LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 88TH LEGISLATIVE REGULAR SESSION March 19, 2023 TO: Honorable James B. Frank, Chair, House Committee on Human Services FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB54 by Thompson, Senfronia (Relating to the personal needs allowance for certain Medicaid recipients who are residents of long-term care facilities.), Committee Report 1st House, Substituted Estimated Two-year Net Impact to General Revenue Related Funds for HB54, Committee Report 1st House, Substituted : a negative impact of ($17,365,464) through the biennium ending August 31, 2025. 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 toGeneral Revenue Related Funds2024($8,254,761)2025($9,110,703)2026($9,922,647)2027($10,547,992)2028($10,928,473)All Funds, Five-Year Impact: Fiscal Year Probable Savings/(Cost) fromGeneral Revenue Fund1 Probable Savings/(Cost) fromGR Match For Medicaid758 Probable Savings/(Cost) fromFederal Funds555 Probable Revenue Gain fromGeneral Revenue Fund12024($2,233,200)($6,232,687)($9,630,604)$158,3452025($2,517,668)($7,182,556)($10,720,126)$442,1412026($2,677,164)($7,633,234)($11,392,773)$290,8132027($2,840,396)($8,114,281)($12,110,747)$305,0142028($2,907,096)($8,296,552)($12,382,788)$206,381Fiscal Year Probable Revenue Gain fromFoundation School Fund1932024$52,7812025$147,3802026$96,9382027$101,6712028$68,794 Fiscal AnalysisThe bill would increase the personal needs allowance (PNA) for Medicaid-enrolled residents of nursing facilities, Intermediate Care Facilities for Individuals with Intellectual Disabilities (ICFs/IID), or similar long-term care facilities, from a minimum of $60 per month to a minimum of $85 per month.The bill would require HHSC to adjust the personal needs allowance for inflation on January 1 of each odd-numbered year.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 88TH LEGISLATIVE REGULAR SESSION
March 19, 2023
TO: Honorable James B. Frank, Chair, House Committee on Human Services FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB54 by Thompson, Senfronia (Relating to the personal needs allowance for certain Medicaid recipients who are residents of long-term care facilities.), Committee Report 1st House, Substituted
TO: Honorable James B. Frank, Chair, House Committee on Human Services
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: HB54 by Thompson, Senfronia (Relating to the personal needs allowance for certain Medicaid recipients who are residents of long-term care facilities.), Committee Report 1st House, Substituted
Honorable James B. Frank, Chair, House Committee on Human Services
Honorable James B. Frank, Chair, House Committee on Human Services
Jerry McGinty, Director, Legislative Budget Board
Jerry McGinty, Director, Legislative Budget Board
HB54 by Thompson, Senfronia (Relating to the personal needs allowance for certain Medicaid recipients who are residents of long-term care facilities.), Committee Report 1st House, Substituted
HB54 by Thompson, Senfronia (Relating to the personal needs allowance for certain Medicaid recipients who are residents of long-term care facilities.), Committee Report 1st House, Substituted
Estimated Two-year Net Impact to General Revenue Related Funds for HB54, Committee Report 1st House, Substituted : a negative impact of ($17,365,464) through the biennium ending August 31, 2025. 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 HB54, Committee Report 1st House, Substituted : a negative impact of ($17,365,464) through the biennium ending August 31, 2025. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
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:
2024 ($8,254,761)
2025 ($9,110,703)
2026 ($9,922,647)
2027 ($10,547,992)
2028 ($10,928,473)
All Funds, Five-Year Impact:
2024 ($2,233,200) ($6,232,687) ($9,630,604) $158,345
2025 ($2,517,668) ($7,182,556) ($10,720,126) $442,141
2026 ($2,677,164) ($7,633,234) ($11,392,773) $290,813
2027 ($2,840,396) ($8,114,281) ($12,110,747) $305,014
2028 ($2,907,096) ($8,296,552) ($12,382,788) $206,381
2024 $52,781
2025 $147,380
2026 $96,938
2027 $101,671
2028 $68,794
Fiscal Analysis
The bill would increase the personal needs allowance (PNA) for Medicaid-enrolled residents of nursing facilities, Intermediate Care Facilities for Individuals with Intellectual Disabilities (ICFs/IID), or similar long-term care facilities, from a minimum of $60 per month to a minimum of $85 per month.The bill would require HHSC to adjust the personal needs allowance for inflation on January 1 of each odd-numbered year.
Methodology
In addition to increasing the PNA from $60 to $85, the bill would require HHSC to adjust the PNA each even-numbered year of the biennium to reflect the percentage increase in the Consumer Price Index (CPI) for Urban Wage Earners and Clerical workers with an effective date of January 1 in the odd-numbered year. Assuming a 4.96 percent increase to the CPI in 2025 and a 2.39 percent increase in 2027, the PNA would increase to $89 in January of 2025 and $91 in 2027. Currently, Assisted Living Facilities (ALF) clients have a PNA of $85. This analysis incorporates the PNA increase from $60 to $85 beginning September 1, 2023 and above $85 beginning January 1, 2025.A projected 56,866 average monthly Medicaid recipients will reside in nursing facilities, ICFs/IID (including State Supported Living Centers), in fiscal year 2024, increasing each fiscal year to 61,143, including ALF clients, by fiscal year 2028. An estimated 7,444 recipients in fiscal year 2024 and 7,849 recipients, including 294 clients in ALFs, in fiscal year 2025 will have projected incomes less than the PNA. For these recipients, the increased PNA would be funded entirely with General Revenue Funds and would result in an assumed cost of $2.2 million in fiscal year 2024 and $2.5 million in fiscal year 2025.The monthly increase for the remaining recipients would result in a reduction to applied income and would increase the average monthly cost of care for these clients. The increased costs would be matched with Federal Funds based on the Federal Medical Assistance Percentage (FMAP) at an estimated cost of $15.9 million in All Funds in fiscal year 2024 and $17.9 million in All Funds in fiscal year 2025. In addition, the net increases in client services payments through managed care are assumed to result in an increase to insurance premium tax revenue, estimated as 1.75 percent of the increased managed care expenditures. Revenue is adjusted for assumed timing of payments and prepayments resulting in assumed increased collections of $0.2 million in fiscal year 2024, $0.6 million in fiscal year 2025, $0.4 million in fiscal year 2026, $0.4 million in fiscal year 2027, and $0.3 million in fiscal year 2028. Pursuant to Section 227.001(b), Insurance Code, 25 percent of the revenue is assumed to be deposited to the credit of the Foundation School Fund.
Technology
HHSC indicates that one-time system modifications will be required for the Texas Integrated Eligibility Redesign System (TIERS). It is assumed that any costs associated with the bill could be absorbed using existing resources.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: b > td > 529 Health and Human Services Commission
529 Health and Human Services Commission
LBB Staff: b > td > JMc, NPe, ER, CST, NV
JMc, NPe, ER, CST, NV