LEGISLATIVE BUDGET BOARD

Austin, Texas

FISCAL NOTE, 80TH LEGISLATIVE REGULAR SESSION

May 1, 2007

TO:	Honorable Patrick M. Rose, Chair, House Committee on Human Services
FROM:	John S. O'Brien, Director, Legislative Budget Board
IN RE:	HB1738 by Lucio III (Relating to a medical assistance buy-in program for children with Down syndrome or certain other disabilities.), Committee Report 1st House, Substituted

Estimated Two-year Net Impact to General Revenue Related Funds for HB1738, Committee Report 1st House, Substituted: a negative impact of ($22,164,433) 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.

General Revenue-Related Funds, Five-Year Impact:

Fiscal Year	Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2008	($1,076,768)
2009	($21,087,665)
2010	($45,526,790)
2011	($60,887,827)
2012	($65,156,158)

All Funds, Five-Year Impact:

Fiscal Year	Probable (Cost) from GR MATCH FOR MEDICAID 758	Probable (Cost) from FEDERAL FUNDS 555	Probable (Cost) from Cost Sharing - Medicaid Clients 8075	Probable Revenue Gain from Cost Sharing - Medicaid Clients 8075
2008	($1,076,768)	($1,076,768)	$0	$0
2009	($21,087,665)	($42,269,579)	($6,704,802)	$6,704,802
2010	($45,526,790)	($89,849,095)	($13,752,441)	$13,752,441
2011	($60,887,827)	($118,973,492)	($17,653,600)	$17,653,600
2012	($65,156,158)	($126,154,698)	($18,167,841)	$18,167,841

Fiscal Year	Change in Number of State Employees from FY 2007
2008	2.4
2009	12.0
2010	37.0
2011	53.0
2012	60.0

Fiscal Analysis

The bill would add Section 32.02491, Medical Assistance Buy-In Program for Children with Down Syndrome or Other Disabilities, to Subchapter B, Chapter 32 of the Human Resources Code.  It would require the Health and Human Services Commission (HHSC) to implement a Medicaid Buy-In program for certain children whose family incomes do not exceed 300 percent of the federal poverty level (FPL). This equals $49,800 for a family of three in fiscal year 2006.  The bill would require HHSC to adopt rules that require the agency to assess monthly premium payments on a sliding scale.

The bill would take effect September 1, 2007.

Methodology

For the purposes of this cost estimate, it is assumed that the program would include acute care and vendor drug services.  HHSC assumes that 1) children currently on Medicaid or CHIP are excluded from this estimate; 2) all age-groups would be eligible when the program starts (no phase-in by age group as allowed in the Deficit Reduction Act); 3) 50 percent of uninsured and 15 percent of insured will enroll (when fully implemented); and 4) the program will ramp up enrollment, with 40 percent of eligibles enrolled in fiscal year 2009, 80 percent in fiscal year 2010 and 100 percent in fiscal year 2011.  The first year impact includes staffing and one-time costs related to automation, training and policy updates.  The caseload impact would be 5,102 in fiscal year 2009, 10,280 in fiscal year 2010, 12,949 in fiscal year 2011 and 13,064 in fiscal year 2012. 

Cost estimates are assumed to be $13,551 in fiscal year 2009 for acute care services, with a 5 percent growth trend applied in subsequent years.  The cost is based on the cost to serve disabled and blind individuals in the Medicaid program currently.  Multiplying caseload times cost results in a total of $69.1 million in fiscal year 2009 and $146.3 million in fiscal year 2010, $193.4 million in fiscal year 2011, and $204.9 million in fiscal year 2012.   It is assumed that the premium payments collected by HHSC would be expended by the program, providing an offset to the cost.  These cost sharing payments are reflected above.  Note that HHSC assumes no cost-sharing for families under 150 percent FPL.

In addition, HHSC states they would require the following FTEs to perform disability assessments: 2.4 FTEs in fiscal year 2008, 12.0 FTEs in fiscal year 2009, 37.0 FTEs in fiscal year 2010, 53.0 FTEs in fiscal year 2011, and 60.0 FTEs in fiscal year 2012. 

Costs for services are assumed to be matched with approximately 60 percent federal funds; costs for administrative functions are assumed to be matched with 50 percent federal funds.

The Department of Aging and Disability Services (DADS) would make automation changes to reflect the new Medicaid program for eligible recipients who may receive waiver services; these costs can be absorbed using existing resources.  The potential cost of waiver services is not included at this time.

Technology

HHSC estimates a technology impact related to automation changes of $1.9 million in fiscal year 2008.  DADS estimates a cost of $12,300 for programming costs in fiscal year 2008 only.  These costs would be matched by the federal government at 50 percent.

Local Government Impact

No fiscal implication to units of local government is anticipated.

Source Agencies:

529 Health and Human Services Commission, 539 Aging and Disability Services, Department of

LBB Staff:

JOB, SD, CL, PP, MB