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VOL. 37 | NO. 12 | Friday, March 22, 2013




Echoes of TennCare feed state Medicaid misgivings

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NASHVILLE (AP) — Proponents of expanding Medicaid in Tennessee say the financial support from Washington is a deal too good to pass up — federal funding for 100 percent of the expansion costs for three years and at least a 90 percent match after that.

But Tennessee is approaching the carrot warily partly because of its experience as a pioneer in expanding Medicaid to cover the uninsured back in the 1990s. Federal funding for that expansion was cut after the White House and governorship changed hands.

The ballooning expenses for TennCare, Tennessee's expanded Medicaid program, strained state finances and set off incendiary fights over taxes that reshaped the state's political landscape.

That history is one reason Gov. Bill Haslam is among the last Republican governors to decide whether to expand Medicaid. He has said he will make his recommendation by the end of the month — though he acknowledges that it's far from certain that lawmakers will approve his choice.

"A lot of people say the governor should never propose something that he or she can't pass, but I haven't thought of that," Haslam told reporters at his most recent public appearance last week. "We haven't made the call, but if we decide to do it, obviously there's a lot of selling to do."

TennCare was authorized in 1994 by the Clinton administration after its national health care reform proposal died in Congress. The Tennessee plan was meant to be a new model for expanded Medicaid programs, where it was up to doctors to determine what care was necessary. The hope was that treating problems earlier would improve overall health and prevent costly trips to the emergency room.

But in practice, few limits on prescription drugs, duration of hospital days, or office and home visits quickly led to escalating costs. And federal guidelines on eligibility created a situation where insurers were able to easily pass off people with chronic health problems to the state-run program.

TennCare soon ran into cost overruns and management turmoil, with 10 directors running the program in its first 10 years of existence. The budget-busting nature of the program was cited by supporters of a failed effort to implement a state income tax in Tennessee, which helped accelerate Democratic losses in Legislature that have left the party with little voice in state government.

An outside study in 2003 found that 15 percent of TennCare enrollees represented 75 percent of the costs.

The first term of then-Gov. Phil Bredesen, a Democrat, was marked by his 2005 decision to cut 170,000 adults from the TennCare rolls and reduce benefits to thousands more. It was an acknowledgment that the state had given up on expanding Medicaid and would revert toward the traditional approach of covering only poor women and children.

It's not lost on political observers that Bredesen's Republican successor could end up adding back an estimated 140,000 uninsured Tennesseans. It would be a counterintuitive turn of events given each party's traditional stances toward Medicaid.

Some TennCare advocates' argue the state could add the uninsured for the duration of the 100 percent coverage and remove them from the rolls later if the price tag is deemed too high. Haslam is dismissive of that notion.

"I'm not sure those folks appreciated the difficulty of cutting back the rolls last time," Haslam said. "I don't think you can just easily walk away at that point."

State Rep. Craig Fitzhugh, D-Ripley and a former longtime chairman of the House Finance Committee, said the state's experience with TennCare should encourage officials to embrace Medicaid expansion instead of scaring them away.

"Remember when you got turned down by an insurance company, you just had to present a letter and you got full Cadillac coverage," he said. "And that's a thing of the past."

"If, as some fear, the federal government pulls the plug and we have to shrink it back down, we've got experience with that," he said.

The most persuasive argument made to the Republican supermajorities in the state Legislature has been that rejecting the Medicaid expansion would hurt hospitals — especially those in rural areas — and likely cause some of them to close.

But Senate Speaker Ron Ramsey, R-Blountville, said he doesn't trust the federal government to keep up its end of the bargain.

"I would almost lay odds that they will not keep their promise of funding," he said. "And what are our options then? Either to raise taxes on the people of state of the Tennessee, or remove people from the rolls.

"I've been through that once, and that's not fun," he said.

Gordon Bonnyman, executive director of the Tennessee Justice Center, a group that supports greater access to Medicaid, said the state's experience under the new federal health care law would be different than it was when it was seeking waivers for the TennCare program.

"A state in a waiver context basically goes to the feds and says, 'Mother, may I?'" Bonnyman said. "Which is very different from the statutory guarantees under the Affordable Care Act."

For Joyce Cotter of Nashville, Medicaid expansion could allow her to attend to several medical conditions that have gone untreated since she was cut form TennCare for a second time in 2010.

"If they would expand it even for the three years, that would give me a chance to have myself check for my heart, my (lung) and my leg problems that I've got," she said. "I have a lot of health issues, and they're not being taken care of."

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