Tennessee Medicaid expansion plan

A study from the Robert Wood Johnson Foundation (RWJF) shows that Tennessee could see a decrease in state spending if Medicaid coverage is expanded.

According to the study, most non-expansion states “would increase state spending under expanding,” however this is not the case for Tennessee.

“Tennessee’s spending will decrease slightly by 0.1 percent because the state has one of the highest parent eligibility thresholds among non-expansion states at 82 percent of FPL (federal poverty level).”

The study also estimated that more than 300,000 people would enroll in Medicaid and CHIP (Children’s Health Insurance Program) and that the expansion could lead to a decrease in the rate of uninsured people by 27 percent.

“Some would be newly eligible enrolled while others would come from the healthcare marketplace and others would transition from more expensive employer-sponsored insurance to Medicaid,” said the study.

The philanthropic health organization conducted research on the 10 states that have opted to not expand Medicaid programs. Among the 10 states are Tennessee, Mississippi, and Alabama. According to the foundation, the states have not expanded their eligibility under the Affordable Care Act.

“Under the Affordable Care Act, states have the option to expand Medicaid eligibility to non-elderly people with incomes up to 138 percent of the federal poverty level,” reads the executive summary of the study. “Governors, legislators and other stakeholders in many of the non-expansion states are actively debating Medicaid expansion.”

In 2012, the Supreme Court of the United States ruled that while Americans are required to have affordable health insurance coverage, the decision to expand coverage lies within the state. Tennessee has opted to not expand.

According to the Tennessee Justice Center, which advocates for improved health care and economic policies for families, there are “$1.4 billion of federal tax dollars per year in Washington” allocated for the state to use.

“Thanks to the American Rescue Plan’s incentive, our state could also receive an additional $900 million over two years ($1.2 million per day) over and above the cost of expanding coverage,” said the organization.

While the study does not include a state-by-state analysis, it did say that expansion would also reduce uncompensated care in Tennessee. The study cited information from the Tennessee Hospital Association saying that state hospitals “provided $1.1 billion worth of uncompensated care in 2021 for the underinsured and uninsured.”

This has also led to a number of rural hospital closures in the state.“Tennessee has experienced 16 hospital closures, with 13 of those being rural, since 2010 — the second highest rate in the United States. Of the 95 counties that make up the state, 82 percent are rural,” said the Tennessee Hospital Association.

Former Tennessee Governor Bill Haslam pushed for Medicaid expansion starting in 2013, however the state Senate blocked Haslam’s proposals.

There are lawmakers such as Representative Caleb Hemmer (D-Nashville), who have openly advocated for Medicaid expansion. Following the release of the study, Hemmer took to his X (formerly Twitter) account to not only share highlights of the report, but to express his support of expansion.

“It’s passed (past) time we did it in Tennessee,” said Hemmer. “ A dirty little secret is Tennessee expanded Medicaid because of the COVID waivers recently and @TennCare did a great job managing the same populations that we would through traditional Medicaid Expansion. Now, the working poor who would benefit are starting to get disenrolled.”

Hemmer’s tweet references the Medicaid continuous coverage rule, which ended in March of 2023. Under this rule, states could disenroll people from Medicaid. The state had previously been prohibited from doing so due to a nationwide pause on this policy as a result of the COVID-19 pandemic.

Events in Tennessee state government were on center stage this week, with the convening of the Tennessee General Assembly just around the next turn of the calendar.

The big political/governmental news of the week was, beyond doubt, Governor Bill Haslam‘s announcement of a provisional agreement with the federal government on an alternative Tennessee plan for Medicaid expansion in Tennessee.

The plan, which Haslam called “Insure Tennessee,” would, he said, “leverage” Medicaid-expansion money under the Affordable Care Act (ACA) 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 a special session to be held in January, in advance of the regular 2015 session of the General Assembly.

If approved, the plan apparently would, like standard Medicaid expansion, make the state eligible for millions of dollars in new funding under the ACA, a result that the state’s hospital executives, many of them facing critical shortages, have been aggressively lobbying for.

Initial response to the plan on the part of Tennessee’s public officials was overwhelmingly positive on both sides of the party line, with Tennessee’s two Republican U.S. Senators, Lamar Alexander and Bob Corker, quickly conferring their approval, as did the state’s ranking Democrats, 5th District Congressman Jim Cooper of Nashville and 9th District Congressman Steve Cohen of Memphis (though Cohen was one of several Tennessee Democrats to deplore the GOP-dominated state government’s long delay in responding to the proffer of substantial federal funding.

At stake has been millions of dollars in potential aid to fund medical coverage for indigent patients through TennCare, the state’s version of Medicaid (itself, ironically, established a generation ago through a waiver agreement with the federal government during the administration of the late former Governor Ned Ray McWherter).

Several of Tennessee’s hospitals have been experiencing severe financial difficulties, and they, along with prominent members of the state’s business establishment, have been lobbying hard for a change of mind by Haslam, who, confronted by widespread hostility by his fellow Republicans in the legislature to what they called Obamacare, had declined to accept funding for Medicaid expansion in 2013.

Haslam said at the time that he would attempt to reach an agreement with the Obama administration for an alternative Tennessee expansion plan that deviated from strict ACA requirements. He had subsequently been in protracted negotiations with officials of Health and Human Services and the Centers for Medicare and Medicaid Services (CMS) to obtain such a waiver.

At his announcement/press conference on Monday, Haslam told reporters that federal officials had basically pre-approved a waiver for the plan — which must first, however, be approved by both houses of the Tennessee legislature under terms of a restrictive statute passed last year.

The chances for that happening were decidedly enhanced by what seemed an open-minded response to the Governor’s plan from Lieutenant Governor/State Senate Speaker Ron Ramsey.

Said Ramsey on Monday: “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.”

Insure Tennessee does indeed cater to Republican free-market shibboleths. It proposes to use the additional federal Medicaid funds to broaden coverage for the state’s uninsured through their employers’ existing health insurance plans or by requiring modest co-pays and premiums for those accessing the aid through TennCare. The plan allows for a reduction in the latter costs if recipients pursue preventive measures and other “healthy choices.”

Democratic legislators indicated a willingness to fall in line with the governor. Typical was the response of the Democratic state House leader, state Representative Craig Fitzhugh (Ripley), who promised to “stand with” Haslam and expressed “my personal thanks to Governor Bill Haslam and the Obama administration for working together on this plan.”

And, as noted previously in this space, Democrats are in a position to provide Haslam with backup in the governor’s professed intention to resist efforts to repeal the Hall Income Tax on the part of GOP ultra-conservatives — several of whom, no doubt, will endeavor to thwart or amend the Insure Tennessee plan during the forthcoming special session.

• Given the disproportionate extent of GOP control in the General Assembly — 28 of 33 members of the state Senate, 73 of 99 in the state House — it would be misleading to use the word “bipartisan” in anticipation of the coming legislative session, but optimists would surely be within their rights to hope for a greater degree of political moderation than has been the case in the past several sessions.

One possible indication of that was the easy reelection (57-15) in the House Republican Caucus last week of state Representative Beth Harwell (R-Nashville) as House Speaker over state Representative Rick Womick (R-Rockvale), a Tea Party Republican. Yet another was a vote in the state Senate Republican Caucus to replace Germantown conservative Brian Kelsey on the Fiscal Review Committee with the relatively moderate Maryville Republican Doug Overbey.

And even Kelsey, a possible thorn in Haslam’s side on the Medicaid and Hall Income Tax issues, struck a moderate note in his announced co-sponsorship with Democratic state Representative John DeBerry (D-Memphis) of a measure that would require law enforcement agencies in Tennessee to adopt policies outlawing racial profiling.

Moreover, there had been a decisive (47-17) vote by the state Republican Executive Committee the week before to reelect as state GOP chairman the establishment-oriented Chris Devaney over Tea Party-leaning Joe Carr, the outgoing state representative from Lascassas who unsuccessfully challenged incumbent Lamar Alexander for the U.S. Senate.

• Tennessee Democrats, meanwhile, were engaged in an effort to decide on a new state chair for their party, to succeed Roy Herron, who is stepping down. All five contenders for the chairmanship — which will be awarded by the state Democratic Executive Committee in Nashville in January — were in Memphis on Saturday making their pitch before an audience of state committee members and other interested Democrats at LeMoyne-Owen College.

Appearing, in sequence, were Mary Mancini of Nashville, former executive director of Tennessee Citizen Action and a recent candidate for a state Senate seat; Terry Adams, the Knoxville attorney who ran a close second to fellow Knoxvillian Gordon Ball in this year’s Democratic primary for U.S. Senate; Gloria Johnson, also of Knoxville, a long-term party activist and current chair of the Knox County Democrats, who was narrowly unseated from the state House this year by a Republican opponent; Lenda Sherrell of Monteagle, who unsuccessfully challenged 4th District GOP Congressman Scott Desjarlais; and Larry Crim of Nashville, chairman of the nonprofit Democrats United for Tennessee and a recent candidate for the U.S. Senate nomination.