) 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 $(104,553,004) *
* 2003 (144,985,127) *
* 2004 (151,163,627) *
* 2005 (157,619,967) *
* 2006 (164,385,287) *
****************************************************
All Funds, Five-Year Impact:
***********************************************************************
*Fiscal Probable Probable Probable Probable Change in *
* Year Savings/ Savings/ Savings/ Savings/ Number of *
* (Cost) from (Cost) from (Cost) from (Cost) from DHS *
* GR Match GR Match Federal Federal Employees *
* for for Funds - Funds - from FY 2001 *
* Medicaid Medicaid Federal Federal *
* 0758 0758 0555 0555 *
* 2002 $7,111,754 $7,111,754 (461.0) *
* $(111,664, $(168,899, *
* 758) 960) *
* 2003 9,964,839 9,964,839 (646.0) *
* (154,949, (233,201, *
* 966) 251) *
* 2004 10,428,400 10,428,400 (676.0) *
* (161,592, (243,096, *
* 027) 245) *
* 2005 10,917,387 10,917,387 (708.0) *
* (168,537, (253,544, *
* 354) 675) *
* 2006 11,431,608 11,431,608 (741.0) *
* (175,816, (264,495, *
* 895) 890) *
***********************************************************************
Fiscal Analysis
The bill would provide continuous eligibility for 12 months for a child
under the age of 19, with recertification performed either annually or
before the child's 19th birthday. The bill would take effect September
1, 2001, requiring that rules for continuous eligibility be adopted by
the appropriate state Medicaid agency by October 1, 2001.
Methodology
The policy change would impact the Department of Health (TDH), the
Department of Human Services (DHS), and the Employees Retirement System
(ERS). It is assumed that funding would be realigned among state
agencies as needed, with implementation occurring January 2002. No costs
related to automation are assumed. Medicaid services provided by TDH
would include premiums (weighted for fee for service and managed care),
prescriptions, dental, physician, hospital, laboratory and other
services. Client costs would remain at the estimated FY 2001 level, with
no adjustment for inflation or change in service utilization. (Average
costs do vary according to the mixture of client risk groups.) The
federal share of total client services expenses would be 60.20% in FY
2002, 60.08% in FY 2003, and 60.07% in subsequent years. Annual
savings/costs per eligibility-related FTE at DHS would total
approximately $30,850. Of this amount, 19% is for employee benefits
funded at ERS. The federal share of FTE expenses would be 50% of the
total.
It is assumed that clients would receive an additional 3.82 months of
coverage, increasing recipient months per month by 170,179 in FY 2002,
238,451 in FY 2003, 249,544 in FY 2004, 261,245 in FY 2005, and 273,550
in FY 2006. Monthly client services costs would range from $137.39 in
FY 2002 to $134.14 in FY 2006. Replacing the current 6 month review
with an annual review would result in an FTE reduction totaling 461.0 in
FY 2002, 646.0 in FY 2003, 676.0 in FY 2004, 708.0 in FY 2005, and 741.0
in FY 2006.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 529 Health and Human Services Commission, 324
Texas Department of Human Services, 501 Texas
Department of Health
LBB Staff: JK, HD, PP, SW