By Sean Miskell
This week, Governor Haslam announced his plan to expand Medicaid via a two-year pilot program called Insure Tennessee. Like other formerly recalcitrant states that are now embracing expansion, Tennessee is pursuing a state-specific approach that differs from ‘traditional’ Medicaid expansion. One element of this plan – in which the Tennessee Hospital Association has agreed to finance all costs not covered by the federal government –shines a light on just how important Medicaid expansion is for both Tennessee’s residents and the health care providers that serve them.
Tennessee’s Unique Approach
At CCF, we have been documenting how practical considerations have led policy makers that have previously expressed opposition to Medicaid expansion and the Affordable Care Act more generally to reconsider their position and look for ways to expand Medicaid in their state. As a result, late-comers to the Medicaid expansion have sought to craft state-specific plans that alter the way in which Medicaid beneficiaries receive coverage, such as using federal funding to purchase private insurance coverage as we have seen with the ‘private option’ in Arkansas or incentives for healthy behaviors found in Iowa’s version of Medicaid expansion. Numerous other states have submitted or are considering their own state plans to both reflect each state’s unique circumstances and out of concern for political expediency.
Under the Insure Tennessee proposal, Medicaid beneficiaries would have a choice between a ‘Healthy Incentives Plan,’ an augmented version of Medicaid in which recipients pay modest premiums and co-pays, or the ‘Volunteer Plan’ that provides beneficiaries with vouchers to help pay for private coverage. Should beneficiaries choose the Healthy Incentives Plan, they can earn money to pay for cost-sharing expenses through their Healthy Incentives for Tennesseans account by engaging in by engaging in healthy behaviors such as participating in preventive services or disease management programs. The Volunteer Plan is intended for residents that may have access to insurance through their employer but cannot afford it.
Coverage Benefits for Patients and Providers
Say Ahh readers know that we’re generally skeptical of such state-specific plans that make Medicaid more complicated, but welcome that states like Tennessee are expanding coverage to more residents, including 200,000 uninsured Tennesseans. We’ve been documenting how important Medicaid expansion is in reducing the number of uninsured residents in states across the country. States that have expanded Medicaid have seen a bigger drop in uninsured rates, as shown in surveys conducted by the Urban Institute and the Commonwealth Fund, and in data recently released by the Centers for Disease Control and Prevention’s National Health Interview Survey.
In addition, Tennessee’s expansion plan also underscores why expanded coverage is good for health care providers as well. The Tennessee Hospital Association not only came out strongly in favor of expansion but under Haslam’s proposed plan, but has agreed to fund any part of the expansion not covered by the federal government. While the feds pay for 100 percent of the cost of expansion for the first three years (through 2016), the federal contribution eventually reduces to 90 percent.
Hospitals across the country have come out in favor of expansion because when more people have health coverage, hospitals provide less uncompensated, ‘charity’ care. We have noted the dramatic decline in hospital charity care being delivered in states that have expanded Medicaid, while it has risen in states like Tennessee. It is no wonder that the Insure Tennessee plan has broad support from both health advocates and businesses alike, just as hospital associations in states that have been hesitant to expand Medicaid have expressed support including Oklahoma and Florida.
Expansion Gaining Momentum
Tennessee’s plan to expand Medicaid is further evidence that expansion is gaining momentum among states that were formerly hostile to it. Already, Tennessee’s decision has prompted calls to expand in other states such as North Carolina. Of course, the Insure Tennessee plan is still preliminary, and needs to be approved both by the federal government and the Tennessee state legislature. But regardless of how the plan unfolds, the mere willingness of Tennessee’s hospitals to help finance the cost of expansion is strong evidence of how important Medicaid coverage is for both Tennessee’s residents and health care providers.
