| TO: | Honorable Patrick M. Rose, Chair, House Committee on Human Services |
| FROM: | John S. O'Brien, Director, Legislative Budget Board |
| IN RE: | HB1142 by Turner (Relating to the exclusion of certain costs from income and resources in determining eligibility for Medicaid.), As Introduced |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2008 | ($464,781) |
| 2009 | ($56,429,186) |
| 2010 | ($61,688,129) |
| 2011 | ($67,356,652) |
| 2012 | ($73,522,983) |
| Fiscal Year | Probable Revenue Gain from VENDOR DRUG REBATES-MEDICAID 706 |
Probable (Cost) from VENDOR DRUG REBATES-MEDICAID 706 |
Probable (Cost) from GR MATCH FOR MEDICAID 758 |
Probable Revenue Gain from Vendor Drug Rebates-Sup Rebates 8081 |
|---|---|---|---|---|
| 2008 | $0 | $0 | ($464,781) | $0 |
| 2009 | $3,572,648 | ($3,572,648) | ($56,429,186) | $833,233 |
| 2010 | $4,127,645 | ($4,127,645) | ($61,688,129) | $962,673 |
| 2011 | $4,822,262 | ($4,822,262) | ($67,356,652) | $1,124,675 |
| 2012 | $5,635,167 | ($5,635,167) | ($73,522,983) | $1,314,265 |
| Fiscal Year | Probable (Cost) from Vendor Drug Rebates-Sup Rebates 8081 |
Probable (Cost) from FEDERAL FUNDS 555 |
|---|---|---|
| 2008 | $0 | ($464,781) |
| 2009 | ($833,233) | ($91,404,841) |
| 2010 | ($962,673) | ($100,334,783) |
| 2011 | ($1,124,675) | ($110,138,826) |
| 2012 | ($1,314,265) | ($120,910,005) |
The bill would add a new requirement to Medicaid eligibility to disregard income related to electric utility payments when determining eligibility.
Section one of the bill would add a new Sec. 32.0252, Human Resources Code, requiring the Health and Human Services Commission (HHSC), to the extent allowed by federal law, to disregard from the monthly income and resources of a Medicaid applicant an amount equal to the average amount charged for electric utility services, billed in the applicant's name and for the applicant's residence, during the three months preceding the date of the application.
Section two of the bill would instruct HHSC to apply the new provision to eligibility determinations made after the effective date of the Act.
Section three of the bill would instruct HHSC to apply for any required federal waiver or approval and authorize HHSC to delay implementing the provisions pending the receipt of required approval.
The bill would take effect on September 1, 2007.
HHSC estimates a cost related to serving an increased number (two percent) of eligible persons in the acute care Medicaid program.
The Department of Aging and Disability Services (DADS) estimates a cost related to serving additional persons in the Community Attendant Services program.
Since HHSC would be required to obtain approval from the federal government through a Medicaid State Plan Amendment or waiver to implement provisions of the bill, as well as adopt rules and make eligibility system changes, it is assumed that the caseload impact would not begin until fiscal year 2009. The costs for automation changes are estimated by HHSC to be $929,561 in fiscal year 2008, which can be matched by the federal government at 50 percent.
HHSC assumes that the average utility bill (amount of excluded income) would be $100. Based on this, the agency estimates an increase in recipient months of the following for fiscal years 2009-2012: 60,512; 63,144; 65,902; and 68,796. The cost per recipient month is estimated to be $209.44 in fiscal year 2009, with a 5% growth trend applied in subsequent years. Multiplying caseload times cost times 12 months results in a client services impact of $152.1 million in fiscal year 2009, $166.6 million in fiscal year 2010, $182.6 million in fiscal year 2011, and $200.2 million in fiscal year 2012. The General Revenue share of these expenditures is approximately 40 percent in each fiscal year. Additionally, it is assumed that Vendor Drug Rebates and Supplemental Rebates will accrue and be expended by the Vendor Drug Program for prescription drugs. No full-time equivalents are assumed to be required.
DADS assumes that 32 additional clients would be eligible for the program for every $20 increase in excluded income. For a $100 exclusion amount, there would be 160 new recipients. However, DADS assumes a phase-in of the total clients, which is included in this cost estimate, for an average monthly caseload impact of 21 in fiscal year 2009, 61 in fiscal year 2010, 101 in fiscal year 2011, and 141 in fiscal year 2012. It is estimated that the total caseload impact of 160 would not occur until fiscal year 2013. The average monthly cost is assumed to be $626.24 in fiscal year 2009, with a 5 percent growth trend applied in subsequent years. Multiplying caseload times cost times 12 months results in a client services impact of $0.2 million in fiscal year 2009, $0.5 million in fiscal year 2010, $0.8 million in fiscal year 2011, and $1.2 million in fiscal year 2012. The General Revenue share of these expenditures is approximately 40 percent in each fiscal year. No full-time equivalents are assumed to be required.
| Source Agencies: | 529 Health and Human Services Commission, 539 Aging and Disability Services, Department of
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| LBB Staff: | JOB, CL, PP, MB
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