| TO: | Honorable Patrick M. Rose, Chair, House Committee on Human Services |
| FROM: | John S. O'Brien, Director, Legislative Budget Board |
| IN RE: | HB2962 by Coleman (Relating to the administration and funding of and eligibility for the child health plan, medical assistance, and other programs.), Committee Report 1st House, Substituted |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2010 | ($12,511,928) |
| 2011 | ($30,741,066) |
| 2012 | ($32,854,815) |
| 2013 | ($32,067,086) |
| 2014 | ($30,879,503) |
| Fiscal Year | Probable (Cost) from General Revenue Fund 1 |
Probable (Cost) from GR Match For Title XXI 8010 |
Probable (Cost) from Premium Co-payments 3643 |
Probable (Cost) from Experience Rebates-CHIP 8054 |
|---|---|---|---|---|
| 2010 | ($2,121,680) | ($10,390,248) | ($11,088,890) | ($736,253) |
| 2011 | ($5,310,556) | ($25,430,510) | ($38,180,234) | ($1,935,328) |
| 2012 | ($5,772,147) | ($27,082,668) | ($49,919,600) | ($2,065,822) |
| 2013 | ($5,685,504) | ($26,381,582) | ($49,173,008) | ($2,010,753) |
| 2014 | ($5,554,629) | ($25,324,874) | ($47,981,788) | ($1,927,787) |
| Fiscal Year | Probable (Cost) from Vendor Drug Rebates-CHIP 8070 |
Probable (Cost) from Federal Funds 555 |
Probable Revenue Gain from Premium Co-payments 3643 |
Probable Revenue Gain from Experience Rebates-CHIP 8054 |
|---|---|---|---|---|
| 2010 | ($791,223) | ($30,291,545) | $11,088,890 | $736,253 |
| 2011 | ($2,071,893) | ($75,232,886) | $38,180,234 | $1,935,328 |
| 2012 | ($2,210,826) | ($80,280,649) | $49,919,600 | $2,065,822 |
| 2013 | ($2,151,891) | ($78,263,847) | $49,173,008 | $2,010,753 |
| 2014 | ($2,063,103) | ($75,222,505) | $47,981,788 | $1,927,787 |
| Fiscal Year | Probable Revenue Gain from Vendor Drug Rebates-CHIP 8070 |
|---|---|
| 2010 | $791,223 |
| 2011 | $2,071,893 |
| 2012 | $2,210,826 |
| 2013 | $2,151,891 |
| 2014 | $2,063,103 |
Section 1 requires the Health and Human Services Commission (HHSC) to increase income eligibility for CHIP from at or below 200 percent of the federal poverty level (FPL) to at or below 300 percent of FPL. It also increases the threshold at which an assets test may be established from 150 percent of FPL to 250 percent of FPL and increases allowable assets.
Sections 2 and 14 eliminate the review of income during the sixth month of enrollment currently required for families with income above 185 percent of FPL.
Section 3 maintains current cost sharing requirements for enrollees whose net family incomes are at or below 200 percent of FPL. The bill requires enrollees whose net family incomes are greater than 200 percent but not greater than 300 percent of FPL to pay a share of the cost through copayments, fees, and a portion of the plan premium. The bill requires the total amount of the share to be paid by enrollees with net family income greater than 200 percent but not greater than 300 percent of FPL to include a portion of the plan premium set at an amount that is approximately equal to 2.5 percent of an enrollee's net family income, to exceed the amount required to be paid by those with net family incomes at or below 200 percent of FPL but not to exceed five percent of an enrollee's net family income, and to increase incrementally as an enrollee’s net family incomes increases. The bill requires HHSC to ensure that the cost paid by enrollees with net family income greater than 200 percent but not greater than 300 percent of FPL progressively increases as the number of children in the enrollee’s family provided coverage increases. The bill requires HHSC to develop an option for an enrollee to pay monthly premiums using direct debits to bank accounts or credit cards.
Section 4 provides that the waiting period for enrollment for a child whose net family income is greater than 200 percent but not greater than 300 percent of FPL is 180 days and applies to a child covered by a health benefits plan at any time during the 180 days before the date of application for coverage. It maintains the current waiting period of 90 days for a child whose net family income is at or below 200 percent of FPL.
Section 5 requires the executive commissioner of HHSC to develop and implement a buy-in option under which children whose net family income exceeds 300 percent of FPL, but does not exceed 400 percent FPL, are eligible to purchase health benefits coverage similar to coverage available under CHIP. The bill would require HHSC to adopt rules governing the option that establish eligibility requirements, including a requirement that a child must lack access to adequate health benefits through an employer-sponsored group health benefits plan; ensure that premiums are set at a level designed to cover the costs of coverage for children participating in the buy-in option and progressively increase as the number of children in the enrollee’s family provided coverage increases; require payment of 100 percent of the health benefits plan premium, fees to offset administrative costs, and additional deductibles, coinsurance, or other cost-sharing payments as determined by the executive commissioner; provide for a waiting period comparable to that for CHIP; and include an option for an enrollee to pay monthly premiums using direct debits. The bill would require the rules governing the option to provide that a child is eligible for coverage under the option if the child was eligible for and enrolled in CHIP, but enrollment was not renewed because, at the time of the eligibility redetermination, the child’s net family income exceeded the limit for determining eligibility. To the extent allowed by federal law, the buy-in option would be required to include provisions designed to discourage crowd-out. The bill would require HHSC to establish point-of-service copayments for the buy-in option that are higher than those required for a child whose net family income is at or below 300 percent FPL. The bill would require HHSC to include a lock-out period for the buy-in option.
Section 6 adds child support payments to the expenses that are deducted from family income for the purpose of determining income eligibility for CHIP.
Sections 7, 11, and 12 require HHSC (for purposes of determining whether a child or family meets family income and resource requirements for CHIP, Temporary Assistance for Needy Families, or Medicaid) to exclude the value of certain college savings plan assets and benefits. The value of such assets would also be excluded for purposes of determining the amount of financial assistance granted under Temporary Assistance for Needy Families (TANF). The value of such assets could be considered for purposes of determining eligibility for Medicaid on the basis of an applicant's eligibility for medical assistance for the aged, blind, or disabled under 42 U.S.C. Section 1396a(10).
Section 8 requires HHSC to improve the effectiveness of community outreach efforts with respect to the TANF, Medicaid, CHIP, and Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) benefits programs.
Section 9 requires HHSC to take all actions necessary to qualify the state for the temporary increases in the Medicaid Federal Medical Assistance Percentage (FMAP) and Disproportionate Share Hospital (DSH) allotment authorized in the American Recovery and Reinvestment Act of 2009.
Section 10 requires HHSC to apply a prospective payment system in providing CHIP coverage for services provided through rural health clinics and federally-qualified health centers.
Section 13 would require HHSC to develop, by rule and not later than September 1, 2010, a strategic plan designed to intensify community outreach and education relating to the availability of CHIP and Medicaid benefits and reduce paperwork and other administrative burdens associated with determining eligibility and processing enrollment, and to implement the plan not later than September 1, 2011.
Section 14 also eliminates HHSC’s authority to establish certain prescription drug limits in CHIP.
Section 15 requires the executive commissioner of HHSC to adopt rules, no later than January 1, 2010, as necessary to implement the buy-in option in section 5.
Section 16 provides that the changes in law made by the bill would apply to an initial determination of eligibility or a recertification of eligibility for CHIP, TANF, Medicaid, or SNAP made on or after September 1, 2009.
Section 17 requires state agencies to request any federal waiver or authorization necessary to implement any provisions of the bill and authorizes them to delay implementation until the waivers or authorizations are granted.
Sections 1, 2, 3, 4, 6, and 14: It is assumed that it will take three months for the agency to obtain the necessary waivers and authorizations and to perform the required start-up activities to implement the provisions found in these sections. It is assumed that beginning December 1, 2009 clients between 200 and 300 percent of FPL will begin enrolling in CHIP. It is assumed that monthly cost-sharing will be established in the amount of $30 per child for families between 200 and 250 percent of FPL and $40 per child for families between 250 and 300 percent FPL. Due to substantial variation in income and family size, actual monthly cost-sharing amounts could vary substantially resulting in an increase or decrease in the proportion of the program that is funded through Premium Copayments; the level of cost-sharing required could also affect program enrollment. It is assumed that beginning December 1, 2009, income reviews during the sixth month of enrollment will be eliminated, child-support expenses will be excluded from income, the revised assets test will apply only to families with income above 250 percent FPL, and a waiting period of 180 days will apply to certain recipients above 200 percent of FPL. All other costs and program policies are maintained at the level assumed for children at or below 200 percent of FPL.
Federal law currently caps income eligibility for CHIP at 50 percentage points above the highest limit for children enrolled in Medicaid; in
It is estimated that the cumulative impact of the policy changes included in these sections would result in an additional 31,539 average monthly recipient months in fiscal year 2010; 82,903 in fiscal year 2011; 88,494 in fiscal year 2012; 86,135 in fiscal year 2013; and 82,581 in fiscal year 2014. The average cost per recipient month is estimated to be $129.69 in each fiscal year. The additional cost to the program from higher caseloads would be $49.1 million All Funds, including $22.9 million in General Revenue Funds, in fiscal year 2010; $129.0 million All Funds, including $61.2 million in General Revenue Funds, in fiscal year 2011; $137.7 million All Funds, including $65.4 million in General Revenue Funds, in fiscal year 2012; $134.1 million All Funds, including $63.6 million in
General Revenue Funds, in fiscal year 2013; and $128.5 million All Funds, including $60.9 million in General Revenue Funds in fiscal year 2014. These General Revenue Funds amounts include expenditure of additional collections of Vendor Drug Rebates for CHIP, Experience Rebates, and Premium Copayments totaling $12.6 million in fiscal year 2010, $34.6 million in fiscal year 2011, $37.1 million in fiscal year 2012, $36.0 million in fiscal year 2013, and $34.4 million in fiscal year 2014.
There would also be additional administrative expenditures associated with the expanded program estimated to be $4.5 million All Funds, including $1.3 million in General Revenue Funds, in fiscal year 2010; $7.2 million All Funds, including $2.1 million in General Revenue Funds, in fiscal year 2011; $7.7 million All Funds, including $2.2 million in General Revenue Funds, in fiscal year 2012; $7.5 million All Funds, including $2.1 million in General Revenue Funds, in fiscal year 2013; and $7.2 million All Funds, including $2.1 million in General Revenue Funds, in fiscal year 2014. These amounts include one-time costs for system changes and policy implementation and ongoing costs for eligibility and enrollment broker services and postage.
The total cost of these sections is estimated to be $53.6 million All Funds, including $24.2 million in General Revenue Funds, in fiscal year 2010 rising to $135.7 million All Funds, including $63.0 million in General Revenue Funds, by fiscal year 2014. It is assumed that CHIP federal matching funds will be available; however, if the state exhausts its capped federal allotment, General Revenue Funds would be required in lieu of assumed Federal Funds.
Sections 5 and 15: It is assumed that it will take a year for the agency to obtain the necessary waivers and authorizations and to perform required start-up activities. It is assumed that client services will begin September 1, 2010. Although the bill indicates that children ineligible for renewal in the CHIP program due to income would be eligible for the buy-in program, eligibility is not limited to these children.
It is estimated that the buy-in program would take a year to reach full caseload resulting in 3,490 average monthly recipient months in fiscal year 2011; 7,848 in fiscal year 2012; 7,940 in fiscal year 2013; and 8,048 in fiscal year 2014. It is assumed that the requirement that enrollees pay 100 percent of premiums as well as additional costs would limit enrollment resulting in a program that is likely to serve clients with higher health care needs, resulting in an average cost per recipient month that exceeds that of the CHIP program. The average cost per recipient month is assumed to be $181.57 in each fiscal year, but could be substantially different depending on program enrollment. The client services cost of the program is estimated to be $7.6 million in fiscal year 2011, $17.1 million in fiscal year 2012, $17.3 million in fiscal year 2013, and $17.5 million in fiscal year 2014. It is assumed that the client services portion of the program will be funded entirely through collection of Premium Copayments.
Administrative expenditures associated with the buy-in program are estimated to be $1.8 million All Funds, including $0.9 million in General Revenue Funds, in fiscal year 2010; $0.4 million All Funds, including $0.2 million in General Revenue Funds, in fiscal year 2011 and $0.9 million All Funds, including $0.4 million in General Revenue Funds, in fiscal year 2012 and subsequent years. These amounts include one-time costs for system changes and policy implementation and ongoing costs for eligibility and enrollment broker services, postage, and collection of premiums. It is assumed that matching federal funds will be available at the Medicaid administrative 50/50 match.
The total cost of these sections is estimated to be $1.8 million All Funds, including $0.9 million in General Revenue Funds, in fiscal year 2010 rising to $18.4 million All Funds, including $18.0 million in General Revenue Funds, by fiscal year 2014. These General Revenue amounts include expenditure of collected Premium Copayments.
Sections 7, 11, and 12: It is assumed that the number of persons applying for assistance under any of these programs who hold such assets would be so small that the fiscal impact to the state would not be significant.
Sections 8 and 13: HHSC indicates they are currently spending $5.9 million annually on outreach for children’s Medicaid and CHIP and $1.0 million annually for application assistance. They assume outreach as described by the bill would require a 50 percent increase in outreach expenditures and a doubling of funding for application assistance. It is assumed that implementation of the plan would begin in fiscal year 2011 at a cost of $4.0 million All Funds, including $1.9 million in General Revenue Funds each year. While these actions may result in an increase in caseload for these programs, and therefore an additional cost to the state for client services, no impact is included in this cost estimate.
Section 9: It is assumed this section will have no fiscal impact.
Section 10: HHSC indicates this prospective payment system is already required under current federal law.
The total cost of the bill is estimated to be $55.4 million All Funds, including $25.1 million in General Revenue Funds, in fiscal year 2010 increasing to $158.1 million All Funds, including $82.9 million in General Revenue Funds, by fiscal year 2014.
| Source Agencies: | 529 Health and Human Services Commission
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| LBB Staff: | JOB, CL, JJ, LR
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