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

SPONSOR Feldman

ORIGINAL DATE

LAST UPDATED

2/01/07

2/24/07 HB

SHORT TITLE

Health Coverage for Certain Individuals

SB 214/aSPAC

ANALYST Weber

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

None

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates Appropriation in the General Appropriation Act

Relates to Appropriation in the General Appropriation Act

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY07

FY08

FY09 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total For 200-

300 fpl

$4,100.0 $12,300.0 $16,400 Recurring General

$16,400.0 $49,200.0 $65,600.0 Recurring Federal

For under

100 fpl

$15,700.0 $47,100.0 $62,800.0 Recurring General

$62,800.0 $188,400.0 $251,200.0 Recurring Federal

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Human Services Department (HSD)

Public Education Department (PED)

Senate Bill 214/aSPAC – Page

2

Synopsis of SPAC Amendment

On page 2, line 1, strike the period and the quotation mark and insert in lieu thereof a semicolon

and "provided, however, that eligibility pursuant to this section is contingent upon federal

approval and the availability of state and federal funds."".,

This amendment makes the bill’s expansion of State Coverage Insurance for all persons to the

300 percent federal poverty level contingent on the funding of the expansion.

SUMMARY

Synopsis of Original Bill

Senate Bill 214 provides coverage for persons with household incomes less than 300% federal

poverty level (FPL) apparently through the existing State Coverage Insurance program (SCI),

which is a state-sponsored health coverage plan pursuant to a Health Insurance Flexibility and

Affordability Waiver (HIFA) through the Centers for Medicare and Medicaid Services (CMS).

FISCAL IMPLICATIONS

There is no appropriation with the bill but there would be potential significant expense related to

such an expansion that would require appropriations from the general fund. The cost to the

general fund would be dependent on final program design particularly regarding the summary of

benefits and participant financial participation. A current estimate is for approximately $4.1

million in the first year of implementation to increase eligibility to 300 percent fpl from the

current 200 percent fpl. This number is the result of a variety of assumptions and enrolls 9,500

for an average of 6 months with a total employer plus employee contribution of $150 monthly.

HSD reports a current estimate of 57,000 uninsured adults in the 200-300 percent fpl. Although

unlikely, if the entire 57,000 were covered under this model for an entire year state general fund

cost would climb to $48 million.

This does not include the current uninsured in the under 100 percent fpl (approximately 420

thousand for a family of 4). HSD uses US Census data to estimate 84,000 persons in this

category. HSD uses similar but not identical assumptions as above to arrive at a first year cost of

$15.7 million for adults in this eligibility category. This covers 26,000 persons for an average of

6 months each but does not include any participate participation due to the due to low annual

income. At the unlikely scenario of full coverage for 84,000 persons the costs for this population

approaches $100 million annually.

The estimates for in the operating costs above reflect the $4.1 and $15.7 million models in the

previous paragraph, not the unlikely full participation scenario.

SIGNIFICANT ISSUES

The 300 percent federal poverty level is slightly over $60,000 annually for a family of four.

HSD contributes the following.

SCI is a federally-mandated program through CMS under the authority of a HIFA 1115 waiver,

Senate Bill 214/aSPAC – Page

3

which allows demonstration initiatives to encourage new comprehensive state approaches that

will increase the number of individuals with health insurance coverage within current-level

Medicaid and the State Children’s Health Insurance Program (SCHIP) resources. This program

requires federal approval though CMS for any amendments or changes including the expansion

of eligibility to a higher FPL level. The Legislature does not have authority to authorize such a

change without federal approval. This legislation is also not required to obtain federal approval

for a change to the SCI program.

The Human Services Department’s (HSD) Medical Assistance Division (MAD) requires a

certain level of flexibility to meet CMS requirements; this legislation may hinder the ability of

the department to meet that level of flexibility.

POSSIBLE QUESTIONS

What is the SCI summary of benefits package. How does it compare to the state employee

health insurance benefits and the basic Medicaid benefits.

MW/nt