HB 15 – SB 501
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
February 9, 2025
Fiscal Analyst: Chris Higgins | Email: chris.higgins@capitol.tn.gov | Phone: 615-741-2564
HB 15 – SB 501
SUMMARY OF BILL: Authorizes the Governor to expand Medicaid eligibility solely for
the purpose of providing treatment for a patient with a diagnosis of sickle cell disease (SCD).
Authorizes the Governor to negotiate with the federal Centers for Medicare and Medicaid Services
(CMS) with respect to the terms of the expansion.
FISCAL IMPACT:
STATE GOVERNMENT
REVENUE General Fund
FY25-26 & Subsequent Years $276,700
EXPENDITURES General Fund
FY25-26 $2,744,300
FY26-27 & Subsequent Years $1,744,300
FEDERAL GOVERNMENT
EXPENDITURES
FY25-26 $12,144,800
FY26-27 & Subsequent Years $3,144,800
Assumptions:
• It is assumed that the eligible population for expanded Medicaid coverage will be persons
age 19 to 65 whose incomes are below 138 percent of the federal poverty level.
• Based on an actuarial analysis by the Division of TennCare (Division), there is estimated to
be a total of 340,000 individuals in the expansion population.
• According to the 2025 TennCare Sickle Cell Disease Report, the Division provided coverage to
1,474 enrollees with SCD in calendar year 2023, out of a total enrollee population of
approximately 1,700,000), or 0.09 percent (1,474 / 1,700,000).
• It is assumed that the percentage of individuals with SCD will be the same for the
expansion population.
• The proposed legislation will result in approximately 306 new TennCare enrollees (340,000
x 0.09%), beginning in FY25-26.
• Based on information in the 2025 TennCare Sickle Cell Disease Report, the average cost of
medical services for an enrollee with SCD in 2023 was approximately $15,073.
HB 15 – SB 501 2
• There will be a recurring increase in expenditures of $4,612,338 ($15,073 x 306) for new
TennCare enrollees beginning in FY25-26.
• Medicaid expenditures receive matching funds at a rate of 64.323 percent federal to 35.677
percent state. Of this amount, $1,645,544 ($4,612,338 x 35.677%) will be in state funds and
$2,966,794 ($4,612,338 x 64.323%) will be in federal funds.
• The Division will experience a one-time increase in expenditures of approximately
$10,000,000 in FY25-26 to create new systems and systems rules in order to accept a new
eligibility category.
• These expenditures will receive matching funds at a rate of 90 percent federal to 10 percent
state. There will be a one-time increase in state expenditures of $1,000,000 ($10,000,000 x
10%) and one-time increase in federal expenditures of $9,000,000 ($10,000,000 x 90%) in
FY25-26.
• Pursuant to Tenn. Code Ann. § 56-32-124(a), there is currently a six percent tax on gross
premiums collected by health maintenance organizations.
• For TennCare plans, the state pays this tax and receives federal matching funds. It is
assumed that the state will receive a federal match of 64.323 percent federal funds to 35.677
percent state funds for these premiums for new enrollees.
• The estimated revenue and corresponding break down of state and federal expenditures for
new enrollees with a diagnosis of SCD is:
• The total increase in state expenditures is estimated to be $2,744,277 ($1,645,544 +
$1,000,000 + $98,733) in FY25-26, and $1,744,277 ($1,645,544 + $98,733) in FY26-27 and
subsequent years.
• The total increase in federal expenditures is estimated to be $12,144,802 ($2,966,794 +
$9,000,000 + $178,008) in FY25-26, and $3,144,802 ($2,966,794 + $178,008) in FY26-27
and subsequent years.
• The increase in state revenue is estimated to be $276,740 in FY25-26 and subsequent years.
IMPACT TO COMMERCE:
BUSINESS IMPACT
FISCAL YEAR REVENUE EXPENSES
FY25-26 $14,612,300 <$14,612,300
FY26-27 & Subsequent Years $4,612,300 <$4,612,300
Fiscal Year Enrollees Total Cost
Premium
Tax Rate
Premium
Tax Revenue
State
Cost
Federal
Cost
FY25-26 and
Subsequent Years
306 $4,612,338 6.0% $276,740 $98,733 $178,008
HB 15 – SB 501 3
Assumptions:
• Businesses will experience an increase in business revenue of approximately $14,612,338
($4,612,338 + $10,000,000) in FY25-26, and $4,612,338 in FY26-27 and subsequent years
for providing additional services and the implementation of the new systems.
• For businesses to remain solvent, any increased expenditures will be less than that amount
of revenue.
• Any increase in the number of jobs created 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