SB 401 – HB 1387
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
February 12, 2025
Fiscal Analyst: Chris Higgins | Email: chris.higgins@capitol.tn.gov | Phone: 615-741-2564
SB 401 – HB 1387
SUMMARY OF BILL: Requires, to the extent permitted under federal law, a minor who is
enrolled in TennCare or the CoverKids program to remain eligible for TennCare or the CoverKids
program until the minor reaches 18 years of age.
Prohibits the Division of TennCare (Division), beginning July 1, 2026, from subjecting a minor to a
redetermination of eligibility or disenrolling the minor from TennCare or the CoverKids program
except under certain circumstances. Authorizes the Division to shift an enrolled minor from
TennCare to the CoverKids program, or from the CoverKids program to TennCare, for purposes of
maintaining eligibility.
Requires the Division to submit a request for any necessary federal waivers to the federal Centers for
Medicare and Medicaid Services (CMS) no later than December 31, 2025.
FISCAL IMPACT:
STATE GOVERNMENT
EXPENDITURES General Fund
FY26-27 & Subsequent Years $5,518,900
FEDERAL GOVERNMENT
EXPENDITURES
FY26-27 & Subsequent Years $9,950,100
Assumptions:
• It is assumed that the Division will apply for the necessary waivers by December 31, 2025,
and the continuous enrollment will go into effect on July 1, 2026.
• Pursuant to Section 5112 of the federal Consolidated Appropriations Act, 2023, states are
required to provide for one year of continuous eligibility under Medicaid and the Children's
Health Insurance Program (CHIP) for children under age 19.
• The proposed legislation will require the Division to provide continuous eligibility to a
minor until they reach 18 years of age, or a maximum of 17 additional years of coverage.
• According to information provided by the Division, the total annual cost to implement one
year of continuous eligibility for minors in FY23-24 was estimated to be $15,468,964. This
cost is assumed to be representative of the expenditures that would be incurred as a result
SB 401 – HB 1387 2
of this legislation in the first year of implementation and is adjusted for the fact that
eligibility is not extended for each enrollee for the full fiscal year in the first year.
• The recurring increase in expenditures is estimated to be $15,468,964 in FY26-27 and
subsequent years.
• Medicaid expenditures receive matching funds at a rate of 64.323 percent federal to 35.677
percent state. Of these amounts, $5,518,862 ($15,468,964 x 35.677%) will be state
expenditures and $9,950,102 ($15,468,964 x 64.323%) will be federal expenditures in FY26-
27 and subsequent years.
IMPACT TO COMMERCE:
BUSINESS IMPACT
FISCAL YEAR REVENUE EXPENSES
FY26-27 & Subsequent Years $15,469,000 Less than $15,469,000
Assumptions:
• Healthcare providers will experience an increase in revenue of $15,468,964 in FY26-27 and
subsequent years for providing healthcare services to minors in the TennCare and
CoverKids programs.
• In order to maintain solvency, it is assumed that businesses will experience an increase in
expenditures of less than $15,468,964 in FY26-27 and subsequent years.
• Any impact to jobs in the state is estimated to be not significant.
CERTIFICATION:
The information contained herein is true and correct to the best of my knowledge.
Bojan Savic, Executive Director