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:
HB1438 by Oliveira (Relating to health benefit plan coverage for certain tests for the early detection of cardiovascular disease.), As Introduced



Estimated Two-year Net Impact to General Revenue Related Funds for HB1438, 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 ($1,599,617)
2011 ($1,658,862)
2012 ($1,718,107)




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 ($1,599,617) ($83,421) ($8,377) ($371,795)
2011 ($1,658,862) ($86,511) ($8,687) ($385,565)
2012 ($1,718,107) ($89,600) ($8,998) ($399,335)

Fiscal Year Probable (Cost) from
FEDERAL FUNDS
555
2008 $0
2009 ($340,465)
2010 ($353,560)
2011 ($366,655)
2012 ($379,750)

Fiscal Analysis

The bill would amend the Insurance Code to require health benefit plans to provide coverage for certain cardiovascular screening medical procedures. 

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


Methodology

Based on the analysis of the Employees Retirement System of Texas (ERS), it is assumed the bill would require the health benefit plans administered by ERS to expand coverage for cardiovascular screening medical procedures and would result in these health benefit plans incurring costs in the amounts specified in the tables above.

Based on the analysis of the Teacher Retirement System (TRS), it is assumed the bill would increase medical claims in the TRS-ActiveCare plan by an estimated $5.5 million in fiscal year 2008 and in every fifth year following fiscal year 2008 and $55,000 in all other fiscal years.  Because the TRS-ActiveCare program is self-funded, the claims increase would have no net fiscal impact on the state, but would result in increases in plan premiums of an estimated $6 to $7 per year per employee.

TRS estimates that the bill would cause an increase in claims in the TRS-Care of $12.9 million in fiscal year 2008 and in every fifth year following fiscal year 2008 and $330,000 in all other fiscal years.  To the extent that balances in the TRS-Care trust fund are insufficient to cover these additional costs, premium increases could be necessary.

Based on the analysis the Texas Department of Insurance (TDI), it is assumed that there would be a one-time revenue gain of $25,600 in the General Revenue Dedicated Account Fund 36 in fiscal year 2008 because the bill would result in 256 filings, each accompanied by a $100 filing fee.  Since General Revenue Dedicated Account Fund 36 is a self-leveling account, this analysis assumes all revenue generated would go toward fund balances or the maintenance tax would be set to recover a lower level of revenue the following year.  Since General Revenue Dedicated Account Fund 36 is a self-leveling account, no revenue impacts to this account are included in the table above.  It is also assumed that any costs that may be realized by TDI from implementing the provisions of the bill could be absorbed within 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:
323 Teacher Retirement System, 327 Employees Retirement System, 454 Department of Insurance
LBB Staff:
JOB, JRO, MW, SK