Insurers Urge Tennessee to ‘Slash’ Benefits for 452,000 TennCare Enrollees

In a Sept. 4 meeting of Tennessee's panel to revamp TennCare, the state's Medicaid managed care program with 1.4 million beneficiaries, insurance industry representatives urged state officials to divide the program into two parts -- one for beneficiaries categorically eligible under Medicaid and one for beneficiaries eligible through the state's expansion waiver -- with the goal of "slashing" health benefits for the 452,000 beneficiaries who are only eligible because of the waiver, the Memphis Commercial Appeal reports (Wade, Memphis Commercial Appeal, 9/5). This year, state officials plan to revamp TennCare through a new federal Medicaid waiver. Tennessee established TennCare in 1993 through a waiver that will expire Dec. 31 (Kaiser Daily Health Policy Report, 8/21). Testifying before the state TennCare Oversight Committee, insurance industry officials asked the state to reduce TennCare benefits to "uninsured" enrollees -- those beneficiaries who are not categorically eligible for Medicaid and who lacked health coverage when TennCare began in 1995 or who cannot afford employer-sponsored health insurance -- and "uninsurable" enrollees -- those waiver-eligible beneficiaries who cannot obtain private health coverage because of pre-existing medical conditions. Specifically, Tom Wildsmith of the Health Insurance Association of America said the state should reduce benefits to uninsured and uninsurable TennCare beneficiaries to ensure that the program "doesn't compete" with private insurers. However, state Rep. Gene Caldwell (D), chair of the oversight panel, said that waiver-eligible uninsured and uninsurable TennCare beneficiaries are required to pay premiums that bring additional federal matching funds to the program, adding that the federal government might not provide matching funds for a new TennCare program with "slashed" benefits. Last year, TennCare beneficiaries paid $54.5 million in premiums, which brought in about $100 million in federal matching funds. State officials will consider whether to regulate private insurers "more heavily" to prevent "dumping" of high-risk patients into TennCare and whether insurers should have to contribute funding to the program. During the hearing Sept. 4, insurance officials "repeated their long-standing opposition" to increased regulation of private insurance, benefit requirements and plans that would force insurers to "support TennCare financially" (Memphis Commercial Appeal, 9/5).

TennCare Takes 'Riskiest' Population
However, during a state select legislative committee hearing yesterday, TennCare Commissioner John Tighe said that the number of uninsurable TennCare enrollees has jumped from 21,031 in 1994 to 163,040 this year -- nearly an eightfold increase (Cheek, Nashville Tennessean, 9/5). "We believe TennCare has made it easier for insurance companies to avoid writing policies for sick individuals, and we believe TennCare has lowered their level of risk," Tighe said (Memphis Commercial Appeal, 9/5). State Rep. Gary Odom (D), chair of the committee, said, "Some have concluded that insurance companies are dumping their worst risks into TennCare," adding, "I don't know whether I am ready to say that yet, but I say the 800% growth in uninsurables is a symbol of something going on." Tighe said, "We believe that TennCare has taken up 75% of the riskiest population, and the insurance companies have the remainder" (Nashville Tennessean, 9/5). For further information on state health policy in Tennessee, visit State Health Facts Online.