HBA-MPM H.B. 3038 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3038 By: Isett Public Health 8/28/2001 Enrolled BACKGROUND AND PURPOSE The Texas Medicaid Health Insurance Premium Payment Reimbursement Program (HIPP) is a Medicaid program that pays the medical insurance premium, co-payments, and deductibles for Medicaid eligible employees who work for companies that offer private health insurance and meet HIPP requirements. Under this program, employers also pay a share of the employees' coverage. If it is cost effective, HIPP will pay the premium for an entire family even if only one child in the family is Medicaid eligible. Because of the emphasis on cost-effectiveness, expanding HIPP to cover CHIP recipients and more Medicaid recipients could save the state money while increasing the number of residents with health insurance coverage. However, many families are approved for HIPP outside of their employer's open enrollment periods because the eligibility process can be time consuming. House Bill 3038 permits enrollment in HIPP regardless of period restrictions and directs CHIP eligible children and individuals eligible for Medicaid into the HIPP program if it is cost effective. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Department of Health in SECTION 2 (Section 32.0422, Human Resources Code) of this bill. ANALYSIS House Bill 3038 amends the Health and Safety and Human Resources codes to require the Texas Department of Health (TDH) to identify children who are otherwise eligible for CHIP and individuals who are otherwise entitled to Medicaid for potential enrollment in a group health benefit plan (group plan). The bill requires TDH to determine whether it is cost-effective to enroll a particular individual in that group plan through a health insurance premium payment reimbursement program. If TDH determines that it is costeffective, TDH is required to provide written notice to the issuer of the group plan and shall require the individual to apply to enroll in the group plan as a condition for eligibility for CHIP or Medicaid, as applicable. The bill provides for payment of premiums for family members who are not eligible for CHIP or Medicaid if enrollment for the eligible individual is not possible without enrolling ineligible individuals and TDH determines it to be cost effective. The bill sets forth provisions for determining who is eligible for a group plan and for the payment of the premiums (Sec. 62.059, Health and Safety Code and Sec. 32.042, Human Resources Code). The bill provides that enrollment in a group plan does not affect a child's eligibility for CHIP, except that the program is the payor of last resort for those benefits (Sec. 62.059, Health and Safety Code). The bill requires TDH to treat coverage under a group plan for a Medicaid recipient as a third party liability to the plan. Enrollment of an individual in a group plan does not affect the individual's eligibility for Medicaid, except that the state is entitled to payment under certain conditions. The bill prohibits TDH from requiring or permitting an individual who is enrolled in a group plan to participate in the Medicaid managed care program or another Medicaid managed care demonstration project. The bill requires TDH to adopt rules necessary to implement provisions for enrolling Medicaid recipients in a group plan (Sec. 32.0422, Human Resources Code). H.B. 3038 amends the Insurance Code to require that, on receipt of written notice from TDH that states an individual who is eligible for the group plan is a participant in the health insurance premium payment reimbursement program through CHIP or Medicaid, the issuer of the group plan is required to permit the individuals to enroll in the plan without regard to any enrollment period restriction. If the CHIP or Medicaid recipient is not eligible to enroll unless a family member of the individual is also enrolled in the group plan, the issuer, on receipt of written notice, is required to enroll both the individual and the family member in the group plan. The bill sets forth provisions for when enrollment takes effect and for the termination of enrollment (Article 21.52K). The bill requires the Texas Department of Human Services to provide information and otherwise cooperate with TDH as necessary to ensure the enrollment of Medicaid eligible individuals in a group plan. The bill authorizes TDH to consolidate or coordinate the administration of the two health insurance premium payment reimbursement programs for Medicaid and CHIP (Sec. 62.059, Health and Safety Code and Sec. 32.0422, Human Resources Code). The bill amends the Labor Code to include employers of a Medicaid recipient among those eligible for a tax refund voucher under certain conditions. The bill also includes payment into a medical savings account among the payment for health coverage for financial assistance recipients that qualifies an employer for a tax refund voucher (Sec. 301.104). The bill requires TDH to study various options for increasing the enrollment of Medicaid recipients in a group plan and the feasibility of implementing an income-based sliding scale for the payment of premiums for certain participants in the plan. TDH is required to report its conclusions and recommendations to the governor, lieutenant governor, the speaker of the house of representatives, and the presiding officer of each standing committee of the senate and house of representatives having jurisdiction over health and human services issues no later than December 1, 2002 (SECTION 5). The bill requires HHSC to submit for approval a plan amendment relating to CHIP as necessary to comply with the bill no later than September 15, 2001. The bill authorizes HHSC to delay the implementation of the health insurance premium payment reimbursement program until approval of the amended CHIP plan (SECTION 8). EFFECTIVE DATE September 1, 2001. SECTIONS 1, 2, and 3 take effect August 31, 2001.