Colorado Legislative Council Staff

STATE and LOCAL

REVISED CONDITIONAL FISCAL NOTE

(replaced Fiscal Note dated March 9, 1998)

State General Fund Expenditure Impact

Cash Funds Exempt — Local Expenditure Impact

TITLE:          CONCERNING THE PROGRAM FOR AID TO THE NEEDY DISABLED.

Summary of Legislation

       *     This fiscal note assumes that the moneys necessary to implement the Health and Medical Care Program in FY 2000-01, will be provided through the budget process and are not included in this fiscal note. However, it is estimated that the program will cost in excess of $15 million General Fund.

            As amended, the reengrossed bill includes the following provisions which have a fiscal impact for the state and counties:

            •   Section 26-2-119. Amount of assistance payments — aid to the needy disabled: phases in an increase in the Aid to the Needy Disabled (AND) grant standard over a ten-year period, commencing with FY 1999-00, and provides that no later than FY 2009-10, the AND grant standard will equal the Supplemental Security Income (SSI) grant standard;

            •   Section 26-2-119.5. Health and medical care program — aid to the needy disabled: creates a Health and Medical Care Program for AND recipients in the Department of Health Care Policy and Financing to begin in FY 2000-01, requires the department to report to the HEWI Committees of the General Assembly on or before December 15, 1999, identifying proposals, services, and costs for implementing a Health and Medical Care Program, and requires the State Board of Medical Services to promulgate rules for administering the program.

            The bill is effective only if the voters at the 1998 General Election approve HCR 98-1001, which makes changes to the state’s Old Age Pension Program.

State Expenditures

NOTE: Because implementation of the bill’s provisions is contingent upon voter approval of HCR 98-1001, a constitutional amendment to change the OAP Program at the 1998 General Election, costs identified in this fiscal note are identified as conditional. If approved by the voters, the effective date is assumed to be January 1, 1999.

             The bill requires, that in determining the amount to be appropriated for any increases in the monthly AND State-Only cash grant, the General Assembly shall consider the moneys saved under HCR 98-1001. Presently, HCR 98-1001 is estimated to achieve $144,709 in savings in FY 1999-00 and $624,778 in FY 2000-01.

            Department of Human Services (DHS) — DHS will require the following increased funding to implement the bill’s provisions. Of the total amounts identified, 80 percent is General Fund and 20 percent is cash funds exempt local funds.

            Grant Standard and Caseload. The current grant standard for the AND State-Only Program is $229 per month; the SSI grant standard, effective January 1, 1998, is $494 per month. Current practice provides a cost of living adjustment (COLA) for the SSI grant standard January 1 of each year which averages 3.2 percent. This fiscal note assumes that the base grant standard for the AND State-Only Program will be $239 on January 1, 2000. [DHS requested a $10 increase in the grant standard for the AND State-Only Program, effective January 1, 1999. Funding for this request is included in HB 98-1401, the Long Appropriations Bill.] In accounting for the annual COLA provided for the SSI grant payment, it is estimated that the AND State-Only grant standard must be increased $43 in FY 1999-00, effective January 1, 2000 (net cost to the state will be $35), and $85 in FY 2000-01, effective January 1, 2001 (net cost to the state will be $60). Table 1 on page 3, provides an estimate of the moneys required in each fiscal year through FY 2009-10 to achieve parity between the SSI grant payment and the AND-SO grant payment. The fiscal note assumes a static caseload of 4,097 through FY 2000-01. Although there has been an average annual caseload increase of approximately 1.4 percent in the AND-SO caseload over the past several fiscal years, there was an 0.5 percent decrease in the caseload between FY 1997-98 and the FY 1998-99 appropriated level. This fiscal note assumes that any caseload changes (either increases or decreases) will be addressed through the annual budget process.

            Interim Assistance Reimbursement Payments (IAR). IARs are payments DHS collects from the federal government for clients determined SSI eligible. At the time of AND application, clients meeting the state disability requirements receive benefits immediately (within 40 to 60 days). During the application process clients must simultaneously apply for SSI benefits (a process which may take anywhere from 6 to 12 months to qualify). Once an individual is determined SSI eligible, back payments of SSI benefits are made and cover the application period. The state keeps that portion of the SSI back payments equal to state payments made, thus offsetting program costs. It is estimated that the IAR collection rate will equal 19 percent in FY 1999-00 and 30 percent in subsequent fiscal years. The 19 percent IAR collection rate for FY 1999-00 is based on the assumption that persons receiving AND-SO prior to January 1, 2000, will be required to repay only the $239 per month for the period they received that amount, not the full AND-SO grant reflecting the first year’s grant increase, effective January 1, 2000.

Table 1: Supplemental Security Income and AND Grant Payments

a/    Average SSI Payment reflects an average 3.2% cost of living increase effective January 1 of each calendar year. Thus, the average represents the last six months of one fiscal year and the first six months of the next fiscal year.

b/   The AND grant payment for FY 1998-99 reflects a $10 COLA effective January 1, 1999, as provided in HB 98-1401, the Long Appropriations Bill.

                Department of Health Care Policy and Financing (DHCPF) — will not require any moneys in FY 1998-99 to implement the bill’s provisions. However, DHCPF will require $124,786 General Fund in FY 1999-00. Of that total, $54,036 will be needed for 1.0 FTE administrative program specialist to design and implement a new medical program. (In FY 2000-01 the personal services costs are estimated at $50,236.) Responsibilities will include: research on the population served, development of benefits package, preparation of rules, data analysis, and program management. Additionally, this position will compile the written report (required in the bill), which is due on or before December 15, 1999, to the HEWI Committees of the General Assembly. The report is to include:

            •   alternative proposals and expenses of basic health plan packages and services for the Health and Medical Care Program; and

            •   a description of copayments and managed care requirements for each of the alternative proposals.

                Because the bill requires that the Health and Medical Care Program begin in FY 2000-01, DHCPF will require moneys in FY 1999-00 for systems changes to the Medicaid Management Information Systems (MMIS) and the Client-Oriented Information Network (COIN) to ensure that the program can be implemented July 1, 2000. MMIS costs are based on historical hours needed to add new programs/benefits and per hour costs dictated by the contract fiscal agent. COIN hours are based on historical hours needed and per hour costs DHS will charge DHCPF. MMIS will require $54,500 in FY 1999-00 (500 hours at $109/hour) and $5,700 in FY 2000-01 (50 hours at $114/hour). COIN will require $16,250 in FY 1999-00 (250 hours at $65/hour) and $3,250 in FY 2000-01 (50 hours at $65/hour).

                FY 2000-01 — Health and Medical Care Program. The bill requires that the Health and Medical Care Program begin in FY 2000-01. Persons eligible for this new program currently do not receive health and medical services. At a minimum, the program is expected to cost in excess of $15 million. The fiscal note does not include specific costs for the Health and Medical Care Program because review of the written report on the program, due to the General Assembly on December 1, 1999, may require statutory changes affecting implementation of the program. Additionally, the assumptions used to identify the cost per client three fiscal years out, in all likelihood, will change prior to actual implementation of the program. The fiscal note assumes that funding to implement the program in FY 2000-01 will be addressed through the budget process.

Local Government Impact

                  The counties’ 20 percent share for increased grant payments in the Aid to the Needy Disabled, State-Only Program is $172,074 in FY 1999-00 and $589,968 in FY 2000-01. There are no county costs in FY 1998-99.

Spending Authority

                The fiscal note indicates that no appropriation is required in FY 1998-99.

Departments Contacted 

                Human Services 

                Health Care Policy and Financing