Colorado Legislative Council Staff



Federal Funds Expenditure Impact

Drafting Number:

Prime Sponsor(s):

LLS 98-578

Rep. Owen

Sen. Rizzuto


Bill Status:

Fiscal Analyst:

February 4, 1998

House HEWI

Janis Baron (866-3523)



Summary of Legislation


FY 1997/98

FY 1998/1999

State Revenues

General Fund

Other Fund



State Expenditures

General Fund

Federal Funds

$ 1,810,002

To Be Determined

Through The

Budget Process

FTE Position Change


Local Government Impact — None

            The bill includes the following provisions relating to the “Children’s Basic Health Plan ”:


               increases the age of eligibility for the Children’s Basic Health Plan (CBHP) and the Children’s Health Plan to conform with the age of eligibility for the state’s Subsidized Insurance Program and with the age of eligibility in the federal children’s health plan legislation to less than 19;

               changes the date of implementation of the full package of services under CBHP from July 1, 1998, to March 1, 1998;

               extends the repeal date of CBHP until July 1, 1999, and provides that no new enrollees shall be accepted into the Children’s Health Plan and no new provider contracts shall be made on or after passage of the act;

               creates as a type 1 agency, the Children’s Basic Health Plan Policy Board — identifies composition of the board, requirements and responsibilities of the board, and grants rule-making authority over the implementation and administration of the Children’s Health Plan to the policy board instead of the Department of Health Care Policy and Financing (DHCPF);

               allows the executive director of DHCPF to create an advisory board to the policy board and DHCPF on the implementation and administration of CBHP;

               adds criteria for contracts with managed care plans to allow use of existing essential community providers to the extent that it is cost-effective for the managed care plans and the state, allows DHCPF to contract with essential community providers to provide services in areas of the state where managed care plans are not available, requires DHCPF to contract with more than one managed care plan;

               permits rather than requires DHCPF to allow children with gross family incomes exceeding 185 percent of the federal poverty level to enroll in CBHP without a subsidy; and

               includes a notation of federal funds anticipated to be received to implement the act.

            The bill is effective upon signature of the Governor.

State Expenditures

            Section 26-19-197 of the bill changes the implementation date of the full package of services under CBHP from July 1, 1998, to March 1, 1998. This change in dates will allow DHCPF to draw down $1,810,002 in Title XXI federal funds.

            HB 97-1304, Concerning the Creation of the Children’s Basic Health Plan — authorized an insurance program for low-income uninsured children, up to 18 years of age and below 185 percent of the federal poverty level. HB 97-1304 appropriated $2 million General Fund in start-up funding to the Children’s Basic Health Plan Trust Fund, and specified that funding for the program come from health care savings, consolidations, reforms, and donations. SB 97-05, Concerning Medicaid Managed Care, specified that net savings to the state associated with moving Medicaid clients into managed care be earmarked for CBHP and a grants program to assist essential community provides to serve medically indigent persons. DHCPF reports $2.9 million of General Fund savings in FY 1998-99 will be available for CBHP.

            Federal Legislation: State Children’s Health Insurance Program (S-CHIP) — authorized by Congress and effective October 1, 1997, created Title XXI of the Social Security Act. Over a five-year period, $24.5 billion will be available to the states, giving them the option of whether to participate and at what level. The federal legislation represents the largest child health program since Medicaid. It would cover low-income uninsured children below 200 percent of the federal poverty level, up to 19 years of age. Services provided must mirror a standard health care insurance package, such as that provided by a state’s largest health plan. It is estimated that Colorado would receive $42 million in federal funds annually, and would have to provide $21 million in state funds to receive the full federal match. Federal statute sets a limit on the amount of administrative costs that are matchable — 10 percent of total program expenditures.

            The $2 million General Fund appropriation to the Children’s Basic Health Plan Trust Fund in HB 97-1304, will serve as match for the $1.8 million federal funds anticipated. The administrative costs for the CBHP Policy Board are estimated at $2,450 for FY 1997-98, and will be paid out of moneys appropriated in HB 97-1304. Total expenditures for CBHP for FY 1997-98 are identified in Table 1 on page 3. The appropriation for CBHP for FY 1998-99 and beyond will be determined through the annual budget process.



HB 97-1304

Federal Funds



Children’s Basic Health Plan Program

Children’s Health Plan Phase Out


$ 295,133




$ 219,505




$ 514,638





$ 1,645,101

$ 1,810,002

$ 3,455,103

Spending Authority

            No spending authority is required for FY 1997-98. Section 15 of the bill notes that the Department of Health Care Policy and Financing will receive $1,810,002 in federal funds for the implementation of the act, and that the funds are not appropriated.

Departments Contacted

            Health Care Policy and Financing

            Human Services