TennCare Commission Recommends Splitting Program into Three for Long Term Viability

Tennessee's financially troubled Medicaid waiver program, TennCare, should be split into three "distinct" programs, the Commission on the Future of TennCare recommended last week. The panel, made up of "statewide health care experts," was created to advise Gov. Don Sundquist (R) on "how to make the health plan survive," the Memphis Business Journal reports. In 13 months, the federal waiver that allows TennCare to operate as a national demonstration project will expire, and federal officials have been "less than enthusiastic about TennCare's overall seven-year performance." The waiver's renewal is not guaranteed, and there is widespread agreement that changes in the program are needed, though any changes will require federal approval. Noting that the program provides "incentives" for people to enroll even when employer- sponsored health insurance is available to them, the committee recommended that the state restructure TennCare as an insurer "of last resort." To that end, the committee suggested separating the chronically ill and the working poor from TennCare, instead implementing individual health plans for those populations. TennCare Assist would help the working poor who cannot afford or are not offered employer-based health insurance by providing premium assistance, though the committee's proposal also stated that employers "should be prevented from reducing their own share of premiums once state money is available." The other plan, TennCare Plus, would incorporate individuals with severe or chronic illnesses, who are considered uninsurable due to the expensive nature of their illnesses. Such a move would not affect the overall costs of caring for that population, but would make those costs more apparent, said Al King, president of Memphis Managed Care Corp., which operates a plan that handles a number of chronically ill patients. King explained, "It doesn't increase the overall cost, but these cases won't be hidden or buried in the numbers. And, those enrollees' claims won't be reflected in [health plans'] commercial rates." The Memphis Business Journal reports that the TennCare Plus benefits package "would mirror a standard plan for the community," possibly meaning a reduction in the current TennCare benefit package. Furthermore, the plan would be available for the working poor whose employers do not offer coverage. The committee also recommended that TennCare allow weekend enrollment to avoid a situation where an individual could be admitted to a hospital on a Saturday, but would not be able to enroll in TennCare until Monday. In such a case, the hospital now has to assume care costs for two days. The commission's recommendations do not include much information about how to pay for the new plans -- an omission that pediatrician Hershel Wall, commission member and associate dean for Admissions and Student Affairs at the University of Tennessee Center for Health Sciences, said was intentional. He added, "If we move into micromanagement, particularly in financing, the commission would lose credibility. One of the guiding principles was that this should be long on principle and short on details." According to the commission's report, the General Assembly has the "responsibility" to "properly fund TennCare," noting that the "state has not taken full advantage of federal funding through other channels." TennCare recipients will be required to pay deductibles and copayments for services, based on their Medicaid status and ability to pay (Shepard, Memphis Business Journal, 11/13).