LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION March 19, 2009 TO: Honorable Patrick M. Rose, Chair, House Committee on Human Services FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:HB2200 by Marquez (Relating to eligibility for and administration of the child health plan program.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB2200, As Introduced: a negative impact of ($153,287,739) through the biennium ending August 31, 2011. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION
March 19, 2009
TO: Honorable Patrick M. Rose, Chair, House Committee on Human Services FROM: John S. O'Brien, Director, Legislative Budget Board IN RE:HB2200 by Marquez (Relating to eligibility for and administration of the child health plan program.), As Introduced
TO: Honorable Patrick M. Rose, Chair, House Committee on Human Services
FROM: John S. O'Brien, Director, Legislative Budget Board
IN RE: HB2200 by Marquez (Relating to eligibility for and administration of the child health plan program.), As Introduced
Honorable Patrick M. Rose, Chair, House Committee on Human Services
Honorable Patrick M. Rose, Chair, House Committee on Human Services
John S. O'Brien, Director, Legislative Budget Board
John S. O'Brien, Director, Legislative Budget Board
HB2200 by Marquez (Relating to eligibility for and administration of the child health plan program.), As Introduced
HB2200 by Marquez (Relating to eligibility for and administration of the child health plan program.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB2200, As Introduced: a negative impact of ($153,287,739) through the biennium ending August 31, 2011. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Estimated Two-year Net Impact to General Revenue Related Funds for HB2200, As Introduced: a negative impact of ($153,287,739) through the biennium ending August 31, 2011.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
General Revenue-Related Funds, Five-Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds 2010 ($55,798,319) 2011 ($97,489,420) 2012 ($105,629,269) 2013 ($106,450,803) 2014 ($104,836,098)
2010 ($55,798,319)
2011 ($97,489,420)
2012 ($105,629,269)
2013 ($106,450,803)
2014 ($104,836,098)
All Funds, Five-Year Impact: Fiscal Year Probable (Cost) fromGeneral Revenue Fund1 Probable (Cost) fromGR Match For Medicaid758 Probable (Cost) fromGR Match For Title XXI8010 Probable (Cost) fromPremium Co-payments3643 2010 ($4,718,213) ($900,000) ($50,180,106) ($4,665,990) 2011 ($8,500,377) ($196,417) ($88,792,626) ($12,291,450) 2012 ($9,195,345) ($441,685) ($95,992,239) ($20,376,284) 2013 ($9,270,879) ($446,863) ($96,733,061) ($20,807,817) 2014 ($9,136,250) ($452,941) ($95,246,907) ($21,120,832) Fiscal Year Probable (Cost) fromExperience Rebates-CHIP8054 Probable (Cost) fromVendor Drug Rebates-CHIP8070 Probable (Cost) fromFederal Funds555 Probable Revenue Gain fromPremium Co-payments3643 2010 ($2,843,977) ($2,789,413) ($138,457,493) $4,665,990 2011 ($5,124,099) ($4,996,595) ($245,449,133) $12,291,450 2012 ($5,542,825) ($5,404,275) ($265,724,204) $20,376,284 2013 ($5,589,159) ($5,451,267) ($267,798,632) $20,807,817 2014 ($5,507,165) ($5,373,071) ($263,720,659) $21,120,832 Fiscal Year Probable Revenue Gain fromExperience Rebates-CHIP8054 Probable Revenue Gain fromVendor Drug Rebates-CHIP8070 2010 $2,843,977 $2,789,413 2011 $5,124,099 $4,996,595 2012 $5,542,825 $5,404,275 2013 $5,589,159 $5,451,267 2014 $5,507,165 $5,373,071
Fiscal Year Probable (Cost) fromGeneral Revenue Fund1 Probable (Cost) fromGR Match For Medicaid758 Probable (Cost) fromGR Match For Title XXI8010 Probable (Cost) fromPremium Co-payments3643 2010 ($4,718,213) ($900,000) ($50,180,106) ($4,665,990) 2011 ($8,500,377) ($196,417) ($88,792,626) ($12,291,450) 2012 ($9,195,345) ($441,685) ($95,992,239) ($20,376,284) 2013 ($9,270,879) ($446,863) ($96,733,061) ($20,807,817) 2014 ($9,136,250) ($452,941) ($95,246,907) ($21,120,832)
2010 ($4,718,213) ($900,000) ($50,180,106) ($4,665,990)
2011 ($8,500,377) ($196,417) ($88,792,626) ($12,291,450)
2012 ($9,195,345) ($441,685) ($95,992,239) ($20,376,284)
2013 ($9,270,879) ($446,863) ($96,733,061) ($20,807,817)
2014 ($9,136,250) ($452,941) ($95,246,907) ($21,120,832)
Fiscal Year Probable (Cost) fromExperience Rebates-CHIP8054 Probable (Cost) fromVendor Drug Rebates-CHIP8070 Probable (Cost) fromFederal Funds555 Probable Revenue Gain fromPremium Co-payments3643 2010 ($2,843,977) ($2,789,413) ($138,457,493) $4,665,990 2011 ($5,124,099) ($4,996,595) ($245,449,133) $12,291,450 2012 ($5,542,825) ($5,404,275) ($265,724,204) $20,376,284 2013 ($5,589,159) ($5,451,267) ($267,798,632) $20,807,817 2014 ($5,507,165) ($5,373,071) ($263,720,659) $21,120,832
2010 ($2,843,977) ($2,789,413) ($138,457,493) $4,665,990
2011 ($5,124,099) ($4,996,595) ($245,449,133) $12,291,450
2012 ($5,542,825) ($5,404,275) ($265,724,204) $20,376,284
2013 ($5,589,159) ($5,451,267) ($267,798,632) $20,807,817
2014 ($5,507,165) ($5,373,071) ($263,720,659) $21,120,832
Fiscal Year Probable Revenue Gain fromExperience Rebates-CHIP8054 Probable Revenue Gain fromVendor Drug Rebates-CHIP8070 2010 $2,843,977 $2,789,413 2011 $5,124,099 $4,996,595 2012 $5,542,825 $5,404,275 2013 $5,589,159 $5,451,267 2014 $5,507,165 $5,373,071
2010 $2,843,977 $2,789,413
2011 $5,124,099 $4,996,595
2012 $5,542,825 $5,404,275
2013 $5,589,159 $5,451,267
2014 $5,507,165 $5,373,071
Fiscal Analysis
Section 1 would add work-related expenses to the expenses that are deducted from family income for the purposes of determining income eligibility for the Children's Health Insurance Program (CHIP). Section 2 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. Sections 2 and 8 would eliminate HHSCs authority to establish eligibility standards regarding the amount and types of allowable assets for a family whose net family income is above 150 percent of FPL. Sections 3 and 8 eliminate the review of income during the sixth month of enrollment currently required for families with income above 185 percent of FPL. Section 4 requires CHIP to provide, at a minimum, the covered benefits as described in certain legislative interim reports and as provided under the plan on June 1, 2003. Section 7 requires the executive commissioner of HHSC to develop and implement a CHIP buy-in option for children whose net family income exceeds 300 percent of FPL, but does not exceed 400 percent FPL. This option would 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. The buy-in option would also provide for a waiting period comparable to that for CHIP. The executive commissioner would be allowed to establish rules and procedures for the buy-in option that differ from those generally applicable to CHIP. To the extent allowed by federal law, the buy-in option would be required to include provisions designed to discourage crowd-out. Section 9 requires the executive commissioner, by November 1, 2010, to adopt rules as necessary to implement the buy-in option. Section 8 would also eliminate HHSCs authority to establish prescription drug limits in CHIP and eliminate the authorization for cost-sharing provisions to be based on the maximum level authorized under federal law and to be applied to income levels in a manner that minimizes administrative costs. Section 10 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.
Section 1 would add work-related expenses to the expenses that are deducted from family income for the purposes of determining income eligibility for the Children's Health Insurance Program (CHIP).
Section 2 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.
Sections 2 and 8 would eliminate HHSCs authority to establish eligibility standards regarding the amount and types of allowable assets for a family whose net family income is above 150 percent of FPL.
Sections 3 and 8 eliminate the review of income during the sixth month of enrollment currently required for families with income above 185 percent of FPL.
Section 4 requires CHIP to provide, at a minimum, the covered benefits as described in certain legislative interim reports and as provided under the plan on June 1, 2003.
Section 7 requires the executive commissioner of HHSC to develop and implement a CHIP buy-in option for children whose net family income exceeds 300 percent of FPL, but does not exceed 400 percent FPL. This option would 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. The buy-in option would also provide for a waiting period comparable to that for CHIP. The executive commissioner would be allowed to establish rules and procedures for the buy-in option that differ from those generally applicable to CHIP. To the extent allowed by federal law, the buy-in option would be required to include provisions designed to discourage crowd-out. Section 9 requires the executive commissioner, by November 1, 2010, to adopt rules as necessary to implement the buy-in option.
Section 8 would also eliminate HHSCs authority to establish prescription drug limits in CHIP and eliminate the authorization for cost-sharing provisions to be based on the maximum level authorized under federal law and to be applied to income levels in a manner that minimizes administrative costs.
Section 10 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.
Methodology
Sections 1-4, and 8: It is assumed that beginning September 1, 2009 clients between 200 and 300 percent of FPL will begin enrolling in CHIP. It is assumed that annual enrollment fees will be established in the amount of $65 for families between 200 and 250 percent of FPL and $85 for families between 250 and 300 percent FPL. It is assumed that beginning September 1, 2009, income reviews during the sixth month of enrollment will be eliminated, the assets test will be eliminated, work-related expenses will be disregarded from income, and any required changes to benefits will be in place. 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 Texas this cap would be 235 percent of FPL. HHSC indicates that the state may be allowed to disregard income above 235 percent of FPL. It is assumed that federal matching funds will be available for children above 235 percent FPL, but if the state does not get approval to enroll children above 235 percent FPL additional General Revenue Funds would be required to fund them. It is estimated that the cumulative impact of all required changes would result in an additional 111,189 average monthly recipient months in fiscal year 2010; 199,933 in fiscal year 2011; 216,321 in fiscal year 2012; 218,202 in fiscal year 2013; and 215,071 in fiscal year 2014. There would also be additional administrative expenditures associated with the expanded program including 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 $202.8 million All Funds, including $65.2 million in General Revenue Funds, in fiscal year 2010; $359.0 million All Funds, including $113.7 million in General Revenue Funds, in fiscal year 2011; $388.3 million All Funds, including $123.0 million in General Revenue Funds, in fiscal year 2012; $391.5 million All Funds, including $124.2 million in General Revenue Funds, in fiscal year 2013; and $385.8 million All Funds, including $122.5 million in General Revenue Funds in fiscal year 2014. These General Revenue Fund amounts include expenditure of additional collections of Vendor Drug Rebates for CHIP, Experience Rebates, and Premium Copayments totaling $10.3 million in fiscal year 2010, $16.4 million in fiscal year 2011, $17.8 million in fiscal year 2012, $18.2 million in fiscal year 2013, and $18.2 million in 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. Section 7: 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. 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. The average cost per recipient month is estimated to be $143.39 in each fiscal year. The client services cost of the project is estimated to be $6.0 million in fiscal year 2011, $13.5 million in fiscal year 2012, $13.7 million in fiscal year 2013, and $13.8 million in fiscal year 2014. It is assumed that the client services portion of the project will be funded entirely through collection of Premium Copayments. There would also be administrative expenditures associated with the buy-in program 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 Section 4 is estimated to be $1.8 million All Funds, including $0.9 million in General Revenue Funds, in fiscal year 2010 rising to $14.8 million All Funds, including $14.3 million in General Revenue Funds, by fiscal year 2014. These General Revenue amounts include expenditure of collected Premium Copayments. The total net cost of the bill is estimated to be $204.6 million All Funds, including $66.1 million in General Revenue Funds, in fiscal year 2010 increasing to $400.6 million All Funds, including $136.8 million in General Revenue Funds, by fiscal year 2014.
Sections 1-4, and 8: It is assumed that beginning September 1, 2009 clients between 200 and 300 percent of FPL will begin enrolling in CHIP. It is assumed that annual enrollment fees will be established in the amount of $65 for families between 200 and 250 percent of FPL and $85 for families between 250 and 300 percent FPL. It is assumed that beginning September 1, 2009, income reviews during the sixth month of enrollment will be eliminated, the assets test will be eliminated, work-related expenses will be disregarded from income, and any required changes to benefits will be in place. 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 Texas this cap would be 235 percent of FPL. HHSC indicates that the state may be allowed to disregard income above 235 percent of FPL. It is assumed that federal matching funds will be available for children above 235 percent FPL, but if the state does not get approval to enroll children above 235 percent FPL additional General Revenue Funds would be required to fund them.
It is estimated that the cumulative impact of all required changes would result in an additional 111,189 average monthly recipient months in fiscal year 2010; 199,933 in fiscal year 2011; 216,321 in fiscal year 2012; 218,202 in fiscal year 2013; and 215,071 in fiscal year 2014. There would also be additional administrative expenditures associated with the expanded program including 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 $202.8 million All Funds, including $65.2 million in General Revenue Funds, in fiscal year 2010; $359.0 million All Funds, including $113.7 million in General Revenue Funds, in fiscal year 2011; $388.3 million All Funds, including $123.0 million in General Revenue Funds, in fiscal year 2012; $391.5 million All Funds, including $124.2 million in General Revenue Funds, in fiscal year 2013; and $385.8 million All Funds, including $122.5 million in General Revenue Funds in fiscal year 2014. These General Revenue Fund amounts include expenditure of additional collections of Vendor Drug Rebates for CHIP, Experience Rebates, and Premium Copayments totaling $10.3 million in fiscal year 2010, $16.4 million in fiscal year 2011, $17.8 million in fiscal year 2012, $18.2 million in fiscal year 2013, and $18.2 million in 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.
Section 7: 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.
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. The average cost per recipient month is estimated to be $143.39 in each fiscal year. The client services cost of the project is estimated to be $6.0 million in fiscal year 2011, $13.5 million in fiscal year 2012, $13.7 million in fiscal year 2013, and $13.8 million in fiscal year 2014. It is assumed that the client services portion of the project will be funded entirely through collection of Premium Copayments.
There would also be administrative expenditures associated with the buy-in program 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 Section 4 is estimated to be $1.8 million All Funds, including $0.9 million in General Revenue Funds, in fiscal year 2010 rising to $14.8 million All Funds, including $14.3 million in General Revenue Funds, by fiscal year 2014. These General Revenue amounts include expenditure of collected Premium Copayments.
The total net cost of the bill is estimated to be $204.6 million All Funds, including $66.1 million in General Revenue Funds, in fiscal year 2010 increasing to $400.6 million All Funds, including $136.8 million in General Revenue Funds, by fiscal year 2014.
Technology
Technology costs included above total $3.0 million All Funds, including $1.1 million in General Revenue Funds, in fiscal year 2010 for one-time costs associated with system changes.
Technology costs included above total $3.0 million All Funds, including $1.1 million in General Revenue Funds, in fiscal year 2010 for one-time costs associated with system changes.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 529 Health and Human Services Commission
529 Health and Human Services Commission
LBB Staff: JOB, CL, LR, JJ, SJ
JOB, CL, LR, JJ, SJ