COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. NO. 2871-23
BILL NO. Truly Agreed To and Finally Passed CCS for HS for SS #2 for SCS for SB 632
SUBJECT: Insurance for Uninsured Children Program
TYPE: Original
DATE: June 11, 1998
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS Net Effect on All State Funds
FUND AFFECTED
FY 1999
FY 2000
FY 2001
General Revenue * ($6,744,279) to ($6,909,857)
($11,169,903) to
($11,921,002)
($12,561,060) to
($12,810,976) Health Initiative *
($3,100,000)
($4,506,802)
($5,543,085) Total Estimated
($9,844,279) to
($10,009,857)
($15,676,705) to
($16,427,804)
($18,104,145) to
($18,354.061)
*Includes program costs of $2,489,570 which have already been included in the FY99 Truly Agreed To and Finally Passed budget for providing coverage to persons at 200% of federal poverty guidelines.
|
ESTIMATED NET EFFECT ON FEDERAL FUNDS | |||
| FUND AFFECTED | FY 1999 | FY 2000 | FY 2001 |
| Federal Funds* | $0 | $0 | $0 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
* Includes program costs and federal reimbursements of approximately $65 million annually which net out to zero. $42,763,228 has already been included in the FY99 Truly Agreed To and Finally Passed budget for providing coverage to persons at 200% of federal poverty guidelines.
Numbers within parentheses: ( ) indicate costs or losses
This fiscal note contains 10 pages.
FISCAL SUMMARY (continued)
|
ESTIMATED NET EFFECT ON LOCAL FUNDS | |||
| FUND AFFECTED | FY 1999 | FY 2000 | FY 2001 |
| Estimated Net Effect on
Local
Government Funds |
$0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses
FISCAL ANALYSIS
ASSUMPTION
Oversight assumes this proposal would not fiscally impact the Missouri Consolidated Health Care Plan.
Officials from the Department of Transportation, Department of Conservation, Department of Social Services - Division of Legal Services, Department of Corrections, Department of Public Safety - Highway Patrol, Department of Mental Health, Department of Insurance, and Office of Administration assume this proposal would not fiscally impact their agencies.
Officials from the Department of Health (DOH) assume the Department of Social Services (DOS) is the state agency designated in this proposal to implement the 1115 waiver and State Children's Health Insurance Program (SCHIP) initiative for Missouri. Therefore, it is not anticipated that the Department of Health would have to add any staff or resources beyond current levels to assist DOS, unless DOS requests assistance with SCHIP enrollment activities at which time DOH would request a portion of the 10% administrative/outreach SCHIP fund to support any new staff for that purpose.
Officials from the Department of Social Services - Division of Medical Services (DMS) stated the cost estimates to provide health care services for the uninsured were developed by William Mercer Consultants for DMS to be used for a wavier. The DMS assumes eligible children's family income represented by a percentage of the federal poverty level would be rounded to the nearest percentage point. The DMS assumes children in the eligible populations do not have access to insurance with premiums less than 133% of the Missouri consolidated health plan premiums. Currently, 133% of the average Missouri consolidated health plan premium is estimated at $86. The DMS assumes the eligible children do not have family net worth in excess of $250,000. DMS states the cost of providing health care services to the uninsured populations mentioned in the proposal are as follows:
ASSUMPTION (continued)
| FY 99 | |||||||||||
| Population | Enrollees | Cost PMPM* | Yearly Cost | Ten Months** | |||||||
| Children | 68,476 | $ 106.43 | $81,368,911 | $ 67,807,426 | |||||||
| Maternity benefits | 1,095 | $3,424.95 | $ 3,489,340 | $ 2,907,783 | |||||||
| Subtotal | $84,858,251 | $ 70,715,209 | |||||||||
| Less Premiums | ($ 10,484,243) | ||||||||||
| Less Co-payments | ($ 2,902,218) | ||||||||||
| Plus 15% Collection Fee | $ 1,572,636 | ||||||||||
| Total Children's Cost for Health Insurance | $ 58,901,384 | ||||||||||
| FY 00 | |||||||||||
| Population | Enrollees | Cost PMPM* | Yearly Cost | ||||||||
| Children | 69,708 | $ 111.37 | $ 93,160,602 | ||||||||
| Maternity benefits | 1,113 | $3,562.92 | $ 3,965,530 | ||||||||
| Subtotal | $ 97,126,132 | ||||||||||
| Less Premiums | ($ 13,765,365) | ||||||||||
| Less Co-payments | ($ 3,810,489) | ||||||||||
| Plus 15% Collection Fee | $ 2,064,805 | ||||||||||
| Total Children's Cost for Health Insurance | $ 81,615,082 | ||||||||||
| FY 01 | |||||||||||
| Population Enrollees | Cost PMPM* | Yearly Cost | |||||||||
| Children | 70,839 | $117.88 | $100,205,613 | ||||||||
| Maternity benefits | 1,128 | $3,741.46 | $ 4,221,626 | ||||||||
| Subtotal | $104,427,239 | ||||||||||
| Less Premiums | ($ 13,988,706) | ||||||||||
| Less Co-payments | ($ 3,872,314) | ||||||||||
| Plus 15% Collection Fee | $ 2,098,306 | ||||||||||
| Total Children's Cost for Health Insurance | $ 88,664,525 | ||||||||||
* PMPM = per member per month.
** The ten month costs assumes the services would be effective for the ten months with payments one month in arrears.
DMS assumes the premiums and co-payment collections will be performed by a contracted agent of the DMS. The DMS assumes the contracted agent will charge a 15% fee for premiums collected. The DMS assumes copayments would be collected in the amount of $2,902,218 for FY 99 based on utilization of the MC+ program. The DMS assumes copayments will be collected by the providers. The DMS assumes enrollees will not fail to pay premiums or
ASSUMPTION (continued)
copayments.
The cost of wellness visits and immunizations is based on historical Medicaid costs. The DMS assumes the children under this program will receive a Medicaid benefits package less non-emergency medical transportation (NEMT) services.
The DMS assumes the cost of the three studies would be $238,295. The DMS assumes the studies on the impact of providing community-based wrap-around services and the negative impact of the program on the private insurance industry would be performed by an independent agent. The DMS assumes the cost of these studies will be similar to studies that have been currently contracted. The negative impact study is similar to studies that will be done for quality review assurance that have been requested in the 1999 fiscal year budget. The DMS estimates that negative impact study will cost $100,000. The DMS assumes the study on wrap around services for seriously emotional disturbed children and children affected by substance abuse will be prepared through a records review process. The DMS assumes the cost of a study on wrap around services would be $12,573. The DMS assumes the study on the effect of the program would be performed by the DMS and the cost would be $125,722. The DMS assumes the negative impact study will not generate measurable data and has not adjusted the cost of the program to reflect any action taken after the impact study is performed.
The DMS assumes the expenditures ranging from $0 to $594,964 for FY 99 will be spent on outreach for children's programs. For FY 00 and FY 01, the DMS assumes expenditures of $0 to $862,802 and $0 to $898,009, respectively. Oversight also assumes the local health agencies will spend the funds as required resulting in a net $0 impact for the local government funds. The outreach costs of the DOH are assumed to be general revenue and federal funds only.
Funding sources available for health care coverage of the uninsured children would include general revenue, federal reimbursement allowance (FRA) funds, health initiative fund (HIF) and
federal funds. The federal funds available to children's health care coverage would be matched against state funding sources at an enhanced rate due to the State Children's Health Insurance Program (CHIP) that was included in the federal Balanced Budget Act of 1997. General revenue, FRA funds and HIF funds would be utilized through transfers from other program cores for health care coverage.
Officials from the Department of Social Services - Division of Data Processing (DDP) state that record retention would be necessary for approximately 68,472 individuals per year. DDP states that data storage would be for a minimum of .25 gigabytes. One (1) FTE Computer Information Specialist II ($28,008) would be utilized for design and programming work. DDP states this would include development of the initial process of record retention and the on-going
ASSUMPTION (continued)
maintenance of the records within the system. Equipment ($6,971) would include systems furniture and additional disk space. Expenses ($150) would be for office supplies.
Officials from Department of Social Services - Division of Family Services (DFS) assume there would be approximately 68,472 new client cases that would be applied for through DFS. Twenty-six (26) Caseworkers ($22,656) would be needed to interview and process applications. Three (3) Supervisors ($27,468) would oversee the caseworkers. Equipment ($155,751) would include office systems setups and telephones. Expenses ($131,274) would include office supplies, utilities, and telephone charges.
Oversight has stated the cost of the proposal for the General Revenue Fund as $6,744,279 to $6,909,857 annually (FY 99 costs). Oversight notes that the DOS has included the costs of coverage of the eligible population up to 300% of poverty in their budget request for the state fiscal year 1999 budget. The DOS has estimated annual costs of $81,615,082 for this coverage. However, coverage of uninsured children was only funded up to 200% of the federal poverty level in the Truly Agreed To and Finally Passed fiscal year 1999 budget and included costs of $45,252,798. Future funding would be subject to appropriation.
Oversight assumes the FY 99 executive budget is split between state and federal funds at a ratio of 27% state and 73% federal, based on the DMS response noted above.
| FISCAL IMPACT - State Government | FY 1999 | FY 2000 | FY 2001 |
| (10 Mo.) | |||
| GENERAL REVENUE FUND | |||
| Costs - Department of Social Services | |||
| Division of Medical Services | |||
| Contracted Studies | $0 | ($119,148) | ($119,148) |
| Medical Assistance Payments | ($6,447,370) | ($11,281,108) | ($12,143,882) |
| $0 to | $0 to | $0 to | |
| Outreach Program | ($165,578) | ($230,099) | ($249,916) |
| ($6,447,370) | ($11,400,256) | ($12,263,030) | |
| to | to | to | |
| Total Costs - Division of Medical Services | ($6,612,948) | ($11,630,355) | ($12,512,946) |
| FISCAL IMPACT - State Government | FY 1999 | FY 2000 | FY 2001 |
| (continued) | (10 Mo.) | ||
| Costs - Department of Social Services | |||
| Division of Family Services | |||
| Personal service (29 FTE) | ($154,855) | ($190,473) | ($195,234) |
| Fringe benefits | ($43,406) | ($53,390) | ($54,724) |
| Expense and equipment | ($88,497) | ($36,507) | ($37,602) |
| Total Costs - Division of Family Services | ($286,758) | ($280,433) | ($287,560) |
| Costs - Department of Social Services | |||
| Division of Data Processing | |||
| Personal service (1 FTE) | ($6,459) | ($7,945) | ($8,144) |
| Fringe benefits | ($1,810) | ($2,227) | ($2,283) |
| Expense and equipment | ($1,882) | ($42) | ($43) |
| Total Costs - Division of Data Processing | ($10,151) | ($10,214) | ($10,470) |
| ($6,744,279) | ($11,169,903) | ($12,561,060) | |
|
ESTIMATED NET EFFECT ON |
to | to | to |
| GENERAL REVENUE FUND* | ($6,909,857) | ($11,921,002) | ($12,810,976) |
| * Subject to appropriation. | |||
| HEALTH INITIATIVE FUND | |||
| Costs - Department of Social Services | |||
| Division of Medical Services | |||
| Medical Assistance Payments | ($3,100,000) | ($4,506,802) | ($5,543,085) |
|
ESTIMATED NET EFFECT ON |
|||
| HEALTH INITIATIVE FUND | ($3,100,000) | ($4,506,802) | ($5,543,085) |
| FEDERAL FUNDS | |||
| Income - Department of Social Services | |||
| $50,126,812 | $66,731,968 | $71,902,491 | |
| to | to | to | |
| Medicaid Reimbursements | $57,006,331 | $75,698,304 | $81,459,343 |
| FISCAL IMPACT - State Government | FY 1999 | FY 2000 | FY 2001 |
| (continued) | (10 Mo.) | ||
| Costs - Department of Social Services | |||
| Division of Medical Services | |||
| Contracted Studies | $0 | ($119,147) | ($119,147) |
| Medical Assistance Payments | ($42,505,759) | ($58,898,235) | ($63,989,188) |
| $0 to | $0 to | $0 to | |
| Outreach Program | ($429,386) | ($596,703) | ($648,093) |
| ($42,505,759) | ($59,017,382) | ($64,108,335) | |
| to | to | to | |
| Total Costs - Division of Medical Services | ($42,935,145) | ($59,614,085) | ($64,756,428) |
| Costs - Department of Social Services | |||
| Division of Family Services | |||
| Personal service (29 FTE) | ($418,684) | ($514,980) | ($527,855) |
| Fringe benefits | ($117,357) | ($144,349) | ($147,958) |
| Expense and equipment | ($209,528) | ($98,705) | ($101,666) |
| Total Costs - Division of Family Services | ($745,569) | ($758,034) | ($777,479) |
| Costs - Department of Social Services | |||
| Division of Data Processing | |||
| Personal service (1 FTE) | ($17,465) | ($21,481) | ($22,018) |
| Fringe benefits | ($4,895) | ($6,021) | ($6,172) |
| Expense and equipment | ($5,089) | ($113) | ($117) |
| Total Costs - Division of Data Processing | ($27,229) | ($27,615) | ($28,307) |
| Costs - DOS-Division of Medical Services | |||
| Federal Reimbursements Allowance | |||
| Medical Assistance Payments | ($6,848,255) | ($6,928,937) | ($6,988,370) |
| Total Costs - Division of Medical Services | ($6,848,255) | ($6,928,937) | ($6,988,370) |
|
ESTIMATED NET EFFECT |
|||
| ON FEDERAL FUNDS* | $0 | $0 | $0 |
| * Subject to appropriation. | |||
| FISCAL IMPACT - Local Government | FY 1999 | FY 2000 | FY 2001 |
| (10 Mo.) | |||
| LOCAL HEALTH AGENCY FUNDS | |||
| Revenue | $0 to | $0 to | $0 to |
| Title XXI Funds and State Match Funds | $594,964 | $826,802 | $898,009 |
| Costs | $0 to | $0 to | $0 to |
| Children's Health Programs | ($594,964) | ($826,802) | ($898,009) |
|
ESTIMATED NET EFFECT ON LOCAL | |||
| HEALTH AGENCY FUNDS | $0 | $0 | $0 |
FISCAL IMPACT - Small Business
Small businesses would be expected to be fiscally impacted to the extent that they would incur additional income and costs due to increased services provided as a result of the requirements.
DESCRIPTION
This proposal expands health care coverage for children. It extends coverage under the Department of Social Services to include all uninsured Missouri children under the age of 19 from families with available incomes under 300% of the federal poverty level. For a family of four, this includes families with available incomes up to $48,150. The medical insurance coverage provided shall equal the coverage provided for in Section 208.152, except non-emergency transportation.
Uninsured children are defined as children who have been without access to employer subsidized health care insurance for six months.
The proposal also requires $5 co-payments for children's health care for families with incomes between 186% and 225% of the federal poverty level. Parents and guardians of uninsured children with incomes between 226% and 300% of the federal poverty level who do not have access to affordable employer-sponsored health care insurance may participate after a 30 day waiting period. However, these persons are required to pay co-payments and premiums equal to the requirements of the Missouri Consolidated Health Care Plan. Cost sharing for these individuals shall not exceed 5% of such families income for the years involved.
DESCRIPTION (continued)
The proposal also requires the clients to annually demonstrate that their total net worth does not exceed $250,000 in total value, furnish social security numbers for the children, cooperate with the Department of Social Services for pursuing third party insurers, and demonstrate upon request the child's participation in wellness programs.
The proposal also authorized the Department of Social Services to commission a study one year after the program's implementation, and annually thereafter, to study the impact of this program on providing a comprehensive array of community-based wrap around services for seriously emotionally disturbed children affected by substance abuse.
The proposal requires the Department of Social Services to file an annual report detailing the effect of the program on health care in Missouri, including the overall cost of the program to the state. The proposal also requires the department to establish a program to help identify children eligible for these extended benefits.
The proposal also authorizes the Department of Social Services to commission a study one year after the program's implementation to study the negative effects of this new program on private health insurance coverage.
The proposal does not allow funds provided for by this proposal to be used to encourage, counsel or refer for abortion unless the abortion is done to save the life of the mother or if the unborn child is the result of rape or incest.
The Department of Social Services must comply with Chapter 536 when writing the rules and regulations to implement the provisions of this proposal.
The proposal also requires that 10% of any federal funds received under the provisions of Title XXI of the Social Security Act and 10% of any state matching funds to be used for outlays through the Department of Health to local public health agencies for children's health programs.
The program will terminate on July 1, 2002.
This legislation is not federally mandated, would not duplicate any other program and could require additional capital improvements or rental space.
SOURCES OF INFORMATION
Department of Health
Department of Social Services
Department of Mental Health
Department of Transportation
Department of Public Safety - Division of Highway Patrol
Missouri Consolidated Health Care Plan
Department of Conservation
Department of Insurance
Office of Administration
Department of Corrections
Jeanne Jarrett, CPA
Director
June 11, 1998