LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 2, 2001
TO: Honorable John T. Smithee, Chair, House Committee on
Insurance
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB2430 by Naishtat (Relating to a consumer assistance
program for health benefit plan consumers.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB2430, As Introduced: positive impact of $0 through the biennium *
* ending August 31, 2003. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
**************************************************************************
General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $0 *
* 2003 0 *
* 2004 0 *
* 2005 0 *
* 2006 0 *
****************************************************
All Funds, Five-Year Impact:
***************************************************************************
*Fiscal Probable Savings/(Cost) from Probable Revenue Gain/(Loss) *
* Year Texas Department of Insurance from Texas Department of *
* Operating Fund Account/ Insurance Operating Fund *
* GR-Dedicated Account/ GR-Dedicated *
* 0036 0036 *
* 2002 $(2,463,977) $2,463,977 *
* 2003 (3,565,217) 3,565,217 *
* 2004 (3,565,217) 3,565,217 *
* 2005 (3,565,217) 3,565,217 *
* 2006 (3,565,217) 3,565,217 *
***************************************************************************
Fiscal Analysis
The bill would establish the "Health Benefit Plan Consumers Assistance
Program." The Commissioner of Insurance would be authorized to contract
with a non-profit organization to operate it. The contractor could not
be a health plan issuer or provider, but must have expertise in providing
direct assistance to health plan consumers with problems or concerns.
The program would have very broad responsibilities. First, it would be
open to consumers under virtually any type of health and accident plan,
whether individual or group. This would include plans issued through
insurers and Health Maintenance Organizations (HMOs), Multiple Employer
Welfare Arrangements (MEWAs), Children's Health Insurance Program (CHIP),
Employees Retirement System (ERS), Teachers Retirement System (TRS),
and Medicare and Medicaid, although not including Employee Retirement
Income Security Act (ERISA) plans.
The program would be charged with assisting consumers appealing denials,
terminations, reductions in health care services, or refusals to pay for
such services. This would include utilization review appeals and
Medicare or Medicaid "fair" hearings. It would provide consumers with
information about health plans available and the rights and
responsibilities of enrollees under the plans and operate a toll-free
number and interactive Internet site for consumers to obtain information,
advice and assistance. It would also collect data regarding inquiries,
problems and grievances it handles, periodically distributing analyses of
this data to employers, plan issuers, regulatory agencies and the
public.
The bill would affect HealthSelect, HealthSelect Plus and HMO's in the
Uniform Group Insurance Plan (UGIP). Employees and retirees who
selected HealthSelect and HealthSelect Plus could use the program to
assist them with claims denials and group life and health evidence of
insurability denials. Employees and retirees who selected an HMO in the
UGIP would be under the regulation of TDI for these services. The
Employees Retirement System expects a non-significant increase in court
costs at the State Office of Administrative Hearings.
Methodology
TDI assumes it would contract with a non-profit organization to operate
this new program and it would take at least six months of fiscal year
2002 to implement. According to TDI, given the high consumer interest
in health insurance as well as high volume of phone calls and complaints
TDI handles, there is the potential for hundreds of thousands of Texans
to be referred to the program.
Based on fiscal year 2000, TDI s Information Assistance operators
answered about 126,000 Accident and Health (A&H) calls. This figure
equals about one percent of insured Texans. Applying this percentage to
the total Texas population of 21 million, the call center could receive
210,000 calls per year. TDI also received about 19,700 A&H complaints,
compared to 126,000 A&H phone calls. TDI s experience is that the ratio
of A&H calls to A&H complaints is about 15 percent. Applying this
percentage to the estimated 210,000 calls that TDI could receive, an
estimated 31,500 cases could be handled by the program each year. TDI
estimates that 10 percent or 3,150 cases will go to a hearing.
An Executive Director will provide oversight, direction, and
accountability for the program. In addition, a webmaster would be
responsible for creating and maintaining the program's interactive
Internet site.
It is assumed that TDI would adjust its fees to cover the cost of
implementing the bill.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 454 Texas Department of Insurance, 327 Employees
Retirement System, 323 Teacher Retirement System
LBB Staff: JK, JO, RT, DE