Bill Summary – FastDemocracy

Division of the Budget
Landon State Office Building                                                                        Phone: (785) 296-2436
900 SW Jackson Street, Room 504                                                                    adam.c.proffitt@ks.gov
Topeka, KS 66612                               Division of the Budget                             http://budget.kansas.gov
Adam Proffitt, Director                                                                          Laura Kelly, Governor


                                                   May 22, 2023


          The Honorable Troy Waymaster, Chairperson
          House Committee on Appropriations
          300 SW 10th Avenue, Room 112-N
          Topeka, Kansas 66612
          Dear Representative Waymaster:
                    SUBJECT:      Fiscal Note for HB 2415 by House Committee on Appropriations
                  In accordance with KSA 75-3715a, the following fiscal note concerning HB 2415 is
          respectfully submitted to your committee.
                  HB 2415 would establish the KanCare Bridge to a Healthy Kansas Program. The Kansas
          Department of Health and Environment (KDHE) would be required to administer and promote the
          program and provide information to potential eligible individuals residing in medically
          underserved areas of Kansas. On and after January 1, 2024, eligibility determinations under the
          Kansas Program of Medical Assistance would be granted to any adult under 65 years of age who
          is not pregnant and whose modified adjusted gross income does not exceed 138.0 percent of the
          federal poverty limit, to the extent permitted under the provisions of 42 USC § 139a, as in effect
          on July 1, 2023. The bill would specify that the Legislature expressly consents this expansion of
          benefits as required by KSA 39-709(e)(2) by passage of the bill.
                  According to KDHE, enactment of HB 2415 would increase administrative expenditures
          necessary to prepare for implementation of the bill in FY 2023 by $400,000, including $200,000
          from the State General Fund. For FY 2024, the bill would generate State General Fund savings
          totaling $71.5 million after all additional expenditures were accounted for. Expenditures for FY
          2024 would total $671.4 million, with approximately $642.5 million for direct assistance and $28.9
          million for administrative costs, which would include 125.00 new FTE positions. Total
          expenditures include reductions to account for estimated savings for some current Medicaid
          populations that could be included in the new population, such as those enrolled in MediKan and
          certain correctional facility inmates. Estimated revenue related to the new population would total
          approximately $721.8 million, including $682.4 million in federal matching funds, $37.2 million
          in additional Privilege Fee revenue, and $2.2 million in additional drug rebate revenue. This
          includes the Division of the Budget estimate of $370.0 million over eight quarters for the federal
The Honorable Troy Waymaster, Chairperson
Page 2—HB 2415

incentive of an additional 5.0 percent in the federal medical assistance percentage for the new
population. This equates to $92.5 million in State General Fund savings in FY 2024. The overall
fiscal effect is estimated to total State General Fund savings of $71.5 million in FY 2024.
        KDHE reports their analysis is calculated assuming an effective date of January 1, 2024,
but notes the agency would require at least nine months after the bill passes to have time to
implement the new program. The estimate uses the assumption of 150,000 new individuals
eligible for Medicaid coverage in FY 2024 under provisions of the bill.
        The Kansas Department of Corrections (KDOC) estimates that approximately 80.0 to 90.0
percent of the resident population would be eligible for Medicaid under HB 2415. Services for
eligible residents could only be covered by Medicaid for inpatient hospitalization services when
the stay was longer than 24 hours. For newly eligible residents, it is estimated that the savings
generated by the bill for inpatient hospitalizations would be $1.3 million annually. Additionally,
the 90.0 percent federal cost share would generate annual State General Fund savings of $2.2
million, for an overall State General Fund savings of $3.5 million annually. Because the bill would
take effect on January 1, 2024, the State General Fund savings in FY 2024 would be approximately
$1.8 million. KDOC would have increased administrative costs that would reduce the net State
General Fund savings. The agency currently has 1.00 Coordinator FTE position which works with
KDHE to enroll hospitalized residents in Medicaid and process Medicaid payments. Increasing
the number of eligible residents would require an additional 1.00 Coordinator FTE position at a
cost of $39,600 in FY 2024 and $79,200 annually in FY 2025 and beyond. KDHE did take into
account savings from the eligible inmate population totaling $1.4 million in FY 2024 in their
estimates described above. The expansion of Medicaid is reflected within the FY 2024 KDHE
budget in The FY 2024 Governor’s Budget Report.


                                                     Sincerely,

                                                     Adam Proffitt
                                                     Director of the Budget


cc: Amy Penrod, Department of Health & Environment
    Randy Bowman, Department of Corrections