Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 larry.campbell@ks.gov
Topeka, KS 66612 Division of the Budget http://budget.kansas.gov
Larry L. Campbell, Director Laura Kelly, Governor


February 18, 2019


The Honorable Brenda Landwehr, Chairperson
House Committee on Health and Human Services
Statehouse, Room 352-S
Topeka, Kansas 66612
Dear Representative Landwehr:
SUBJECT: Fiscal Note for HB 2030 by Representative Ward
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2030 is
respectfully submitted to your committee.
HB 2030 would expand Medicaid coverage to Kansas adults under 65 years of age, who
are not pregnant and whose income does not exceed 138.0 percent of the federal poverty level, to
the extent permitted under the provisions of the Patient Protection and Affordable Care Act. Under
the bill no requirements that exceed or differ from requirements imposed by federal statute or
regulation could be imposed on newly eligible medical assistance recipients.

Estimated State Fiscal Effect
FY 2019 FY 2019 FY 2020 FY 2020
SGF All Funds SGF All Funds
Revenue -- -- -- $503,177,300
Expenditure -- -- $12,267,855 $515,445,155
FTE Pos. -- -- -- 129.00
The Kansas Department of Health and Environment (KDHE) states that because of the
system changes required to implement Medicaid expansion the earliest date to begin enrolling the
newly eligible would be January 1, 2020. As a result, the fiscal effect estimates in this note are for
one half of FY 2020. KDHE indicates that passage of the bill would assume costs and offsets
associated with an additional 150,000 individuals becoming eligible for Medicaid coverage.
KDHE estimates that the cost of care for the newly eligible beneficiaries would be $501.8 million
for half of FY 2020. The state share at 10.0 percent would be $50.2 million. The cost of care for
The Honorable Brenda Landwehr, Chairperson
Page 2—HB 2030

the newly eligible beneficiaries for the full year in FY 2021 is estimated to be in a range from
$1,083.7 million to $1,170.0 million. The estimated state share for FY 2021 at 10.0 percent would
be in a range from $108.4 million to $117.0 million.
KDHE estimates additional revenue of $2.1 million in FY 2020 and between $4.3 and $4.4
million in FY 2021 from increased drug rebates. This additional revenue would be used to meet
state share requirements. KDHE estimates additional revenue of $29.0 million in FY 2020 and
between $62.5 and $67.5 million in FY 2021 from the 5.77 percent Privilege Fee. This additional
revenue would also be used to meet state share requirements. Healthcare cost savings that would
be realized for certain populations are also included in the estimate. These savings total $11.1
million in FY 2020 and between $22.2 million and $23.1 million in FY 2021.
The state would also incur incremental administrative costs associated with expanding the
program. KDHE would require the addition of 120.00 FTE positions, the majority of which would
be eligibility staff and support staff. The cost of the current Medicaid support contracts would also
increase as a result of system changes that would be implemented to account for the new rules, as
well as handling the increased volume of encounter submissions. Total additional administrative
costs are estimated at $13.0 million in FY 2020 and $25.6 million in FY 2021. The state share of
those administration expenditures is approximately $6.5 million for FY 2020 and $12.8 million
for FY 2021.
The Department of Corrections (DOC) states that when an inmate is hospitalized for longer
than 24 hours the Medicaid inmate exclusion rule does not apply. Therefore, some of these inmates
could be Medicaid eligible on a fee-for-service basis. DOC currently estimates approximately
$3.0 million in State General Fund expenditures for these hospitalizations in FY 2020. If most of
those inmates were Medicaid eligible under the provisions of HB 2030, DOC would realize savings
of approximately $2.8 million from the State General Fund in FY 2020. This estimate equates to
$1.0 million in savings resulting from lower Medicaid fee rates plus $1.8 million from the federal
match that could be drawn down. DOC would, however, have increased administrative costs that
would reduce the savings. DOC would need an additional 1.00 FTE position to determine
eligibility and process claims, 4.00 FTE discharge planner positions to assist inmates in applying
for Medicaid benefits prior to release, and 4.00 FTE substance abuse care coordinator positions to
assist offenders with getting into a community-based substance abuse program. The current
estimate for increased administration is $610,000 from the State General Fund and 9.00 additional
FTE positions.
The Department for Children and Families (DCF) states that HB 2030 would not result in
additional expenditures by the agency. However, the Secretary of DCF states that expanding
Medicaid could reduce the agency’s future foster care expenditures if parents and children can
access additional mental health services and other community-based health services that may allow
children to avoid out-of-home placement. It is not possible to estimate the amount by which
expenditures could be reduced.
The total estimated State General Fund fiscal effect for KDHE and DOC resulting from
enactment of HB 2030 would be increased expenditures of $512.6 million, including $12.3 million
The Honorable Brenda Landwehr, Chairperson
Page 3—HB 2030

from the State General Fund in FY 2020. For FY 2021, total expenditures would be increased by
$1.1 billion, including $28.9 million from the State General Fund. The FY 2020 Governor’s
Budget Report reflects additional expenditures of $509.2 million, including $14.2 million from the
State General Fund, for KDHE for Medicaid expansion. The FY 2020 Governor’s Budget Report
does not reflect DOC’s estimated savings from Medicaid expansion.


Sincerely,

Larry L. Campbell
Director of the Budget


cc: Dan Thimmesch, Health & Environment
Cody Gwaltney, Aging & Disability Services
Jackie Aubert, Children & Families
Linda Kelly, Corrections


Statutes affected:
As introduced: 39-709, 21-5701