LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session March 20, 2001 TO: Honorable Mike Moncrief, Chair, Senate Committee on Health & Human Services FROM: John Keel, Director, Legislative Budget Board IN RE: SB895 by Moncrief (Relating to the creation of a state prescription drug program for certain Medicare beneficiaries.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB895, As Introduced: negative impact of $(234,167,021) 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 $(89,142,093) * * 2003 (145,024,928) * * 2004 (157,102,904) * * 2005 (170,962,900) * * 2006 (186,891,955) * **************************************************** All Funds, Five-Year Impact: ***************************************************** * Fiscal Year Probable Savings/(Cost) from * * General Revenue Fund * * 0001 * * 2002 $(89,142,093) * * 2003 (145,024,928) * * 2004 (157,102,904) * * 2005 (170,962,900) * * 2006 (186,891,955) * ***************************************************** Technology Impact The Department of Human Services (DHS) would require 5,000 hours of reprogramming at $110 an hour, and 50 hours of maintenance annually thereafter. Fiscal Analysis The bill would require the Health and Human Services Commission (HHSC) to develop and implement a state prescription drug program, similar to the Medicaid Vendor Drug Program. The program would serve qualified Medicare beneficiaries and specified low-income Medicare beneficiaries who are eligible for medical assistance for Medicare cost-sharing payments. The program would be state-funded. Cost-sharing would be prohibited. The bill would be effective September 1, 2001, but would require development and implementation not later than January 1, 2002. Methodology The Department of Health (TDH) estimates 89,386 clients in FY 2002, 97,004 in FY 2003, 105,083 in FY 2004, 114,354 in FY 2005, and 125,009 in FY 2006 in the proposed program. It is assumed the average cost per prescription is $74.60 and the average number of prescriptions per month per client is 1.67. It is also assumed the program would be implemented January 1, 2002. 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, AJ