Fiscal Impact Summary	FY 1999/2000	FY 2000/2001
State Revenues
State Expenditures General Fund* Cash Fund Exempt Federal Fund		$ 27,229,391 269,318 30,754,971
FTE Position Change		0.0 FTE
Other State Impact: None.
Effective Date: Upon signature of the Governor.
Appropriation Summary for FY 1999-2000: None required.
Local Government Impact: The counties' 20 percent share for conducting Medicaid eligibility determinations and providing case management services is estimated at $269,318 in FY 2000-01.

* Total expenditures qualifying for moneys received by the state under the tobacco litigation master settlement agreement are identified at $27,229,391 for FY 2000-01. The fiscal note does not assume that the county share required for conducting Medicaid eligibility determinations and providing case management services qualifies for moneys under the tobacco litigation master settlement agreement.

Colorado's share of the total $206 billion payout by tobacco companies is $2.7 billion paid over 25 years until 2025. An initial payment of $32.9 million has been made to the state and is currently held in an escrow account. Its release to the state is anticipated no later than June 2000 — the last month of FY 1999-00. The second payment, due in 2000, is estimated at $87.9 million.

The bill declares the intent of the General Assembly to maximize the state's opportunities to receive enhanced federal matching funds in order to provide funds to serve children under the Children's Basic Health Plan (CBHP).

As amended, by the House Appropriations Committee, April 23, 1999, the bill includes the following provisions:

• state's the intent of the General Assembly to fund expansion of CBHP with moneys received by the state pursuant to the master settlement agreement;

• state's the intent of the General Assembly that any General Fund moneys required to expand health care services related to the expansion of CBHP shall also be paid out of tobacco settlement moneys;

• requires, beginning in FY 2000-01, the General Assembly to appropriate moneys received annually pursuant to the master settlement agreement to the Children's Basic Health Plan Trust Fund, an amount necessary to provide services to all actual and potential enrollees;

• requires that the appropriated level to the Trust Fund not exceed 30 percent of the total amount received by the state during the preceding fiscal year; and

• requires that the schedule of health care services provided under CBHP include dental services.

The effective date for implementing the expanded CBHP is July 1, 2000. The bill requires the General Assembly to appropriate up to 30 percent of tobacco settlement moneys received by the state to the Children's Basic Health Plan Trust Fund beginning in FY 2000-01. Due to the effective date, the fiscal note assumes that the necessary funding to expand CBHP will be provided through the budget process and included in the annual Long Bill for FY 2000-01.

Background. Federal legislation created Title XXI of the Social Security Act and authorized the State Children’s Health Insurance Program (S-CHIP), effective October 1, 1997. Over a five-year period, $24.5 billion will be available to the states, giving them the option of participating and at what level. The federal legislation represents the largest child health program since Medicaid. It will 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. Colorado's federal allocation for federal fiscal year (FFY) 1998 was $41.99 million, available for expenditure for a three-year concurrent period (the FFY 1999 allocation will be $52 million). Federal statute sets a limit on the amount of administrative costs that are matchable — 10 percent of total program expenditures. State legislation regarding S-CHIP includes:

• 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 98-1325, Concerning the Implementation of the Non-Medicaid State Subsidized Insurance Program Known as the "Children's Basic Health Plan" — authorized the Department of Health Care Policy and Financing (DHCPF) to implement CBHP under Title XXI of the Social Security Act. FY 1998-99 total funding for CBHP was $30,361,681, appropriated accordingly: HB 98-1401, Long Appropriations Act —$25,305,167; and SB 98-194, Concerning Cash Funds of the State — $5,056,514.

Department of Health Care Policy and Financing. The department will require additional funding in FY 2000-01 to serve more children in both CBHP and Medicaid as a result of this bill. Costs will also be incurred in the Departments of Human Services (DHS) and Public Health and Environment (DPHE) for their functions under the bill. All moneys except county funds would be appropriated in DHCPF and transferred to DHS and DPHE.

CBHP —Additional state funding is needed to maximize federal funding for CBHP. Benefits will be expanded to include dental services, additional therapies, expanded mental health plus other benefits based upon a comprehensive commercial insurance model. The FY 1999-00 Long Appropriations Bill includes increases in funding for DHCPF relative to expansion of CBHP: (1) caseload — 33,119 children in CBHP (an increase of 15,000 over the anticipated June 1999 estimate); (2) premiums — average annual cost of $857; and (3) staff — 3.5 FTE administrative staff for CBHP. The estimated premium rate under HB99-1093 is $1,243 per year per child vs. the average annual cost of $857 provided in the FY 1999-00 Long Bill, SB 99-215. Based upon a number of analyses, DHCPF estimates there are 103,000 uninsured children in Colorado below 200 percent of poverty. These children are either CBHP eligible or Medicaid eligible. Of the 103,000 children, it is estimated that 42,723 are CBHP eligible (an increase of 17,426 over the FY 1998-99 appropriated caseload of 25,297). The total incremental cost of maximizing federal funding for CBHP is $29,349,775 in FY 2000-01. Of the total amount, $12,940,225 will qualify for settlement moneys.

Medicaid Categories — As a result of expanding CBHP, funding will be needed to serve an increased number of children in the Baby Care Program children category; and Aid to Families with Dependent Children (AFDC) - children category. Of the 103,000 uninsured children in Colorado, it is assumed that 22,844 additional Medicaid eligible children will be served; predicated on an increase in total applications for CBHP. It is estimated that there will be 5,711 children served in the Baby Care Program and 17,133 children served in AFDC-Children. The average annual cost per child is estimated at $1,105.99 and $1,148.45 respectively. The total cost to serve more Medicaid eligible children as a result of CBHP expansion is estimated at $26,496,127 in FY 2000-01. Of the total amount, $13,222,074 will qualify for settlement moneys.

Department of Human Services. The department will require $2,407,778 total funding in FY 2000-01: $1,346,592 for county staff to provide eligibility determinations and case management services and $1,061,186 for the Medicaid Mental Health Capitation Program.

Eligibility Determinations — Of the increased applications for children's health services, it is estimated that 22,844 Medicaid-eligible children will apply equally each month over the next three years and remain eligible for at least two years. County departments of social services will be responsible for administration of these Medicaid cases. For FY 2000-01, there will be a need for 35.9 FTE additional county staff (21.8 FTE eligibility technicians, and 14.1 FTE associated supervisory/support staff). FTE authorization is not required for county staff, the FTE identified in the fiscal note are noted for information only. That portion of the total qualifying for settlement moneys is $537,560.

Medicaid Mental Health Capitation Program — It is estimated that 6,730 children will be eligible for services under the Medicaid Mental Health Capitation Program. Services are provided at an annual rate of $157.68 per client. Thus, the program will require $1,061,186 in FY 2000-01. That portion of the total qualifying for settlement moneys is $529,532.

Department of Public Health and Environment. The department will require a total of $506,451 in FY 2000-01. DHCPF will require $22.17 per child (22,844 new children) for case management administration in the Early and Periodic Screening, Diagnosis and Treatment Program. That portion of the total qualifying for settlement moneys is $253,226.

County staff conduct Medicaid eligibility determinations and provide case management services in Medicaid cases. The counties' 20 percent share to perform Medicaid eligibility determinations and provide case management under the bill is estimated at $269,318 in FY 2000-01. The fiscal note assumes that county funds will not qualify for settlement moneys.