Honorable James B. Frank, Chair, House Committee on Human Services
FROM:
John McGeady, Assistant Director Sarah Keyton, Assistant Director Legislative Budget Board
IN RE:
HB342 by Cortez (Relating to the period of continuous eligibility for the medical assistance program.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB342, As Introduced: a negative impact of ($5,834,549) through the biennium ending August 31, 2021.
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
2020
($164,522)
2021
($5,670,027)
2022
($6,401,543)
2023
($7,113,149)
2024
($7,515,219)
Fiscal Year
Probable Savings/(Cost) from GR Match For Medicaid 758
Probable (Cost) from Federal Funds 555
Probable Revenue Gain from General Revenue Fund 1
Probable Revenue Gain from Foundation School Fund 193
2020
($164,522)
($315,078)
$0
$0
2021
($5,797,106)
($8,805,578)
$95,309
$31,770
2022
($6,922,888)
($10,505,955)
$391,009
$130,336
2023
($7,438,594)
($11,293,752)
$244,084
$81,361
2024
($7,858,744)
($11,931,838)
$257,644
$85,881
Fiscal Analysis
The bill would require 12 months continuous eligibility for children enrolled in Medicaid.
Methodology
The federal Patient Protection and Affordable Care Act (PPACA) established a 12-month certification period for children enrolled in Medicaid. The period of eligibility may still be less than 12 months if the state becomes aware of ineligibility through means other than requiring a person to renew eligibility (for example, self report or other third party income information). This estimate assumes that the provisions of the bill related to 12 months continuous eligibility for children would prevent the state from terminating coverage based on this kind of information.
According to the Health and Human Services Commission (HHSC), system changes and modification of rules would occur in fiscal year 2020 at a cost of $0.5 million in All Funds, including $0.2 million in General Revenue. 12-months continuous eligibility would be effective September 1, 2020.
The increase to average monthly children's caseload is estimated to be 6,053 in fiscal year 2021, increasing in each subsequent year to 7,148 in fiscal year 2024. The average monthly cost per child is estimated to be $201.04 in fiscal year 2021 increasing in each subsequent year to $225.42 by fiscal year 2024. The estimated increased cost to client services would be $14.6 million in All Funds, including $5.8 million in General Revenue, in fiscal year 2021 increasing in each subsequent year to $19.8 million in All Funds, including $7.9 million in General Revenue, in fiscal year 2024.
The increases in client services payments through managed care are assumed to result in an increase to insurance premium tax revenue, estimated as 1.75 percent of the increased managed care expenditures. Revenue is adjusted for assumed timing of payments and prepayments resulting in assumed increased collections of $0.1 million in fiscal year 2021, $0.5 million in fiscal year 2022, $0.3 million in fiscal year 2023, and $0.3 million in fiscal year 2024. Pursuant to Section 227.001(b), Insurance Code, 25 percent of the revenue is assumed to be deposited to the credit of the Foundation School Fund.
Technology
According to the Health and Human Services Commission, there would be a one-time cost in fiscal year 2020 of $479,600 in All Funds, including $164,522 in General Revenue Funds, for modifications to the Texas Integrated Eligibility Redesign System (TIERS).
Local Government Impact
No significant fiscal implication to units of local government is anticipated.