Colorado Legislative Council Staff

STATE AND LOCAL

FISCAL IMPACT

TITLE:            CONCERNING A GUARANTEED PERIOD OF ELIGIBILITY FOR MEDICAL ASSISTANCE.

Summary of Legislation

            The bill establishes a 12-month guarantee of Medicaid eligibility once eligibility has been established. 

State Expenditures

            Costs will be incurred in both DHCPF and DHS to comply with the bill' requirements. FY 1999-00 costs are estimated at $130,072,746; FY 2000-01 costs are estimated at $132,236,350.

            DHCPF — will require $129,926,475 in total funding in FY 1999-00. Of the total amount, $129,280,599 is required for Medicaid premiums, $11,400 is required for computer programming changes, and $634,476 is required for DHS functions related to Medicaid eligibility determinations.

            Medicaid Premiums. The bill will increase expenditures in the following Medicaid eligibility categories: AFDC/TANF [Aid to Families with Dependent Children/Temporary Aid to Needy Families] Adults; AFDC/TANF Children; Nonpregnant Baby Care Program adults; and Nonpregnant Undocumented Aliens. The bill will not create a fiscal impact for individuals served under the Baby Care Program children, Ribicoff children, Old Age Pension (OAP), or Aid to the Needy Disabled Supplemental Security Income (AND/SSI) Medicaid categories. Based on a DHCPF statistical sampling of recent eligibility files, Medicaid will be extended to individuals in four Medicaid categories under this bill:

            •   Baby Care Program Adults — currently Medicaid eligible 8 months (on average). The bill extends eligibility by 4 months.

            •   AFDC/TANF Adults — currently Medicaid eligible 4 months (on average). The bill extends eligibility by 8 months.

            •   AFDC/TANF Children — currently Medicaid eligible 5 months (on average). The bill extends eligibility by 7 months.

            •   Nonpregnant Undocumented Aliens (adults and children) — currently Medicaid eligible 4.5 months (on average). The bill extends eligibility by 7.5 months.

            The table below identifies the FY 1999-00 costs, caseload and additional months eligible, for the four Medicaid categories affected by the bill.

            Federal Financial Participation. Because the bill conflicts with current federal regulations (see the Omissions and Technical or Mechanical Defects section of this fiscal note), federal financial participation will not be available for any adult categories. Extension of Medicaid to the adult population is funded solely through General Fund. The federal Balanced Budget Reconciliation Act of 1997 allows for 12 months of Medicaid eligibility of children. Hence, children in both the AFDC/TANF Children and Nonpregnant Undocumented Aliens categories are eligible for federal funds under the bill. The fiscal note assumes that children represent 25 percent of the Nonpregnant Undocumented Aliens category.

            Medicaid Management Information System (MMIS). DHCPF will require 100 hours of program edits to its MMIS at a rate of $114 per hour. Program edits to the MMIS are a one-time cost of $11,400 in FY 1999-00. Of the total amount, 25 percent is General Fund and 75 percent is federal funds.

            DHS — will require a total of $780,748 in FY 1999-00. The bill requires Medicaid benefits to continue no longer than 12 months from the end of the month the client is approved until there has been a Medicaid redetermination of eligibility, effective July 1, 1999. It is assumed that: (1) there will no longer be redeterminations past due or the client will be denied Medicaid; and (2) there will no longer be 24-month certifications of households considered to be stable due to source of income and circumstances. Current Medicaid regulations allow Medicaid clients with stable income and household circumstances to be certified for Medicaid for 24 months. The bill requires all stable households to be redetermined every 12 months. The Medicaid categories that will be affected by eligibility redeterminations are OAP-A, OAP-B, and AND/SSI. County staff will be needed due to the bill's 12 month certification requirement for: (1) Medicaid certifications that are overdue; and (2) due to the elimination of 24 month certifications. It is estimated that 1,043 overdue redeterminations must be done monthly in FY 1999-00, necessitating 21.3 FTE additional county staff (12.8 FTE eligibility technicians plus 8.5 FTE supervisory/support staff).

            Client-Oriented Information Network (COIN). DHS will also require a one-time appropriation of $49,392 for 686 hours of computer programming changes to its COIN system (686 x $72/hour = $49,392). Moneys for DHS costs are appropriated in DHCPF, then transferred to DHS to fund its Medicaid eligibility determination functions.

            Medicaid Mental Health Capitation Program. This DHS program was implemented statewide in FY 1997-98. Because it is a relatively new program, a methodology for determining client projections and costs is currently being developed. Assuming that the rate of turnover (clients exiting and entering) in the capitation program remains constant, the fiscal impact to DHS and the counties will be negligible. If, however, member months were to increase dramatically above the baseline, there could be a workload impact in both providing services and determining eligibility. The fiscal impact to this program cannot be quantified at this time.

            FY 2000-01 — $132,236,350 Total Cost. Using FY 1999-00 assumptions, both DHCPF and DHS will incur costs for Medicaid premiums and redeterminations. Caseload per Medicaid eligible categories, average cost per premium, and redetermination caseload are the factors used for estimating the bill's out-year costs.

Local Government Impact

            County staff conduct Medicaid eligibility determinations. The counties' 20 percent share to perform Medicaid eligibility redeterminations under the bill is estimated at $146,271 in FY 1999-00; and $114,652 in FY 2000-01. As noted above, it is estimated that 1,043 overdue redeterminations must be done monthly in FY 1999-00, necessitating 21.3 FTE additional county staff (12.8 FTE eligibility technicians plus 8.5 FTE supervisory/support staff).

State Appropriations

            The fiscal note indicates that for FY 1999-00, the Department of Health Care Policy and Financing should receive an appropriation of $129,926,475. Of the total amount, $92,871,741 is General Fund and $37,054,734 is federal funds.

            The Department of Human Services should receive an appropriation of $787,747. Of the total amount, $634,476 is a cash funds exempt transfer from the Department of Health Care Policy and Financing and $146,271 is cash funds exempt local funds.

Departments Contacted

            Health Care Policy and Financing

            Human Services

Omissions and Technical or Mechanical Defects

            The bill is in conflict with current federal regulations, accordingly:

            •   42 CFR Ch. IV 435.916 (c) — Mandates that states promptly redetermine eligibility at the time they receive information about changes in a recipient's circumstances that may affect his/her eligibility.

            •   42 CFR Ch. IV 435.916 (2) — Mandates that if states have information about anticipated changes in a recipient's circumstances, they must redetermine eligibility at the appropriate time based on those changes.