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March 23, 2022 HB 22-1289
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 22-0487
Rep. Gonzales-Gutierrez;
McCluskie
Sen. Moreno
Date:
Bill Status:
Fiscal Analyst:
March 23, 2022
House Health & Insurance
Erin Reynolds | 303-866-4146
Erin.Reynolds@state.co.us
Bill Topic: HEALTH BENEFITS FOR CO LORADO CHILDREN & PREGNANT PERSONS
Summary of
Fiscal Impact:
☐ State Revenue
☒ State Expenditure
☐ State Transfer
☐ TABOR Refund
☒ Local Government
☒ Statutory Public Entity
The bill expands Medicaid coverage to low-income pregnant people and children,
regardless of immigration status; requires the Insurance Commissioner to improve the
quality of health insurance coverage through the Health Insurance Affordability
Enterprise; and extends a survey of birthing parents indefinitely, among other
requirements. It will increase state, local, and statutory public entity expenditures on
an ongoing basis beginning in FY 2022-23.
Appropriation
Summary:
For FY 2022-23, the bill requires an appropriation of $6.9 million to the Departments
of Health Care Policy and Financing, Public Health and Environment, and Human
Services.
Fiscal Note
Status:
This fiscal note reflects the introduced bill. This analysis is preliminary, specifically
regarding IT costs, and will be updated following further review and receipt of
additional information.
Table 1
State Fiscal Impacts Under HB 22-1289
Budget Year
FY 2022-23
Out Year
FY 2023-24
Out Year
FY 2024-25
Out Year
FY 2025-26
Revenue
- - - -
Expenditures General Fund $4,200,181 $9,010,646 $8,663,009 $6,525,310
Federal Funds $2,756,608 $9,510,447 $11,467,998 $10,146,126
Centrally Appropriated $175,327 $219,440 $235,596 $227,518
Total Expenditures $7,132,115 $18,740,533 $20,366,603 $16,898,954
Total FTE 9.9 FTE 12.2 FTE 13.2 FTE 12.7 FTE
Transfers - -
Other Budget General Fund Reserve $630,027 $1,351,597 $1,299,451 $978,796
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March 23, 2022 HB 22-1289
Summary of Legislation
The bill expands Medicaid coverage to low-income pregnant people and children, regardless of
immigration status; requires the Insurance Commissioner to improve the quality of health insurance
coverage through the Health Insurance Affordability Enterprise; and extends a survey of birthing
parents indefinitely, among other requirements, as discussed below.
Health Care Policy and Financing. The Department of Health Care Policy and Financing (HCPF)
is required to provide comprehensive health insurance coverage for low-income pregnant people and
children (age 0 to 18) who would be eligible for Medicaid and/or the Children's Basic Health Plan
(CHP+) if not for their immigration status. For pregnant persons, coverage continues for 12-months
postpartum at the CHP+ federal matching rate. HCPF is required to report on the cost savings
and health benefits associated with state medical assistance at its SMART Act hearing beginning
January 2024.
HCPF is also required to:
make comprehensive lactation support services, breastfeeding equipment (including a double
electric breast pump, pump parts, and breast milk storage supplies), maintenance, and equipment
a covered benefit for Medicaid and CHP+ recipients;
draw down federal health services initiative funding to improve perinatal and postpartum
support after completing a stakeholder process to determine funding priorities;
establish an outreach program to address enrolling eligible groups into insurance options,
including mandatory translation requirements, and to report on outreach and enrollment strategy
outcomes by conducting a stakeholder process approximately one and two years after
implementation; and
pursue a demonstration waiver that authorizes the state to use federal medical assistance
payments to enhance state subsidization of health insurance for low-income Coloradans and, if
needed to maximize federal financial participation, for people living in Colorado that were victims
of torture receiving state medical assistance pursuant to House Bill 22-1094, if passed.
Division of Insurance, Department of Regulatory Agencies. The bill requires the Insurance
Commissioner to establish coverage requirements through rule for state-subsidized individual health
plans to be equivalent to coverage provided in a qualified health plan and maximize affordability,
along with other specified requirements to be addressed through rule by the Health Insurance
Affordability Board. Additionally, beginning January 1, 2024, the bill establishes a special insurance
enrollment period for eligible persons to receive insurance when they become pregnant.
Department of Public Health and Environment. The bill makes permanent a Department of Public
Health and Environment (CDPHE) health survey for birthing parents and requires the survey to
oversample members of groups that comprise a small percentage of the population and that
disproportionately experience health inequities.
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March 23, 2022 HB 22-1289
State Expenditures
The bill increases state General Fund and federal funds expenditures beginning in FY 2022-23 in
HCPF, the CDPHE, and the Department of Human Services (CDHS) as shown in Table 2. It will also
increase workload and potential costs in the DOI. These impacts are detailed below.
Table 2
Expenditures Under HB 22-1289
Cost Components FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26
Department of Health Care Policy and Financing
Personal Services $649,976 $866,638 $935,073 $900,855
Operating Expenses $10,530 $12,825 $14,175 $13,500
Capital Outlay Costs $62,000 - - -
Service Costs
(see Table 3) $17,424 $16,037,852 $32,999,249 $33,982,478
Service Savings (see Table 3) - ($5,046,187) ($20,435,685) ($20,700,316)
MMIS Programming $3,825,742 $4,350,070 $4,371,552 $915,748
CBMS Programming $676,490 $687,303 $698,337 -
Actuarial Contractor $250,000 - - -
Outreach Costs $750,000 $750,000 $750,000 $750,000
County Support $125,000 $263,659 $189,022 $189,022
Centrally Appropriated Costs
1
$132,467 $172,955 $189,111 $181,033
FTE – Personal Services 7.4 FTE 9.5 FTE 10.5 FTE 10.0 FTE
HCPF Subtotal $6,499,629 $18,095,115 $19,710,835 $16,232,320
General Fund $3,610,554 $8,411,712 $8,053,726 $5,905,161
Federal Funds $2,756,608 $9,510,447 $11,467,998 $10,146,126
Centrally Appropriated $132,467 $172,955 $189,111 $181,033
Department of Public Health and Environment
Personal Services $198,560 $216,611 $216,611 $216,611
Operating Expenses $3,645 $3,645 $3,645 $3,645
Capital Outlay Costs $18,600 - - -
Survey Materials and Postage $34,403 $36,124 $37,930 $39,826
Software and Licenses $6,207 $6,232 $6,259 $6,287
Participant Incentives $162,211 $170,322 $178,838 $187,780
Centrally Appropriated Costs
1
$42,860 $46,485 $46,485 $46,485
FTE – Personal Services 2.5 FTE 2.7 FTE 2.7 FTE 2.7 FTE
CDPHE Subtotal $466,486 $479,419 $489,768 $500,634
Department of Human Services
Computer Programming $166,000 $166,000 $166,000 $166,000
DHS Subtotal $166,000 $166,000 $166,000 $166,000
Total $7,132,115 $18,740,533 $20,366,603 $16,898,954
Total FTE 9.9 FTE 12.2 FTE 13.2 FTE 12.7 FTE
1
Centrally appropriated costs are not included in the bill's appropriation. Page 4
March 23, 2022 HB 22-1289
Department of Health Care Policy and Financing. Starting in FY 2022-23, HCPF will incur ongoing
staffing, information technology, outreach, and county administration costs to implement the
insurance program. New services for breastfeeding parents also begin in FY 2022-23. Starting in
FY 2023-24, non-citizen pregnant people and children will be enrolled under the Medicaid and CHP+
lookalike programs, and non-citizens who currently qualify for Emergency Medical Services under
Medicaid will instead be served by a new DOI-designed plan. These costs are discussed in more detail
below and Table 3 details service costs and savings.
Staffing. Beginning in FY 2022-23, HCPF requires 9.5 FTE as follows: 1.0 FTE to manage changes
to the Medicaid Management Information System (MMIS); 1.0 FTE to manage system changes to
the Colorado Benefits Management System (CBMS); 1.0 FTE to provide eligibility systems policy
analysis; 1.0 FTE to develop and implement eligibility system training; 1.0 FTE policy advisor to
coordinate system requirements for Emergency Medical Services; 1.0 FTE to coordinate the
state-only CHP+ benefit plan and the health services initiative application process; 1.0 FTE for
compliance and stakeholder engagement; 1.0 FTE for outreach; 0.5 FTE for rate-setting and
accounting; and 1.0 FTE for centralized financial support. In addition, HCPF requires 1.0 FTE
business analyst for 18 months starting July 1, 2024, to provide pharmacy system change
management and operational monitoring. Operating and capital outlay expenses for this staff are
shown in Table 2 above. First-year costs are prorated for the General Fund pay date shift and a
September 1 start date.
MMIS and CBMS programming. Systems programming costs represent vendor estimates and
staffing costs to modify both the MMIS and the CBMS. These costs are primarily driven by
systems modifications required for non-citizen children, and preliminary.
Actuarial contractor. HCPF's actuary will perform a one-time rate assessment in FY 2022-23.
Outreach costs. Outreach costs assume $25,000 in funding will be provided to ten
community-based organizations at a cost of $250,000 per year, as well as 2,500 hours of contractor
services for outreach and translation at an hourly rate of $200, at a cost of $500,000 per year.
County support. County support costs assume county staff will provide application support for
an estimated 1,240 individuals, and process 155 appeals per year. Costs also include funding for
policy and procedural development support.
Service costs—newly eligible populations. The bill requires and the fiscal note reflects HCPF
enrolling newly eligible pregnant adults and children starting January 1, 2024; however, HCPF is
unable to meet this timeline due to the systems requirements involved—see Technical Note. Costs
assume that the newly eligible population will receive identical care and services received by
existing Medicaid and CHP+ members, including access to waiver services, and exclude current
EMS spending. Adult service costs assume the enhanced federal match rate of 65 percent, and
child service costs assume no federal match. Cost estimates use either pre-pandemic utilization
data with a three-year average growth rate applied or Senate Bill 21-194 per capita costs where
applicable. Utilization estimates begin with 2,138 pregnant and postpartum adults;
137 non-pregnant adults; 546 children on Medicaid; and 765 children on CHP+; however, the
actual population will likely vary from these assumptions, particularly for children for which little
utilization data is available, resulting in what is likely a conservative estimate. Unlike the state's Page 5
March 23, 2022 HB 22-1289
Medicaid and CHP+ plans, these state-only plans have no over-expenditure authority and will be
required to stop providing coverage if funding is insufficient. Therefore, the fiscal note assumes
this population will be carefully tracked and accounted for through the annual budget process.
Service costs—breast pumps and lactation consulting. Since breast pumps are covered by the
Special Supplemental Nutrition Program for Women, Infants, and Children for people on
Medicaid, breast pump costs include only those eligible for CHP+, which is estimated at
551 individuals initially at the current breast pump rate of $43.79. Of these individuals, it is
assumed that about 75 percent will seek lactation support at an estimated consultation cost of
$30.41, once these services receive federal approval, which is assumed to be a two-year process.
Service savings. Service savings assume that, beginning in FY 2023-24, 468 adults will receive a
half-year of coverage under the DOI's Health Insurance Affordability Enterprise plan at a per
person EMS savings of $21,563, up to 960 adults by FY 2025-26. Because the DOI performs
rate-setting and plan approval every June preceding the calendar year plans, the fiscal note
assumes that these processes could not occur until June 2023, for calendar year 2024 plans.
Table 3
Estimated Service Costs and Savings Under HB 22-1289
Service Costs FY 2022-23 FY 2023-24 FY 2024-25 FY 2025-26
Non-Citizen Pregnant Adult Medicaid - $9,085,336 $18,826,021 $19,514,304
Non-Citizen Pregnant Adult CHP+ - $791,502 $1,608,627 $1,635,438
Non-Citizen Postpartum Adult Medicaid - $3,861,195 $7,818,395 $7,919,640
Non-Citizen Postpartum Adult CHP+ - $246,988 $499,881 $506,095
Non-Citizen Children State-only Medicaid - $943,675 $1,952,469 $2,020,865
Non-Citizen Children State-only CHP+ - $1,085,042 $2,252,860 $2,339,998
Breast Pumps CHP+ $17,424 $24,114 $27,080 $30,476
Lactation Support Services CHP+ - - $13,916 $15,661
Total Service Costs $17,424 $16,037,852 $32,999,249 $33,982,478
General Fund $6,098 $6,931,914 $14,283,201 $14,728,428
Federal Funds $11,326 $9,105,938 $18,716,048 $19,254,050
Service Savings
EMS Savings from Non-Pregnant Adults - ($5,046,187) ($20,435,685) ($20,700,316)
Total Service Savings $0 ($5,046,187) ($20,435,685) ($20,700,316)
General Fund - ($2,523,094) ($10,217,843) ($10,350,158)
Federal Funds - ($2,523,094) ($10,217,843) ($10,350,158)
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March 23, 2022 HB 22-1289
Department of Public Health and Environment. Based on the costs of the pilot program, the CDPHE
requires 2.7 FTE to continue the Health eMoms survey, as well as costs for survey materials, postage,
software, and participant incentives.
Department of Human Services. Because foster youth under 19 years of age will now be eligible for
health benefits regardless of immigration status, the bill creates a need for a claims processing link
between the MMIS and CDHS' Trails system. The DHS requires a full-time developer to create and
maintain an interface between Trails and MMIS, at a cost of $80 per hour. This cost is preliminary.
Division of Insurance, Department of Regulatory Agencies. In FY 2022-23, the Health Insurance
Affordability Board will perform rulemaking and related stakeholder outreach regarding
state-subsidized individual health plans, which can be accomplished within existing appropriations.
Federal financial participation and savings utilization. The bill requires HCPF to apply for a
1903(v) waiver to enhance the state's subsidization of health insurance for low-income Coloradans
and maximize federal financial participation. The fiscal note assumes that this waiver will not be
approved, without which the bill has no explicit mechanism for the Health Insurance Affordability
Enterprise to utilize HCPF's EMS savings. TABOR limits the amount of state revenue that may be
provided to an enterprise, which may also limit the ability to direct HCPF savings to the
enterprise.
Current state-subsidized plan rollout. The Health Insurance Affordability Board is currently in
the process of developing a state-subsidized insurance plan for qualified individuals—defined as
Colorado residents, regardless of immigration status, with a household income of less than
300 percent of the federal poverty level who are not eligible for other state or federal health
benefits. For CY 2023, the enterprise board voted to offer that plan with $0 premium and a
94 percent actuarial value to undocumented persons with incomes less than 138 percent of the
federal poverty level. Assuming 9,100 enrollees, this plan is estimated to cost $51.9 million per
year. This plan may reduce the savings to HCPF reflected in the bill.
Centrally appropriated costs. Pursuant to a Joint Budget Committee policy, certain costs associated with
this bill are addressed through the annual budget process and centrally appropriated in the Long Bill or
supplemental appropriations bills, rather than in this bill. These costs, which include employee insurance
and supplemental employee retirement payments, are shown in Table 2.
Other Budget Impacts
General Fund reserve. Under current law, an amount equal to 15 percent of General Fund
appropriations must be set aside in the General Fund statutory reserve beginning in FY 2022-23. Based
on this fiscal note, the bill is expected to increase the amount of General Fund held in reserve by the
amounts shown in Table 1, which decreases the amount of General Fund available for other purposes.
Local Government
Counties will have additional workload and costs to enroll newly eligible persons into Medicaid and
CHP+ under bill, which will be paid for by the state, as discussed in the State Expenditures section. Page 7
March 23, 2022 HB 22-1289
Statutory Public Entity
Connect for Health Colorado, Colorado’s insurance marketplace, will spend an estimated $104,500 in
FY 2022-23 on computer programming to create the special enrollment period for pregnant persons
with retroactive start date capability and a noticing requirement. Costs for Connect for Health
Colorado are paid using fees assessed on health plans sold in the state, among other sources, and it is
assumed that existing revenue streams can be used to cover these costs.
Technical Note
HCPF is unable to meet the January 1, 2024, deadline. Based on current projects the department is
implementing and the re-procurement timeline for the MMIS, the department anticipates completing
the necessary rule and system changes for the new populations by January 1, 2025, at the earliest. The
fiscal note currently shows costs aligning with the bill's deadlines.
Effective Date
The bill takes effect upon signature of the Governor, or upon becoming law without his signature.
State Appropriations
The bill requires the following appropriations:
$3,610,554 General Fund and $2,756,608 federal funds to the Department of Health Care Policy
and Financing and 7.4 FTE;
$423,626 General Fund to the Department of Public Health and Environment and 2.5 FTE; and
$166,000 General Fund to the Department of Human Services.
State and Local Government Contacts
Connect for Health Colorado Health Care Policy and Financing
Human Services Information Technology
Law Public Health and Environment
Regulatory Agencies
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit: leg.colorado.gov/fiscalnotes.