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:HB2388 by Hernandez (Relating to the child health plan program.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB2388, As Introduced: a negative impact of ($11,883,175) 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:HB2388 by Hernandez (Relating to 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: HB2388 by Hernandez (Relating to 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
HB2388 by Hernandez (Relating to the child health plan program.), As Introduced
HB2388 by Hernandez (Relating to the child health plan program.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB2388, As Introduced: a negative impact of ($11,883,175) 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 HB2388, As Introduced: a negative impact of ($11,883,175) 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 ($4,678,477) 2011 ($7,204,698) 2012 ($7,985,724) 2013 ($7,827,084) 2014 ($7,590,414)
2010 ($4,678,477)
2011 ($7,204,698)
2012 ($7,985,724)
2013 ($7,827,084)
2014 ($7,590,414)
All Funds, Five-Year Impact: Fiscal Year Probable Savings/(Cost) fromGR Match For Medicaid758 Probable (Cost) fromGeneral Revenue Fund1 Probable (Cost) fromGR Match For Title XXI8010 Probable (Cost) fromPremium Co-payments3643 2010 ($900,000) ($634,962) ($3,143,515) ($14,429,262) 2011 ($392,863) ($1,490,916) ($5,320,919) ($47,639,249) 2012 ($883,371) ($1,585,849) ($5,516,504) ($64,062,600) 2013 ($893,726) ($1,531,380) ($5,401,978) ($62,690,097) 2014 ($905,883) ($1,450,453) ($5,234,078) ($60,597,395) Fiscal Year Probable (Cost) fromExperience Rebates-CHIP8054 Probable (Cost) fromVendor Drug Rebates-CHIP8070 Probable (Cost) fromFederal Funds555 Probable Revenue Gain fromPremium Co-payments3643 2010 ($382,331) ($410,877) ($10,608,762) $14,429,262 2011 ($898,728) ($962,147) ($18,199,913) $47,639,249 2012 ($956,389) ($1,023,519) ($19,479,586) $64,062,600 2013 ($922,960) ($987,744) ($19,034,167) $62,690,097 2014 ($873,984) ($935,330) ($18,378,301) $60,597,395 Fiscal Year Probable Revenue Gain fromExperience Rebates-CHIP8054 Probable Revenue Gain fromVendor Drug Rebates-CHIP8070 2010 $382,331 $410,877 2011 $898,728 $962,147 2012 $956,389 $1,023,519 2013 $922,960 $987,744 2014 $873,984 $935,330
Fiscal Year Probable Savings/(Cost) fromGR Match For Medicaid758 Probable (Cost) fromGeneral Revenue Fund1 Probable (Cost) fromGR Match For Title XXI8010 Probable (Cost) fromPremium Co-payments3643 2010 ($900,000) ($634,962) ($3,143,515) ($14,429,262) 2011 ($392,863) ($1,490,916) ($5,320,919) ($47,639,249) 2012 ($883,371) ($1,585,849) ($5,516,504) ($64,062,600) 2013 ($893,726) ($1,531,380) ($5,401,978) ($62,690,097) 2014 ($905,883) ($1,450,453) ($5,234,078) ($60,597,395)
2010 ($900,000) ($634,962) ($3,143,515) ($14,429,262)
2011 ($392,863) ($1,490,916) ($5,320,919) ($47,639,249)
2012 ($883,371) ($1,585,849) ($5,516,504) ($64,062,600)
2013 ($893,726) ($1,531,380) ($5,401,978) ($62,690,097)
2014 ($905,883) ($1,450,453) ($5,234,078) ($60,597,395)
Fiscal Year Probable (Cost) fromExperience Rebates-CHIP8054 Probable (Cost) fromVendor Drug Rebates-CHIP8070 Probable (Cost) fromFederal Funds555 Probable Revenue Gain fromPremium Co-payments3643 2010 ($382,331) ($410,877) ($10,608,762) $14,429,262 2011 ($898,728) ($962,147) ($18,199,913) $47,639,249 2012 ($956,389) ($1,023,519) ($19,479,586) $64,062,600 2013 ($922,960) ($987,744) ($19,034,167) $62,690,097 2014 ($873,984) ($935,330) ($18,378,301) $60,597,395
2010 ($382,331) ($410,877) ($10,608,762) $14,429,262
2011 ($898,728) ($962,147) ($18,199,913) $47,639,249
2012 ($956,389) ($1,023,519) ($19,479,586) $64,062,600
2013 ($922,960) ($987,744) ($19,034,167) $62,690,097
2014 ($873,984) ($935,330) ($18,378,301) $60,597,395
Fiscal Year Probable Revenue Gain fromExperience Rebates-CHIP8054 Probable Revenue Gain fromVendor Drug Rebates-CHIP8070 2010 $382,331 $410,877 2011 $898,728 $962,147 2012 $956,389 $1,023,519 2013 $922,960 $987,744 2014 $873,984 $935,330
2010 $382,331 $410,877
2011 $898,728 $962,147
2012 $956,389 $1,023,519
2013 $922,960 $987,744
2014 $873,984 $935,330
Fiscal Analysis
Section 2 requires the Health and Human Services Commission (HHSC) to increase income eligibility for the Childrens Health Insurance Program (CHIP) from at or below 200 percent of the federal poverty level (FPL) to at or below 300 percent of FPL. It also increases the threshold at which an assets test may be established from 150 percent of FPL to 250 percent of FPL. Section 3 increases from 185 percent of FPL to 285 percent of FPL the threshold at which a review of income during the sixth month of enrollment is required. Section 4 maintains current cost sharing requirements for enrollees whose net family incomes are at or below 200 percent of FPL. The bill requires HHSC to require enrollees whose net family incomes are greater than 200 percent but not greater than 300 percent of FPL to pay a share of the cost through copayments, fees, and a portion of the plan premium. The bill requires the amount of the share required to be paid by enrollees with net family income greater than 200 percent but not greater than 300 percent of FPL to exceed the amount required to be paid by those with net family incomes at or below 200 percent of FPL, and to equal the highest amount that may be required by federal law but not to exceed five percent of an enrollees net family income. Section 5 requires the executive commissioner of HHSC to develop and implement a CHIP buy-in option for children with a net family income in excess of 300 percent of FPL. This option would require payment of 100 percent of the health benefits plan premium and additional deductibles, coinsurance, or other cost-sharing payments as determined by the executive commissioner and provide for a waiting period. 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 6 requires the executive commissioner, by January 1, 2010, to adopt rules as necessary to implement the buy-in option. Section 7 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 2-4: It is assumed that it will take three months for the agency to obtain the necessary waivers and authorizations and to perform the required start-up activities to implement the provisions found in these sections. It is assumed that beginning December 1, 2009 clients between 200 and 300 percent of FPL will begin enrolling in CHIP. It is assumed that monthly cost-sharing will be established in the amount of $92 per child for families between 200 and 250 percent of FPL and $105 per child 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 no longer be performed for any family and that the assets test will apply only to families with income above 250 percent FPL. 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 increasing maximum income eligibility for the CHIP program and increasing the threshold for the assets test and income check would result in an additional 16,378 average monthly recipient months in fiscal year 2010; 38,499 in fiscal year 2011; 40,969 in fiscal year 2012; 39,537 in fiscal year 2013; and 37,439 in fiscal year 2014. The average cost per recipient month is estimated to be $129.69 in each fiscal year. The additional cost to the program from higher caseloads would be $25.5 million All Funds, including $18.1 million in General Revenue Funds, in fiscal year 2010; $59.9 million All Funds, including $44.5 million in General Revenue Funds, in fiscal year 2011; $63.8 million All Funds, including $47.7 million in General Revenue Funds, in fiscal year 2012; $61.5 million All Funds, including $45.8 million in General Revenue Funds, in fiscal year 2013; and $58.3 million All Funds, including $43.1 million in General Revenue Funds in fiscal year 2014. These General Revenue Funds amounts include expenditure of additional collections of Vendor Drug Rebates for CHIP, Experience Rebates, and Premium Copayments totaling $15.2 million in fiscal year 2010, $38.6 million in fiscal year 2011, $41.6 million in fiscal year 2012, $39.9 million in fiscal year 2013, and $37.4 million in fiscal year 2014. There would also be additional administrative expenditures associated with the expanded program estimated to be $3.2 million All Funds, including $0.9 million in General Revenue Funds, in fiscal year 2010; $3.3 million All Funds, including $1.0 million in General Revenue Funds, in fiscal year 2011; $3.6 million All Funds, including $1.0 million in General Revenue Funds, in fiscal year 2012; $3.4 million All Funds, including $1.0 million in General Revenue Funds, in fiscal year 2013; and $3.2 million All Funds, including $0.9 million in General Revenue Funds, in fiscal year 2014. These amounts include 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 $28.7 million All Funds, including $19.0 million in General Revenue Funds, in fiscal year 2010 rising to $61.5 million All Funds, including $44.0 million in General Revenue Funds, by 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 5: 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 6,981 average monthly recipient months in fiscal year 2011; 15,696 in fiscal year 2012; 15,880 in fiscal year 2013; and 16,096 in fiscal year 2014. The average cost per recipient month is estimated to be $129.69 in each fiscal year. The client services cost of the program is estimated to be $10.9 million in fiscal year 2011, $24.4 million in fiscal year 2012, $24.7 million in fiscal year 2013, and $25.0 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; $0.8 million All Funds, including $0.4 million in General Revenue Funds, in fiscal year 2011 and $1.8 million All Funds, including $0.9 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 5 is estimated to be $1.8 million All Funds, including $0.9 million in General Revenue Funds, in fiscal year 2010 rising to $26.9 million All Funds, including $26.0 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 $30.5 million All Funds, including $19.9 million in General Revenue Funds, in fiscal year 2010 increasing to $88.4 million All Funds, including $70.0 million in General Revenue Funds, by fiscal year 2014.
Sections 2-4: It is assumed that it will take three months for the agency to obtain the necessary waivers and authorizations and to perform the required start-up activities to implement the provisions found in these sections. It is assumed that beginning December 1, 2009 clients between 200 and 300 percent of FPL will begin enrolling in CHIP. It is assumed that monthly cost-sharing will be established in the amount of $92 per child for families between 200 and 250 percent of FPL and $105 per child 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 no longer be performed for any family and that the assets test will apply only to families with income above 250 percent FPL. 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 increasing maximum income eligibility for the CHIP program and increasing the threshold for the assets test and income check would result in an additional 16,378 average monthly recipient months in fiscal year 2010; 38,499 in fiscal year 2011; 40,969 in fiscal year 2012; 39,537 in fiscal year 2013; and 37,439 in fiscal year 2014. The average cost per recipient month is estimated to be $129.69 in each fiscal year. The additional cost to the program from higher caseloads would be $25.5 million All Funds, including $18.1 million in General Revenue Funds, in fiscal year 2010; $59.9 million All Funds, including $44.5 million in General Revenue Funds, in fiscal year 2011; $63.8 million All Funds, including $47.7 million in General Revenue Funds, in fiscal year 2012; $61.5 million All Funds, including $45.8 million in General Revenue Funds, in fiscal year 2013; and $58.3 million All Funds, including $43.1 million in General Revenue Funds in fiscal year 2014. These General Revenue Funds amounts include expenditure of additional collections of Vendor Drug Rebates for CHIP, Experience Rebates, and Premium Copayments totaling $15.2 million in fiscal year 2010, $38.6 million in fiscal year 2011, $41.6 million in fiscal year 2012, $39.9 million in fiscal year 2013, and $37.4 million in fiscal year 2014.
There would also be additional administrative expenditures associated with the expanded program estimated to be $3.2 million All Funds, including $0.9 million in General Revenue Funds, in fiscal year 2010; $3.3 million All Funds, including $1.0 million in General Revenue Funds, in fiscal year 2011; $3.6 million All Funds, including $1.0 million in General Revenue Funds, in fiscal year 2012; $3.4 million All Funds, including $1.0 million in General Revenue Funds, in fiscal year 2013; and $3.2 million All Funds, including $0.9 million in General Revenue Funds, in fiscal year 2014. These amounts include 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 $28.7 million All Funds, including $19.0 million in General Revenue Funds, in fiscal year 2010 rising to $61.5 million All Funds, including $44.0 million in General Revenue Funds, by 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 5: 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 6,981 average monthly recipient months in fiscal year 2011; 15,696 in fiscal year 2012; 15,880 in fiscal year 2013; and 16,096 in fiscal year 2014. The average cost per recipient month is estimated to be $129.69 in each fiscal year. The client services cost of the program is estimated to be $10.9 million in fiscal year 2011, $24.4 million in fiscal year 2012, $24.7 million in fiscal year 2013, and $25.0 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; $0.8 million All Funds, including $0.4 million in General Revenue Funds, in fiscal year 2011 and $1.8 million All Funds, including $0.9 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 5 is estimated to be $1.8 million All Funds, including $0.9 million in General Revenue Funds, in fiscal year 2010 rising to $26.9 million All Funds, including $26.0 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 $30.5 million All Funds, including $19.9 million in General Revenue Funds, in fiscal year 2010 increasing to $88.4 million All Funds, including $70.0 million in General Revenue Funds, by fiscal year 2014.
Technology
Technology costs included above total $2.0 million All Funds, including $0.8 million in General Revenue Funds, in fiscal year 2010 for one-time costs associated with system changes.
Technology costs included above total $2.0 million All Funds, including $0.8 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, PP, LR, JJ, SJ
JOB, CL, PP, LR, JJ, SJ