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Medicaid expansion not happening in Tennessee

1:04 PM, Mar 27, 2013   |    comments
Tennessee Govenor Bill Haslam. (Photo by Michael Loccisano/Getty Images)
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Chas Sisk and Tom Wilemon, The Tennessean

NASHVILLE, Tenn. - Tennessee will not expand its Medicaid program under the Affordable Care Act but instead will pursue a state-based plan, the state's governor said Wednesday.

Gov. Bill Haslam said he wants to leverage federal dollars to purchase private health insurance for Tennesseans without coverage who can't afford it. But the federal Department of Health and Human Services has not signed off on his idea.

"Tennessee has shown the nation how to produce true reform in education based on students' results and educational outcome," Haslam said. "I believe Tennessee can also be a model for what true health care reform looks like, reform that will take significant steps to save the state and the nation from the unsustainable path we are on now."

Expanding TennCare, the state's Medicaid program, had been estimated to cover about 140,000 of Tennessee's nearly 1 million uninsured residents and bring in $1.4 billion in federal money in the first year alone. Under that expansion, the federal government would have paid the entire cost for the first three years and at least 90% thereafter.

The Republican governor told a joint session of state lawmakers that his plan would:

• Leverage available federal dollars to purchase private health insurance for Tennesseans who earn up to 138% of the federal poverty level and don't have access to health insurance. That would translate to 175,000 more insured Tennesseans.
• Require co-payments for residents who can afford to pay something.
• Include a definitive ending date that could be extended only with the General Assembly's approval.
• Revamp the payment structure for providers so they are compensated for health outcomes, not just based on services performed.

"Hospitals and medical providers have put a lot of sincere effort into working with us toward payment reform," Haslam said. "I cannot emphasize enough how much I've been impressed with our hospitals' willingness to work with us. To succeed, we also need cooperation from the Department of Health and Human Service, and we can't get the same assurances from them at this point."

The governor told the assembled lawmakers that he would not ask the General Assembly for approval to accept the Medicaid expansion federal money because he has not received approval for his plan. He appeared to catch lawmakers by surprise: The group dominated by usually vocal opponents of President Barack Obama and his signature health care law gave him only tepid applause.

The announcement came just hours before lawmakers were scheduled to take up a bill blocking the expansion of TennCare. One sponsor of that bill, state Sen. Brian Kelsey, a Republican from Germantown, Tenn., issued a statement praising the governor but leaving it unclear whether he intended to pursue the blocking measure.

"I applaud Governor Haslam's decision today to reject Medicaid expansion as envisioned by ObamaCare in this year's budget," Kelsey said. "I am happy to receive the governor's commitment not to expand Medicaid in future years without legislative approval."

Democrats and some health-care advocates slammed the governor for rejecting expansion.

"It will mean that many of our neighbors will live sicker and that some will die sooner," said a statement from the Tennessee Justice Center, an advocacy group for low-income residents. "The economic impact, especially on rural communities, will be devastating, and probably permanent. Six billion dollars in federal funds that Tennessee families and communities very much need will now go elsewhere."

Haslam was among the last of the Republican governors to declare a decision on expansion. Both the health care program and Obama are widely unpopular in this highly Republican state.

While Republican governors have been highly critical of the federal health care program, a number of them are re-evaluating their opposition to accepting federal dollars to expand health care coverage to the poor as they review the budget implications and face pressure from hospitals that treat the uninsured. Republicans also are proposing alternatives that would cover fewer people than Obama's plan, guarantee less financial help or rely more on private insurers.

The hospital industry has called expansion crucial to boosting jobs in that sector, and has warned that declining the money could cause some rural hospitals to go out of business.

Committees in Florida's Republican-led Legislature have rejected a Medicaid expansion for roughly 1 million of the state's poorest residents, even though it is backed by GOP Gov. Rick Scott. Now a Republican state senator is pursuing an alternative that is much like what Haslam said he wanted - using federal money to provide vouchers for low-income residents to buy private policies.

Ohio Gov. John Kasich, also a Republican, has been in discussions with the Obama administration about providing subsidized insurance instead of full Medicaid coverage for more adults. Republican governors in Texas, Nebraska and Indiana want the federal government to award Medicaid money as block grants to states.

Haslam vowed not to be swayed by political considerations though his previous decisions not to pursue either a state-run health insurance exchange or a joint one with the federal government hewed closely to the ideological preferences of Republicans in the Legislature.

"You're elected to try to make the hard decisions on the big issues," Haslam said earlier this week. "And there's no question that health care is as big an issue facing Tennessee and the country as there is."

Contributing: The Associated Press

The Tennessean

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