While many states either rejected or accepted federal funding for Medicaid expansion, Tennessee Gov. Bill Haslam has a different plan—the Tennessee Plan. It involves purchasing private health insurance for Tennesseans who wouldn’t be able to otherwise afford it.
“For the last several months, I’ve been working toward a Tennessee Plan for health reform to change the way that healthcare coverage looks in Tennessee,” Haslam said in a March 27 speech. “I fundamentally believe that people having healthcare coverage is better for our citizens and state than people not having healthcare coverage.”
Those who live at 100 percent of the poverty level are currently eligible for TennCare benefits, according to 36th District Rep. Dennis Powers. However, the Department of Health and Human Services has given states the option to use federal funding to expand Medicaid benefits to those who live slightly above the poverty level, Powers said. Such an expansion would extend coverage to 175,000 Tennesseans by increasing the amount of money those eligible for TennCare can make and still qualify. The federal government would fund the money for three years, and then gradually decrease the funding.
From the hospital and community’s perspective, “TennCare expansion is a positive thing,” LaFollette Medical Center CEO Mark Cain said.
“We see people every day who desperately need (health) services,” he said. “Not having any expansion would be a negative thing for our (community.) We really do need that expansion.”
When the Affordable Healthcare Act, also known as Obamacare, was being formed, the American Hospital Association negotiated with the Obama Administration, agreeing to make cuts to Medicare, Cain said.
“The promise was, we’ll (healthcare providers) expand to people covered by Medicaid to make up for those cuts to Medicare,” Cain said.
LaFollette Medical Center is a part of the Tennova System, and isn’t part of the American Hospital Association, Cain said.
But LMC has been affected by cuts that began this year, and needs the funding from Medicaid expansion to make up for the money lost.
“We need that to make up for those cuts the AHA agreed to,” Cain said.
Cain doesn’t know how much money has been cut.
“At the moment, we don’t know exactly,” Cain said. “It’s all based on patient mix. It’s still going to be fairly substantial.”
Despite the benefits to expanding TennCare, the long-term costs have been a concern for some because it would cost Tennessee $1.2 billion over a 10-year period to expand TennCare.
“We didn’t want to expand it,” Powers said.
This money would come from the taxpayers’ pockets, according to Powers.“I think he (Haslam) made the right decision,” Powers said.
The plan will allow the state to use the federal money without increasing its budget, Powers said. Therefore state taxes wouldn’t increase as a result of the Tennessee Plan.
“Buying them (private insurance) would be a whole lot less expensive than expanding our TennCare program,” Powers said. “He’s wanting to hold down costs, and yet provide healthcare for those who truly need it.”
Haslam sees the Tennessee Plan as a way for Tennessee to use federal funding to become a “model for what true healthcare reform looks like.”
Under the Tennessee Plan, there would be co-pays for those who can afford to pay “something,” Haslam said.
Haslam also hopes to work with providers to lower the cost of healthcare. “We would work with providers to lower the cost of care,” Haslam said. “That’s a high bar for our providers, but I’m convinced they can do it.”
After the federal government stops fully-funding the Tennessee Plan in three years, the General Assembly would have to approve renewing it. Haslam described this as a “circuit breaker.”
However, the Department of Health and Human Services hasn’t agreed to Haslam’s plan, and he is still negotiating to receive the federal money.
“He’s still working with them, trying to negotiate some type of reasonable contract where he can purchase some type of health insurance for (these) people,” Powers said. “We’re still trying to get the federal government to agree to that.”
The General Assembly usually votes on the state budget at the end of session and will probably begin work on it this month, Powers said.
The 2013-14 Tennessee budget will not include language to accept the federal funds, Haslam said.
“To succeed we also need the cooperation of the Department of Health and Human Services in Washington, and we can’t get the same assurances from them at this point,” Haslam said. “Until we get those assurances, I cannot recommend to you we move forward with this plan.”
While LMC needs federal dollars, Cain believes Haslam is doing what is best for Tennessee.
“I have to take my hat off to him for being wise,” Cain said. “I’m impressed, the governor’s being thoughtful.”
However, he hopes an agreement will be reached, so the community will receive funds. “I certainly hope that (the Center for Medicare and Medicaid Services) and Secretary Sebelius agree with the governor,” Cain said.
Cain is confident LMC will continue to provide quality healthcare to the community.
“It’s certainly not going to close the hospital,” Cain said. “We will do anything in our power to protect patient care.”
LMC is growing, and Cain and his staff intend to keep it growing, Cain said.“We will continue to provide safe care, but these cuts are significant,” Cain said.