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F I S C A L I M P A C T R E P O R T



SPONSOR: Lopez DATE TYPED: 03/01/01 HB
SHORT TITLE: Amend New Mexico Works Act SB 392/aSPAC
ANALYST: Dunbar


APPROPRIATION



Appropriation Contained
Estimated Additional Impact
Recurring

or Non-Rec

Fund

Affected

FY01 FY02 FY01 FY02



See Narrative - Significant


Recurring
General Fund to Medicaid Program


Duplicates HB 238



SOURCES OF INFORMATION



Human Services Department (HSD)

Health Policy Commission



SUMMARY



Synopsis of SPAC Amendments



The Senate Public Affairs Committee amends the bill as follows:



Persons eligible for TANF benefits will also be eligible for Medicaid benefits. This amendment does not preclude a person from applying for Medicaid only under the JUL category.( see fiscal implications below for costs)



The amendment adds protection to the Department's ability to control spending by subjecting the disregard allowances to the availability of State and Federal funds. It also creates an administrative burden on department staff to process applications quicker (30 days vs. 45 days).









Synopsis of Original Bill



SB 392, which includes an emergency clause, amends the New Mexico Works (NMW) Act as follows:

The changes would not significantly affect NMW caseload or expenditures, but will ease program administration.



FISCAL IMPLICATIONS

HSD has developed a cost model, which calculates that the changes, taken as a whole, would decrease NMW Cash Assistance expenditures by about $10.1 million per year. A total of 11,974 cases would be affected by the changes, out of which 1,547 would be closed to cash assistance.



The proposed Medicaid modifications would result in extended periods of eligibility for an estimated 5,624 persons, which would cost an estimated $4.004 million in general fund.



Anticipated costs to reprogram ISD2 to accomplish the proposed changes are expected to be approximately $63,000 in general fund.



SB 392 does not appropriate additional funds to meet the almost $4.07 in additional general fund that the proposed changes would require for Medicaid modifications and system changes. There is no appropriation for this amount in HB 2.



ADMINISTRATIVE IMPLICATIONS



Implementation of changes would require development of emergency regulations, training of supervisors, county directors, caseworkers, hearing officers and other department personnel, in addition to reprogramming ISD2, HSD's automated eligibility and payment determination system.







DUPLICATES



HB 238 which amends the NM Works Act.



TECHNICAL ISSUES



Language in SB 392 would create the gross income test twice, once under §27-2B-7--C (revised numbering) and once under §27-2B-7-D (revised numbering



OTHER SUBSTANTIVE ISSUES



SB 392 was developed in collaboration between HSD and the Legislative Interim Welfare Reform Oversight Committee with significant public input and participation. From HSD's perspective, SB 392 represents legislation that would correct a number of policies that do not work well in practice. Currently, expenditures from the state's TANF grant exceed the amount actually received each year and the department has had to rely on carryover funds left from prior years. At current rates of expenditure, the carryover funds will be exhausted by the end of FY-2002. According to the department the cost reductions contained in SB 392 would allow the state's TANF program to stay within the amounts received each year.



AMENDMENTS



Delete the language at §27-2B-7-C, as renumbered, and renumber all following subsections; and



(1) Revise the language at §27-2B-7-D-1, as renumbered in the bill, by adding the words "earned and unearned" following the words "gross countable" and prior to the words "income that."

POSSIBLE QUESTIONS

1. If the bill is passed, how is the additional Medicaid cost funded ($ 4,004.0 general fund)?



2. Does the department need to secure a waiver from the Medicaid federal level to expand the program to all TANF participants?

3. How much more general fund would be required to fund low income working adults up to 100% of poverty?



BD/ar:njw