Governor Bill Haslam
Vowing to call a special session in January to deal with the state’s long-lingering Medicaid-expansion issue, Governor Bill Haslam announced at a Nashville press conference on Monday that he has reached agreement with the federal government on an alternative Tennessee plan to allow Medicaid expansion in Tennessee.
The plan, which Haslam called “Insure Tennessee,” would, he said, “leverage” Medicaid-expansion money under the Affordable Care Act in a two-year “pilot program” that would provide coverage for the currently uninsured and prepare them for eventual “transition to commercial health coverage.”
Haslam said the agreement with the federal government was “verbal” at this point, but that a formal request for waiver from standard ACA requirements would follow, with expectations of approval.
Under the terms of legislation passed in the last session of the Tennessee General Assembly, any agreement reached between the Governor and the federal government on Medicaid expansion must be approved by both houses of the legislature. Haslam said he would work diligently to achieve that approval in the forthcoming special session.
If approved, the plan apparently would, like standard Medicaid expansion, make the state eligible for billions in new funding under ACA, a result that the state’s hospital executives, many of them facing critical shortages, have been aggressively lobbying for.
One hopeful sign, for those who have sought state involvement with Medicaid expansion for the last two years, was what seemed an open-minded response to the Governor’s plan from Lt. Governor/State Senate Speaker Ron Ramsey:
“When a state has an opportunity to take power away from the federal government and institute real conservative reform, that is an opportunity that must be taken seriously. Governor Haslam has negotiated a deal which returns tax dollars back to Tennessee while using conservative principles to bring health insurance to more Tennesseans. I look forward to sitting down with my fellow legislators to take a hard look at what has been negotiated to make sure that the final deal, which must be approved by the legislature, is in the long-term financial interest of Tennessee.”
Senator Lamar Alexander’s response: “Governor Haslam deserves credit for insisting upon a Tennessee plan that the state can afford, and (U.S. Health and Human Services Secretary Sylvia Mathews Burwell) deserves credit for being flexible enough to allow the governor to achieve that.”
Senator Bob Corker’s response: “I have had several conversations with Governor Haslam and appreciate the work he and his team have done to study this issue closely and negotiate a tailored solution that works for Tennessee. I’m glad the administration has finally allowed appropriate flexibility, and I’m pleased our state was able to adopt a solution that will build off of the innovative ways we deliver quality health care.”
Response from state Democratic chairman Roy Herron was grudgingly approving: “”The governor’s plan is too little, too late. Years of Republican delay have cost Tennesseans at least $870 million, thousands of jobs, and has even cost thousands of Tennesseans their very lives.
“But now that the governor has received major concessions, legislators should end the stalling and suffering, delay and death.”
9th District congressman Steve Cohen (D-Memphis) was also ambivalent in his reaction, if guardedly optimistic:
“While I regret the amount of time that it took Governor Haslam to reach this agreement, I am relieved that he has completed his negotiations with the Obama Administration to begin expanding health coverage to more Tennesseans. I am glad the governor is following Arkansas’ lead and expanding coverage as our neighbor did 2 years ago.
“I remain cautiously optimistic that the General Assembly will pass and implement the governor’s plan. As a founding member of the Congressional State Medicaid Expansion Caucus, I remain committed to ensuring that all Tennesseans are able to take advantage of the benefits and protections made available through the President’s landmark Affordable Care Act.
“I believe that a full expansion of TennCare as originally prescribed by the law is the best way to cover Tennesseans, I am hopeful that implementation of the Governor’s plan can put Tennessee on the road to achieving universal health coverage in the future.”
The state’s other Democratic congressman, Jim Cooper of Nashville, sounded a brief but satisfied note:
“Gov. Haslam’s announcement is a step in the right direction/ Expanding health insurance to more Tennesseans is the right thing to do for patients, hospitals and businesses.”
Another key Democrat, state Rep. Craig Fitzhugh (D-Ripley), the Democratic leader in the state House, was pointedly upbeat:
“Today has been a long time coming. While it does not represent a full expansion of Medicaid, I am optimistic that this compromise plan will be something the entire General Assembly can support.
“I want to extend my personal thanks to Governor Bill Haslam and the Obama administration for working together on this plan. The Governor and I have often disagreed on how best to approach this issue, but today I’m happy to stand with him working to get this passed. The road will no doubt be bumpy and there will be disagreements along the way, but our caucus will do all we can to assure more affordable, better quality health care for all Tennesseans.”
Two other Democrats, both state Senators-elect, were also sanguine.
Said Sara Kyle (D-Memphis): “Democrats have long sought a solution to expand Medicaid for working people who can’t otherwise afford health insurance.
“In Shelby County alone, one in five can’t get covered. I want to thank Gov. Haslam for taking up this issue and presenting his Insure Tennessee proposal today. I look forward to hearing more about it in the weeks ahead.”
Jeff Yarbro (D-Nashville) said: “Any proposal that makes health insurance more affordable for more Tennesseans is a step in the right direction.Getting this program right is a win-win for working Tennesseans, for our hospitals and for our economy.
“Now, I look forward to hearing more about the Insure Tennessee plan and working with legislators in both parties to do what’s best for our state.”
Other responses will be included here as received.
Here is the text of a press release issued simultaneously with the Governor’s press conference:
FOR IMMEDIATE RELEASE:
Monday, December 15, 2014…
HASLAM ANNOUNCES INSURE TENNESSEE PLAN
Provides health care coverage to more Tennesseans while addressing health outcomes and cost
NASHVILLE – Tennessee Gov. Bill Haslam today unveiled his Insure Tennessee plan, a two year pilot program to provide health care coverage to Tennesseans who currently don’t have access to health insurance or have limited options. The program rewards healthy behaviors, prepares members to transition to private coverage, promotes personal responsibility and incentivizes choosing preventative and routine care instead of unnecessary use of emergency rooms.
The governor announced that he plans to call a special session to focus on the proposal after the 109th General Assembly convenes in January.
“We made the decision in Tennessee nearly two years ago not to expand traditional Medicaid,” Haslam said. “This is an alternative approach that forges a different path and is a unique Tennessee solution. This plan leverages federal dollars to provide health care coverage to more Tennesseans, to give people a choice in their coverage, and to address the cost of health care, better health outcomes and personal responsibility.
“Our approach is responsible and reasonable, and I truly believe that it can be a catalyst to fundamentally changing health care in Tennessee. It is our hope that this plan opens the door in the future for innovation within our existing Medicaid program. I look forward to working with providers across the state to advance payment reform and with members of the General Assembly to make this plan a reality.”
Five key areas of the governor’s plan include:
A fiscally sound and sustainable program;
Providing two new private market choices for Tennesseans;
Shifting the delivery model and payment of health care in Tennessee from fee-for-service to outcomes based;
Incentivizing Tennesseans to be more engaged and to take more personal responsibility in their health;
And preparing participants for eventual transition to commercial health coverage.Fiscally Sound and Sustainable Program
The program will not create any new taxes for Tennesseans and will not add any state cost to the budget. The Tennessee Hospital Association has committed that the industry will cover any additional cost to the state. The program will automatically terminate in the event that either federal funding or support from the hospitals is modified in any way.New Private Market Choices for Tennesseans
Insure Tennessee offers several options of coverage for individuals below 138 percent of poverty ($16,100 for an individual and $27,300 for a family of three). Tennesseans 21 to 64 years old will be offered a choice of the Healthy Incentives Plan or the Volunteer Plan.
The Volunteer Plan would provide a health insurance voucher to participants that would be used to participate in their employer’s health insurance plan. The voucher, valued at slightly less than the average TennCare per-enrollee cost, can be used to pay for premiums and other out-of-pocket expenses associated with participation in an individual’s employer sponsored private market plan.
Participants in the Healthy Incentives Plan may choose to receive coverage through a redesigned component of the TennCare program, which would introduce Healthy Incentives for Tennesseans (HIT) accounts, modeled after Health Reimbursement Accounts (HRAs), which can be used to pay for a portion of required member cost-sharing.
Payment Reform Efforts
The governor’s Delivery System Reform Initiative lays the foundation for reform by addressing the underlying quality and outcome deficiencies that contribute to growing health care costs and unaffordable insurance coverage. This initiative creates financial incentives for providers to provide high quality care in an efficient and appropriate manner so as to reduce costs and improve health outcomes. Insure Tennessee builds on this reform initiative by creating new participant incentives that align with the existing provider incentives. Ultimately, bringing the health care consumer into the equation is critical to successfully controlling cost growth.Personal Responsibility and Patient Engagement
The voucher program provides a fixed contribution that can be applied to the costs of a person’s private market plan. All costs incurred in excess of the amount of the voucher are the responsibility of the participant. This structure empowers individuals to make a choice about which plan is better for their needs and to manage their health care expenses to avoid additional costs.
Newly eligible individuals who choose to participate in the TennCare program and whose incomes are above 100 percent of poverty will be required to pay premiums and copays for services. All enrollees, including those with incomes below poverty, will have modest pharmacy copays. TennCare members “earn” contributions into their HIT accounts by performing healthy behaviors. The account then can be used to cover copayment expenses.
Prepares Participants for Commercial Health Coverage
The design of Insure Tennessee is based on private market principles that provide incentives to participants to engage in their health care by actively managing their health care costs. Through both programs, Insure Tennessee introduces a commercial health insurance experience which can help Tennesseans prepare for independence from public assistance.
* * *
In June 2012, the Supreme Court ruled that the federal government could not mandate that states expand their Medicaid programs under the Affordable Care Act. In March 2013, Haslam announced that Tennessee would not expand the traditional Medicaid program but that he would work with the federal government on a plan for Tennessee that would take into consideration program cost, patient engagement, payment reform and health outcomes. Since that time, he has kept those principles as priorities in working toward the Insure Tennessee plan. Haslam has received verbal approval from the U.S. Department of Health and Human Services (HHS) on the plan. The next steps are for the state to submit a waiver to HHS and for the governor to take the proposal to the legislature for consideration.Haslam was joined for the announcement in the Old Supreme Court Chamber of the State Capitol by representatives from a coalition of business, health care and civic organizations who applauded the plan and its impact on Tennessee.
—Additional reporting by Toby Sells.
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(Graphs courtesy of Andrea Zelinski)
