New TennCare Rules Raise Premiums for Beneficiaries with Higher Incomes

Under new rules that took effect July 8, higher-income beneficiaries in TennCare, Tennessee's Medicaid managed care program, will pay increased premiums, the Nashville Tennessean reports. The premium increases will affect about 188,000 beneficiaries, mostly those with incomes exceeding 200% of the federal poverty level, or $17,650 for a family of four. For instance, a family of four earning $42,000 will pay a monthly premium of $375 for family coverage, a 43% rise from the old premium of $261.56. The premium increases "join mandatory copayment charges enacted in May" that were part of a larger overhaul of TennCare. Under those changes, uninsured and uninsurable TennCare beneficiaries who earn too much to qualify for traditional Medicaid pay copayments -- based on a sliding income scale -- for prescription drugs and doctors' visits, replacing the old system of coinsurance and deductible payments. Out-of-pocket costs for such beneficiaries are capped at $1,000 to $4,000, depending on beneficiaries' annual incomes. Gov. Don Sundquist (R) first proposed the TennCare changes last November in response to state lawmakers' calls to increase cost-sharing among TennCare beneficiaries with higher incomes. TennCare officials say the new payment system may not necessarily result in additional revenue for the state because "lower-income members may save money by making smaller copayments in lieu of deductibles and coinsurance." TennCare spokesperson Lola Potter added, "People at high levels of income will be paying more, while people at 150% of poverty or less could be paying less because they are not having to pay anything but a copayment" (Russell, Nashville Tennessean, 7/7).