HBA-MPM H.B. 2406 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2406 By: Gray Public Health 3/30/2001 Introduced BACKGROUND AND PURPOSE Currently, there are many limitations on the availability of adequate health insurance for elderly Texans. The Medicare program does not offer prescription drug benefits, which can be one of the most expensive categories of health care costs. Additionally, some Medicare providers and health management organizations are withdrawing from the Medicare program, citing reasons such as low reimbursement rates. Since most elderly Texans are also retired and live on fixed incomes, they generally lack health insurance coverage through an employer and are unable to afford private insurance. A health benefit plan to supplement Medicaid and Medicare coverage for elderly citizens would greatly aid this population in obtaining health care services. House Bill 2406 establishes a supplemental state health insurance program for Texans 65 years of age and older or disabled Texans 55 years of age and older that is provided free of cost for those at or below 150 percent of the federal poverty level. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Health and Human Services Commission in SECTION 1 (Sections 65.051- 65.053, 65.057, 65.058, and 65.151, Health and Safety Code) and to the Texas Department of Insurance in SECTION 1 (Section 65.054, Health and Safety Code) of this bill. ANALYSIS House Bill 2406 amends the Health and Safety Code to establish a supplemental health benefit plan (plan) to provide health care benefits to supplement Medicare or Medicaid benefits for low-income Texas residents who are 65 years of age or older or 55 years of age or older and unable to work full-time because of a disability (Sec. 65.001). H.B. 2406 requires the Health and Human Services Commission (HHSC), no later than September 1, 2002, to develop and implement the plan. The bill provides that HHSC is responsible for making policy for the plan and is prohibited from delegating this duty. The bill require HHSC to adopt rules as necessary to implement the provisions of this bill. HHSC is authorized to require the Texas Department of Health (TDH), the Texas Department of Human Services (DHS), or any other health and human services agency to adopt with the approval of HHSC any rules necessary to implement the plan. The bill authorizes HHSC with the consent of another agency including the Texas Department of Insurance (TDI) to delegate to that agency the authority to adopt with HHSC's approval any rules that may be necessary to implement the plan. The bill authorizes HHSC to conduct a review of each entity entering into a contract to implement the plan or provide health benefit services for the plan to ensure that the entity is available, prepared, and able to fulfill its obligations (Sec. 65.051 and SECTION 3). The bill sets forth the duties of HHSC, TDH, DHS, and TDI in developing and implementing the plan and requires HHSC or TDH and DHS under the direction of and in consultation with HHSC to adopt rules as necessary to implement each agency's duties. The bill requires TDI in consultation with HHSC to adopt rules as necessary to implement its duties (Secs. 65.052-65.054). H.B. 2406 authorizes HHSC to contract with a third party administrator to provide enrollment and related services that would otherwise be performed by DHS or TDH. The bill sets forth provisions for the procurement process associated with such contracts (Sec. 65.055). The bill authorizes HHSC to conduct a community outreach and education campaign to provide information relating to the availability of plan coverage and to contract with community-based organizations or coalitions of community-based organizations to implement the campaign. HHSC is authorized to direct TDH or DHS to perform all or part of the campaign (Sec. 65.056). The bill authorizes HHSC to develop and implement rules for the prevention and detection of fraud in the plan program (Secs. 65.058). The bill authorizes HHSC to appoint regional advisory committees to provide recommendations on the implementation and operation of the plan (Sec. 65.057). H.B. 2406 sets forth eligibility criteria for an individual's participation in the plan and requires HHSC or DHS at the direction of and in consultation with HHSC to adopt an application form and procedures for requesting coverage under the plan and to develop eligibility screening and enrollment procedures for the plan. The bill provides that determination on the eligibility of an applicant must be made and the information on the individual's available choice of health plan providers be provided no later than the 30th day after the individual submits an application. HHSC is authorized to establish enrollment periods for the plan program (Secs. 65.101-65.103). The bill requires HHSC in consultation with the commissioner of insurance (commissioner) to establish by rule benefits provided under the plan, which must include benefits equal to the lowest level of benefits available under a Medicare supplement policy, an annual physical, outpatient prescription drugs, and emergency care (Sec. 65.151). The bill requires the commissioner to establish a premium for plan coverage and provide coverage without charging a premium to an individual whose net family income is at or below 150 percent of the federal poverty level. The commissioner is required to provide coverage at reduced premium rates to certain individuals whose income is above 150 percent of the federal poverty level and provides that individuals with higher levels of income are required to pay progressively higher rates and specifies that under the reduced premium rates, an individual must pay at least 40 percent of the cost of the plan. The bill requires the commissioner to specify how the premium may be paid (Sec. 65.153). H.B. 2406 requires the commissioner to require an enrollee in the plan to pay a copayment or similar charge for benefits provided under the plan (Sec. 65.154). The plan may include a waiting period, a preexisting condition provision, and copayments and other provisions intended to discourage employers and other persons from discontinuing health benefit coverage for a person eligible for the plan and to discourage individuals with access to adequate health benefit plan coverage from discontinuing that coverage (Sec. 65.155). The bill requires HHSC or TDH at the direction of and in consultation with HHSC to select the health plan providers under the program through a competitive procurement process. The bill sets forth eligibility requirements for a health plan provider. The bill requires a managed care organization or other entity to seek to obtain the participation in its network of significant traditional providers as defined by HHSC rule. HHSC is required to provide for a choice of at least two health plan providers in each metropolitan area. The commissioner may authorize an exception to this provision if only one acceptable applicant applies to become a provider in the metropolitan area (Sec. 65.156). EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001.