LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 80TH LEGISLATIVE REGULAR SESSION
 
March 26, 2007

TO:
Honorable John T. Smithee, Chair, House Committee on Insurance
 
FROM:
John S. O'Brien, Director, Legislative Budget Board
 
IN RE:
HB1128 by Coleman (Relating to coverage of anorexia nervosa and bulimia nervosa as serious mental illnesses under certain group health benefit plans.), As Introduced



Estimated Two-year Net Impact to General Revenue Related Funds for HB1128, As Introduced: a negative impact of ($1,540,372) through the biennium ending August 31, 2009.

The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.



Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2008 $0
2009 ($1,540,372)
2010 ($1,718,107)
2011 ($1,836,598)
2012 ($1,955,088)




Fiscal Year Probable (Cost) from
GENERAL REVENUE FUND
1 		Probable (Cost) from
GR DEDICATED ACCOUNTS
994 		Probable (Cost) from
OTHER SPECIAL STATE FUNDS
998 		Probable (Cost) from
STATE HIGHWAY FUND
6
2008 $0 $0 $0 $0
2009 ($1,540,372) ($80,331) ($8,067) ($358,024)
2010 ($1,718,107) ($89,600) ($8,998) ($399,335)
2011 ($1,836,598) ($95,780) ($9,618) ($426,875)
2012 ($1,955,088) ($101,959) ($10,239) ($454,416)

Fiscal Year Probable (Cost) from
FEDERAL FUNDS
555
2008 $0
2009 ($340,465)
2010 ($379,750)
2011 ($405,939)
2012 ($432,129)

Fiscal Analysis

The bill would amend the Insurance Code to require coverage of anorexia nervosa and bulimia under certain group health benefit plans.  The bill would require the Sunset Advisory Commission, with the cooperation of the Texas Department of Insurance (TDI) to conduct a study.

The bill would take effect September 1, 2007, and would require that changes made by the bill would only apply to a group health benefit plan that is delivered, issued for delivery, or renewed on or after January 1, 2008.


Methodology

It is assumed the bill would require health plans administered by Employees Retirement System (ERS) to include coverage for anorexia and bulimia.  It is assumed ERS would incur costs for this coverage.  

Based on the analysis of ERS, it is assumed the prevalence of these illnesses for females is 0.3 percent for anorexia and 1.0 percent for bulimia and the prevalence for males is 10 percent of that for females.  It is assumed the treatment rate for these illnesses is 33.3 percent for anorexia and 6 percent for bulimia.  It is also assumed allowable charges of $50,000 for treament and that the amount paid for each patient would be 95 percent of allowable charges.  In addition, this analysis does not include costs related to coverage for treatment facilities because the bill does not appear to address this issue.

Based on the analysis of the Sunset Advisory Commission and TDI, it is assumed duties and responsibilties associated with conducting a study under the bill could be absorbed with existing resources.


Local Government Impact

Counties, municipalities, and other local government entities to which the bill would apply under the Local Government Code that either provide health insurance benefits for their employees and employees' dependents or participate in a group risk pool to provide insurance benefits could experience an increase in costs of negotiated health insurance contracts to include the additional coverage required by the bill.  Whether those amounts would be absorbed by the local entity or passed on to the insured employees or in what amounts would vary depending on decisions made by local government officials and number of employees covered.


Source Agencies:
116 Sunset Advisory Commission, 327 Employees Retirement System, 454 Department of Insurance
LBB Staff:
JOB, JRO, MW, SK