(a) A hospital district created under Article IX of the Texas Constitution or a county may purchase and pay the premiums for a conversion policy or other health insurance coverage for a person who is diagnosed as having HIV or AIDS, or defined by Section 81.101, Health and Safety Code, or other terminal or chronic illness, who is unemployed, and whose income level is less than 200 percent of the federal poverty level, based on the federal Office of Management and Budget poverty index in effect at the time coverage is provided, even though that person may be eligible for benefits under Chapter 32, Human Resources Code, or a medical assistance program of the county or hospital district.
(b) Health insurance coverage for which premiums may be paid under this section includes coverage purchased from an insurance company authorized to do business in this state, a group hospital services corporation operating under Chapter 842, Insurance Code, a health maintenance organization operating under Chapter 843, Insurance Code, or an insurance pool created by the federal or state government or a political subdivision of the state.

(c) The county or hospital district may provide for payment of premiums from unencumbered money available to it for that purpose.
(d) A county or hospital by order may adopt necessary rules, criteria, and plans and may enter into necessary contracts to carry out this section.