OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

http: //www. cga. ct. gov/ofa

EMERGENCY CERTIFICATION

SB-1484

AN ACT CONCERNING THE HEALTHFIRST CONNECTICUT AND HEALTHY KIDS INITIATIVES.

OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

Various State Agencies

GF - See Below

Municipal Impact: None

Explanation

Section 1 requires the Department of Social Services (DSS) to amend the state Medicaid plan to include foreign language interpreting services. The cost of this change will be dependent upon the structure of the service included in the state plan amendment. Estimates of providing this service have ranged up to $4,700,000 annually for face to face interpreters. These costs would be reimbursed 50% by the federal government under the Medicaid program. sHB 7077 (the Budget Bill, as reported by the Appropriations Committee) contains $4. 7 million annually for this change.

Section 2 requires DSS to seek a federal waiver to enroll State Administered General Assistance (SAGA) clients up to 100% of the Federal Poverty Level (FPL) in the Medicaid program. The bill does not change the current eligibility levels in the SAGA program. It is therefore assumed that should such a waiver be obtained, the state would have to make further statutory changes to increase the SAGA eligibility levels. DSS may incur an administrative cost of up to $200,000 should they be required to develop a full Medicaid waiver in order to make these changes.

Currently, the state receives federal reimbursement for a portion of SAGA hospital costs under the Disproportionate Share Hospital program. A waiver enrolling SAGA clients into Medicaid would enable the state to receive a 50% reimbursement on all SAGA medical costs. The impact of this would depend upon the conditions of the federal waiver. Should the state be able to enroll all SAGA clients in Medicaid while retaining the current program structure and benefits, the additional federal funds would basically offset the costs of a SAGA eligibility expansion to 100% FPL. However, as the Medicaid benefits package is richer than the SAGA package, and is provided on a full entitlement basis, the federal government, if they choose to accept such a waiver, may require the state to make significant changes to the SAGA program. Therefore, the net impact of this proposal is not known.

Section 3 expands eligibility for parents of children enrolled in the HUSKY A program from 150% of the federal poverty level (FPL) to 185% FPL. The Office of Fiscal Analysis (OFA) estimates that this will add an additional 9,700 clients to the program when fully annualized, at a cost of $17,025,000 in FY08 and $22,700,000 in FY09. These costs would be reimbursed 50% by the federal government under the Medicaid program. sHB 7077 contains these amounts for this change.

Sections 4 and 12 expand Medicaid coverage for pregnant women from 185% FPL to 250% FPL, and require DSS to seek an SCHIP waiver for this expanded population. OFA estimates that this expansion would cost $3,500,000 annually. These costs would be eligible for 50% federal reimbursement (65% if the federal government approvers the SCHIP waiver). sHB 7077 contains this amount for the expansion.

Sections 4 and 6 require expedited HUSKY B enrollment of uninsured newborns and requires DSS to pay any premium costs for the first two months of coverage. There are approximately 90 uninsured births monthly in Connecticut. Enrolling these children in HUSKY B and paying full premiums for the first two months is expected to cost $2,700,000 in FY08 and $4,600,000 in FY09. These costs would be 65% reimbursable under the federal SCHIP program. sHB 7077 contains $6,600,000 in FY08 and $12,800,000 in FY09 to cover such children for six months after birth.

Sections 5 and 6 require DSS to establish a centralized unit responsible for processing all HUSKY (both A and B) applications. This change is expected to streamline the application processes for HUSKY A and HUSKY B, and will provide eligible clients with more continuous medical coverage. DSS will incur additional administrative costs to centralize these processes, but may also incur offsetting administrative savings through a reduction in unnecessary reapplications.

Section 6, 7 and 10 increase the eligibility limits for the HUSKY plan, part B from 300% of the Federal Poverty Level (FPL) to 400% FPL. Families enrolled in this group would be required to pay $50 per child, per month, with a family cap of $75 per month. These sections further require DSS to implement premium assistance for eligible individuals in this group who have cost effective access to private insurance.

It is estimated that this expansion will enroll an additional 7,100 children when fully annualized in FY09. This expansion is expected to cost $6,000,000 in FY08 and $9,800,000 in FY09. sHB 7077 contains no funding for this initiative.

Sections 8 and 9 require DSS to increase outreach and maximize enrollment of eligible children and adults in the HUSKY programs. Increased outreach will result in increased administrative costs, the extent of which is dependent upon the outreach mechanisms used. Should such outreach efforts succeed, additional enrollment in these programs would result in additional state costs. sHB 7077 contains $1 million annually for enhanced HUSKY outreach.

Section 11 requires the Department of Public Health (DPH) to establish an on-line license renewal system for physicians, nurses and dentists by 7/1/08. The agency will incur an FY 08 cost of approximately $1. 64 million to implement the system within this timeframe. This includes

One-time costs of purchasing/developing new web based licensure application and database system

$1,000,000

One-time consultant charges related to staff training

362,000

Department of Information Technology (DoIT) hosting fees

180,000

Software license/maintenance fees

50,000

Conveyance Fees (re: processing credit card payments)

50,000

Total – Year 1 Costs

$1,642,000

An FY 09 cost of $340,000 would be incurred, associated with ongoing DoIT hosting, license/maintenance, and conveyance fees as well as second year consultant charges ($60,000). Commencing in FY 10, costs would fall to $280,000 annually as the consultant services would no longer be required.

It should be noted that sHB 7077 includes $1. 17 million in FY 08 and $170,000 in FY 10 to support costs of initiating implementation of an on-line licensure system.

Section 13 requires DSS, in consultation with the Department of Public Health (DPH), to develop a plan to implement a system of preventative health care services for children in the HUSKY programs. The departments would likely incur administrative costs in developing such a plan. Further state costs would be incurred should this plan include services over and above those currently available in the HUSKY plans. These efforts could also lead to savings should they achieve better health outcomes. The extent of these costs and savings cannot be known until such a system is developed.

Section 14 requires DSS, in consultation with the Departments of Public Health and Children and Families, to establish a child health quality improvement program. The departments would likely incur administrative costs in establishing such a program. Further state costs would be incurred should this program include services over and above those currently available in the HUSKY plans or result in increased utilization. These efforts could also lead to savings should they achieve better health outcomes. The extent of these costs and savings cannot be known until such a program is developed. Section 35 of the bill appropriates $150,000 in FY08 for this effort

Sections 15 through 17 expand health insurance coverage to qualified adult children up to age 26. Based on data provided by the Office of the State Comptroller, it is anticipated that the state as an employer will provide coverage to an additional 3,100 adult dependent children when the state's health contracts are renewed in FY 09. The estimated FY 09 cost associated with the expansion of coverage is approximately $8 million. The budget, sHB 7077 as approved by the Appropriations Committee, does not contain funding in the state health plan accounts for this increase in coverage. To the extent that municipal health plans are required to provide the expanded coverage under the bill, there will be increased municipal cost to provide it.

Sections 18 through 21 expands the pool of eligibility for the Connecticut Small Employer Health Reinsurance Pool since the bill increases, from 200% to 300% of the federal poverty level, for low-income employees' annualized wages.   The sections make further changes to the Health Reinsurance Association. There is no cost to the Department of Insurance DOI to carryout these provisions.  

Section 22 would result in a cost to the Office of the Healthcare Advocate (OHA) for additional staff resources to create and maintain a website for consumer health care information. OHA would require a technical consultant to design and create the website. Costs would only be in FY 08, since existing staff would maintain the website, as needed.

Detailed costs appear in the table below:

Item:

FY 08

Consultant

$25,000

Licensing & access fees

$10,000

Total

$35,000

Since the bill requires these provisions to be implemented within available appropriations, the agency would have to redirect existing resources in order to comply.

Section 23 requires that employers allow employees to make health insurance premium payments with pre-tax dollars. As this is the current practice for the state as an employer, there is no fiscal impact.

Section 24 The Department of Public Health will incur an approximate cost of $750,000 to contract with eHealth Connecticut to develop a statewide health information technology plan. Additional indeterminate costs would be incurred to further develop and/or implement standards, protocols and/or pilot programs.

Section 25 requires DPH, by 7/1/08, to develop electronic data standards to facilitate the development of a state-wide integrated electronic health information system. A one-time significant cost will be incurred by the department in FY08 to retain outside professional services needed to assist in this effort. Section 36 appropriates $250,000 in FY08 for this effort.

Section 26 through 28 establish the Connecticut Health Information Network (CHIN) at the University of Connecticut Health Center (UCHC), as well as a board to oversee CHIN. UCHC will incur significant costs to develop and implement CHIN, and will further incur significant ongoing costs related to the ongoing administration of CHIN. Agencies involved in the oversight board will incur minimal administrative costs to participate on the board. Sections 37 and 38 appropriate $2. 5 million in each year of the biennium to support this effort.

Section 29 requires DSS to inventory all disease management programs implemented under the HUSKY, SAGA and Medicaid programs. DSS must report the findings of this inventory to the General Assembly by January 1, 2008. This will result in a minor administrative cost to the agency.

Section 30 establishes the Connecticut Health First Authority. The bill specifies that the Authority may apply for grants or financial assistance. Any state agencies involved with this authority will incur minimal administrative expenses related to participation. Section 39 appropriates $500,000 to DPH in FY09 to support this effort.

Section 31 establishes a Statewide Primary Care Access Authority. Any state agencies involved with this authority will incur minimal administrative expenses related to participation. The bill specifies that the Authority may retain and employ consultants and assistants, and apply for grants or financial assistance. Given the scope of the required recommendations, it is likely that the cost for such consultants and assistants may be significant. Section 40 appropriates $500,000 to DPH in FY09 to support this effort.

Section 32 requires the Ad Hoc Committee to Improve Health Care Access through School Based Health Centers to meet at least quarterly, and report annually, to the Public Health and Education Committees. No cost is anticipated to result, as members are not entitled to reimbursement for expenses.

Section 33 requires any newly constructed school based health center (SBHC) to have a separate entrance, on and after 10/1/07. It is anticipated that resulting local costs, if any, will be factored into the decision making process of local education authorities or municipal officials when evaluating proposed SBHC development. Since the state does not routinely provide financial support for SBHC related capital costs, no state fiscal impact is anticipated.

Section 34 specifies that DSS shall increase rates paid to providers of medical and hospital services under the Medicaid program, within available resources. sHB 7077 includes $151,400,000 in FY08 and $167,700,00 in FY09 for a variety of Medicaid rate increases.

Section 41 appropriates $2,500,000 to the DPH for FY 08 to expand and operate SBHC's in priority school districts and areas (federally) designated as health professional shortage areas, medically underserved areas or with a medically underserved population. A potential municipal revenue gain would ensue to the extent that eligible communities receive a portion of this funding.

Section 42 appropriates $500,000 to the DPH for FY 08 for grants to community-based health centers to provide transportation assistance to patients.

Section 43 appropriates $2,000,000 to the DPH for FY 08 for grants to community-based health centers for infrastructure improvements.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.

The preceding Fiscal Impact statement is prepared for the benefit of the members of the General Assembly, solely for the purposes of information, summarization and explanation and does not represent the intent of the General Assembly or either chamber thereof for any purpose.