According to the Legislative Budget Board (LBB), the fiscal implications of HB 138 are designed to be revenue-neutral to the state over the five-year forecast period. The bill authorizes the creation of the Health Impact, Cost, and Coverage Analysis Program at the Center for Health Care Data at The University of Texas Health Science Center at Houston. While the program is expected to cost approximately $2 million per year, the bill directs the Comptroller to assess annual fees on health benefit plan issuers to fully fund these expenses. Therefore, the program’s operating costs would be offset by corresponding revenue collections from private sector fees, resulting in a net zero impact to the General Revenue Fund.

In fiscal year 2026 and subsequent years, the expected program expenses include hiring 6.0 full-time employees at the Center, along with associated costs for external professional services and data analysis. Administrative support for assessing and collecting the new fees will be handled by the Comptroller's Office, which anticipates being able to absorb these tasks within existing resources. Importantly, the legislation creates a dedicated revenue stream in the General Revenue Fund, which will be subject to legislative review under Texas's funds consolidation processes.

While no major fiscal impact to local governments is expected, the Health and Human Services Commission (HHSC) noted a potential but indeterminate cost to their agency because the amount of the fee that might be assessed on plans that interact with HHSC programs is currently unknown​. Overall, the bill ensures that the financial burden of the program rests on regulated private health insurers rather than taxpayers at large.

HB 138 seeks to establish the Health Impact, Cost, and Coverage Analysis Program at The University of Texas Health Science Center at Houston. This program would be responsible for producing formal analyses of proposed health insurance mandates, assessing their potential effects on public health, insurance premiums, administrative costs, and health care utilization. While the intention—to provide lawmakers with data-driven insights before imposing new mandates—is reasonable and ostensibly supports transparency and informed policymaking, the bill’s underlying structure presents substantial concerns across multiple liberty principles. Without significant amendments, the legislation risks undermining free enterprise, increasing regulatory burdens, and expanding the role of government in ways incompatible with limited government principles. 

The most foundational concern is the expansion of government scope and function. HB 138 establishes a new permanent state-run program with a dedicated bureaucracy embedded within a public university. It authorizes the hiring of multiple full-time staff and empowers the program to conduct analyses year-round on any qualifying legislative proposal. This structure is a clear increase in the size and footprint of government, not just in personnel but in institutional influence. Rather than supporting a temporary or advisory panel, this bill builds a new standing entity that could serve as a springboard for further public-sector encroachment into private health insurance markets. Such expansion contradicts the principle of Limited Government, especially in the absence of a sunset review provision or periodic reevaluation by the legislature.

Second, the bill imposes a new financial burden on private businesses—specifically, health benefit plan issuers—through an annual fee designed to fund the program’s operations. While this structure allows the program to be revenue-neutral to the state, it constitutes a new, state-mandated cost on private actors, imposed without an opt-in mechanism or competitive marketplace alternative. These fees are not minor; the fiscal note estimates nearly $2 million annually in collections, and the program includes provisions for increasing the fees if the program’s costs rise or if prior-year deficits occur. This offloads the cost of a state initiative onto the private sector, which is inconsistent with the principle of Free Enterprise, and sets a precedent for fee-funded regulatory expansion outside the normal appropriations process.

Beyond the fiscal impact, the bill creates a significant new regulatory burden on health benefit plan issuers. Insurers would be required to respond to “special data calls” from the Department of Insurance, disclosing detailed administrative cost estimates for proposed mandates. These reports must follow standardized formats, include calculation methodologies, and be submitted on tight legislative timelines. While confidentiality protections are in place, the compliance burden is real—especially for smaller insurers who may lack dedicated regulatory response infrastructure. The requirement that insurers respond to government information requests, fund the operation through fees, and indirectly support legislative processes that may run counter to their interests raises serious concerns about compelled participation in regulatory processes without proportional representation or recourse.

Moreover, although the program is framed as analytical and neutral, there is a serious risk of policy weaponization. Once established, the program’s findings could be used to justify new coverage mandates or regulatory expansions. This risk is compounded by the bill’s use of scientific and academic literature to frame conclusions about public health “benefits of prevention,” reductions in premature death, and other subjective or value-laden outcomes. While such metrics are not inherently problematic, when used by a government-funded entity, they can form the evidentiary backbone for expansive new mandates—particularly when such evidence is framed as “scientifically necessary” or “cost-saving,” even in the absence of market demand. Without statutory guardrails that clearly limit the use of the program’s findings to informational purposes only, there is a high potential for this program to serve as a springboard for further regulation.

Additionally, the bill does not include a sunset clause, budgetary cap, or formal mechanism for legislative reevaluation of the program’s performance. It effectively creates a new, ongoing function of government with funding tied to a non-appropriated fee structure. This limits legislative accountability and shields the program from regular oversight, further violating the principles of fiscal transparency and responsible governance. If the program grows in size, complexity, or scope—as government programs often do—there will be few procedural tools available to rein it in short of repeal.

Finally, while the bill does not directly tax or regulate individuals, the cost burden is likely to be passed on to consumers in the form of higher insurance premiums. Businesses do not absorb regulatory costs; they adjust for them. Over time, the fee assessments, data compliance obligations, and the policy risks of additional mandated benefits are likely to erode the affordability and flexibility of private insurance products. This indirectly diminishes Personal Responsibility, by reducing the ability of individuals to shop for coverage that best fits their personal needs and budgets, and encouraging a one-size-fits-all model determined by legislative and bureaucratic analysis.

The bill could become compatible with liberty principles if amended to: Add a sunset clause with a required legislative review; Impose strict statutory limits on the program’s authority and scope of analysis; Cap or clearly define the fee schedule; Prohibit the use of analyses to advocate for or justify new mandates; Narrow the data submission requirements placed on private insurers.

With such amendments, the program might serve a constructive, limited purpose. But in its current form, the legislation substantially violates key liberty principles and must be opposed. Texas Policy Research recommends that lawmakers vote NO; Amend on HB 138.

• HB 138 indirectly infringes on individual liberty by making healthcare more expensive and less customizable. Although it does not regulate individuals directly, higher compliance costs on insurers are likely to be passed on to consumers through increased premiums. Over time, this could reduce the range of affordable health insurance options available to individuals, limiting their ability to choose coverage that best fits their personal needs and preferences.
• The bill undermines personal responsibility by promoting a government-driven evaluation system that encourages broader, standardized health coverage mandates. Rather than allowing individuals and employers to make independent decisions about the health benefits they want or are willing to pay for, the bill supports an environment where insurance offerings may increasingly reflect government-endorsed “essential benefits,” reducing the individual's role in making risk-based and cost-conscious choices.
• HB 138 clearly harms free enterprise by imposing a new financial burden on private health insurers through annual fees and mandatory compliance with detailed data requests. This government-mandated cost and regulatory obligation interfere with the freedom of businesses to operate, price, and innovate within the health insurance marketplace. Over time, it could stifle competition by disadvantaging smaller or newer insurers less equipped to absorb these regulatory costs.
• Although it does not involve direct seizure of property, the bill infringes on private property rights by requiring insurers to spend their own funds to support a government-mandated program and to share internal cost data upon request. The obligation to hand over sensitive business information—even with confidentiality protections—represents a material intrusion on companies' control over their financial and operational resources.
• The bill substantially violates the principle of limited government by creating a new, ongoing state program without a sunset provision or regular legislative reevaluation. It expands state functions into a new quasi-regulatory role, leveraging private sector resources to fund and support the program. Over time, this new bureaucracy could evolve into a powerful influence on healthcare policy and insurance market regulation, far beyond its initial scope.

• HB 1906 (Same As)
• SB 818 (Same As)