Colorado Legislative Council Staff
STATE and LOCAL
REVISED FISCAL NOTE
State General Fund Revenue and Expenditure Impact
Federal Funds Expenditure Impact
Cash Funds Expenditure Impact
Local Funds Expenditure Impact
Drafting Number: Prime Sponsor(s): |
LLS 98-205 Rep. Kreutz Sen. Lacy |
Date: Bill Status: Fiscal Analyst: |
February 27, 1998 House Appropriations Janis Baron (866-3523) |
TITLE: CONCERNING THE IMPOSITION OF A RESIDENCY REQUIREMENT FOR ELIGIBILITY FOR THE OLD AGE PENSION.
Summary of Legislation
STATE FISCAL IMPACT SUMMARY |
FY 1998/99 |
FY 1999/00 |
State Revenues* General Fund — Transfer from Old Age Pension Funds |
$ 701,417 |
$ 2,310,417 |
State Expenditures General Fund Old Age Pension Cash Fund Old Age Pension Health & Medical Care Fund County Funds — Cash Funds Exempt Federal Funds |
($ 4,631,540) (591,343) (110,074) 98,550 (5,193,335) |
($ 5,154,318) (2,168,948) (141,469) 326,180 (6,674,428) |
FTE Position Change |
None |
None |
Local Government Impact —The fiscal impact to counties is $98,550 in FY 1998-99 and $326,180 in FY 1999-00. These moneys represent their 20 percent share of the Aid to the Needy Disabled State-Only (AND-SO) Program. |
* Expenditure reductions in the Old Age Pension Program result in a $701,417 reversion (transfer) to the state General Fund in FY 1998-99 and a $2,310,417 reversion in FY 1999-00.
NOTE: The fiscal note is revised to correct a technical error in identifying funding splits for FY 1998-99. The bill was not amended in House HEWI.
The bill adds a requirement that an applicant for Old Age Pension (OAP) benefits must be a resident of the state of Colorado for at least five years immediately preceding application for OAP.
The bill is effective at 12:01 a.m. on the day following the ninety-day period after adjournment sine die of the General Assembly, or on the date of the official declaration of the vote of the people as proclaimed by the Governor, if a referendum petition is filed pursuant to Article V, Section 1 (3) of the State Constitution. Residency requirements apply to persons applying for OAP on or after the effective date.
State Expenditures
NOTE: For the purposes of calculating expenditures for this fiscal note, an effective date of September 1, 1998, was used.
Department of Human Services. The establishment of a 5-year residency requirement will reduce expenditures in the OAP Program and increase expenditures in the AND-SO Program, resulting in a net savings of ($98,591) for FY 1998-99.
OAP and AND-SO Program — ($169,622). Caseloads, cost savings, and increased expenditures for FY 1998-99 and FY 1999-00 are identified in the table below for the OAP and AND-SO client categories served by the department. Assumptions used to arrive at these savings and expenditures are identified in the “Facts and Assumptions” section of this fiscal note.
OAP ELIGIBLES |
FY 1998-99 |
FY 1999-00 |
OAP-A Total Caseload New Cases Monthly # of Ineligible Cases Average Grant Payment Savings |
18,523 573 70 $104.79 (402,900) |
18,523 573 70 $106.37 (1,472,308) |
OAP-B Total Caseload New Cases Monthly # of Ineligible Cases Average Grant Payment Savings |
7,018 107 15 $238.21 (190,654) |
7,018 107 15 $241.78 (2,168,948) |
AND ELIGIBLES |
||
AND-SSI-CS New Cases Monthly Average Grant Payment Expenditures |
48 $72.83 192,271 |
48 $75.08 713,560 |
AND-SO New Cases Monthly Average Grant Payment Expenditures |
18 $234.00 231,660 |
18 $239.00 851,796 |
Total General Fund County Funds — Cash Funds Exempt OAP Fund |
($ 169,622) 339,145 84,786 (593,553) |
($ 603,592) 1,252,285 313,071 (2,168,948) |
Systems Changes and County Staff — $71,031. The department will require $2,210 for 34 hours ($65/hour) of systems changes to its Client-Oriented Information Network in FY 1998-99. County staff will be required to input, track and edit residency data, and perform approvals or denials based upon the new residency requirements. Additionally, the equivalent of 2.0 FTE county staff (technicians) will be needed to verify residency for each new applicant. It is estimated that this will add 30 minutes per client to the application process. Total personal services costs for FY 1998-99 are identified at $68,821 and $65,545 for FY 1999-00. Beginning in FY 1997-98, several programs administered by counties were block granted to them with no FTE authorization. Thus, funds are noted but FTE authorization is not included in this fiscal note.
Department of Health Care Policy and Financing. The establishment of a 5-year residency requirement will reduce expenditures in the department, resulting in ($10,329,151) in savings for FY 1998-99. OAP recipients who fail to meet the residency requirement will be deemed ineligible and thus denied Medicaid benefits or medical services provided through the state only Health and Medical Care Fund. Caseload reductions and cost savings are identified in the table below for each OAP client category. Assumptions used to arrive at these savings are identified in the “Facts and Assumptions” section of this fiscal note.
OAP ELIGIBLES |
FY 1998-99 |
FY 1999-00 |
OAP-A Total Caseload New Cases Annually # of Ineligible Cases Annually Average Medical Benefit Cost Savings |
34,107 6,859 837 $13,952.88 (9,729,668) |
34,789 6,996 854 $14,650.52 (12,504,516) |
OAP-B Total Caseload New Cases Annually # of Ineligible Cases Annually Average Medical Benefit Cost Savings |
4,864 482 66 $8,958.73 (489,408) |
4,961 492 67 $9,406.67 (628,962) |
OAP-State Only Total Caseload New Cases Annually # of Ineligible Cases Annually Average Medical Benefit Cost Savings |
3,098 307 42 $3,163.53 (110,074) |
3,160 313 43 $3,321.71 (141,469) |
Total Savings General Fund Federal Funds OAP Health & Medical Care Fund |
($10,329,151) (5,025,742) (5,193,335) (110,074) |
($13,274,937) (6,459,040) (6,674,428) (141,469) |
Maintenance of Effort Considerations
The savings in this bill may result in the state’s inability to meet its MOE agreement with the Social Security Administration. This agreement stipulates that the state will expend the same amount of money or more, on a calendar year basis, for specified Supplemental Security Income (SSI) recipients. Failure to comply with this agreement or failure to change the agreement with the federal government may jeopardize federal funding for the state’s Medicaid program.
Local Government Impact
The fiscal impact to counties is $98,550 in FY 1998-99 and $326,180 in FY 1999-00. These moneys represent their 20 percent share of the Aid to the Needy Disabled State-Only Program.
Spending Authority
The fiscal note indicates the following appropriations for FY 1998-99:
Department of Human Services:
General Fund $ 394,202
County Funds — Cash Funds Exempt 98,550
OAP Fund (591,343)
Department of Health Care Policy and Financing:
General Fund $ (5,025,742)
Federal Funds (5,193,335)
OAP Health and Medical Care Fund (110,074)
Departments Contacted
Department of Human Services
Department of Health Care Policy and Financing
Omissions and Technical or Mechanical Defects
1. Residency Requirement — The US and Colorado State Supreme Court have ruled on the illegality of residency requirements relative to welfare programs.
2. MOE — Under the bill, persons eligible for the Colorado Supplement Program would be excluded from that supplement for the first five years, thus raising the issue of “equitable treatment”.
FACTS AND ASSUMPTIONS
Assumptions — Department of Human Services
1. FY 1998-99 OAP-A caseload will equal 18,523.
2. FY 1998-99 OAP-B caseload will equal 7,018.
3. Assumes 573 new OAP-A applicants monthly and 107 OAP-B applicants monthly.
4. OAP-A — assumes 12.2% of new clients will not meet the residency requirement (70 clients).
5. OAP-B — assumes 13.6% of new clients will not meet the residency requirement (15).
6. Applicants deemed ineligible for OAP benefits will apply and receive benefits through the AND program.
7. Increases in the AND-SSI-CS caseload are estimated at 48 per month, increases in the AND-SO caseload are estimated at 18 per month.
8. Verifying residency requirements will add 30 minutes to the application process.
9. Average payments for FY 1998-99: OAP-A = $104.79; OAP-B = $238.21; AND-SSI-CS = $72.83; and AND-SO = $234.00.
10. Assumes a 1.5% increase in average payment for OAP in FY 1999-00.
11. Assumes a 3.1% increase in the AND-SSI-CS payment for FY 1999-00.
12. Assumes a 2.1% increase in the AND-SO payment for FY 1999-00.
Assumptions — Department of Health Care Policy and Financing
1. FY 1998-99 OAP-A caseload will equal 34,107.
2. FY 1998-99 OAP-B caseload will equal 4,864.
3. FY 1998-99 OAP-SO caseload will equal 3,098.
4. Assumes 2 % caseload growth annually for OAP-A, OAP-B, and OAP-SO.
5. OAP-A — assumes 20.11% of total caseload is comprised of new applicants annually.
6. OAP-B and OAP- SO — assumes 9.91% of total caseload is comprised of new applicants annually.
7. OAP-A — assumes 12.2% of new clients will not meet the residency requirement.
8. OAP-B and OAP-SO — assumes 13.6% of new clients will not meet the residency requirement.
9. Assumes $13,952.88 is the average Medicaid cost per client for OAP-A recipients in FY 1998-99.
10. Assumes $8,958.73 is the average Medicaid cost per client for OAP-B recipients in FY 1998-99.
11. Assumes $3,163.53 is the average medical benefit package for OAP-SO recipients receiving services through the Health and Medical Care Fund.
12. Assumes a 5% annual increase in the average medical cost per client.