Proposed TennCare Reforms Would Drop 180,000, Halt New ‘Uninsurable’ Enrollments

About 180,000 people would be dropped from TennCare, Tennessee's Medicaid managed care program, under reform plans announced Sept. 28 by Gov. Don Sundquist (R), the Memphis Commercial Appeal reports. Saying the current program is "more than [the state] can afford," Sundquist outlined a proposal to trim costs by restructuring TennCare into three parts, dropping coverage for some beneficiaries and closing enrollment to those deemed "uninsurable" in the private market. All changes to the program require federal approval.

The Losers
Of the population expected to lose coverage, 135,000 are adults earning more than 100% of the federal poverty level, or an annual income of $8,590, or who no longer meet the state's definition of "uninsurability." To determine whether a person is insurable in the private market, the Commercial Appeal reports that the state will hire an underwriter. Others slated to lose coverage include 40,000 Medicare beneficiaries who pay premiums to access TennCare benefits not covered by Medicare, namely prescription drug coverage. Also, the program reforms would drop 4,000 children whose families earn more than 200% of the federal poverty level, or with annual incomes of $35,300 for a family of four (Wade, Memphis Commercial Appeal, 9/29). The reforms also include "supplemental" payments to hospitals and providers caring for uninsured and underinsured patients, but some hospital administrators said the additional funding would not "be adequate" to cover the costs of patients losing coverage (Powers, Memphis Commercial Appeal, 9/29). More information regarding the governor's proposal is available online.

Providers, Advocates Respond
With coverage for some TennCare enrollees "terminated or substantially reduced," TennCare advocates said the "brunt" of the reforms will impact the elderly, disabled, mentally ill and those in rural areas. George Haley, a mental health activist, said that by eliminating coverage for "uninsurables," costs will "skyrocket" as people with mental illness "cycle in and out of hospitals" (Memphis Commercial Appeal, 9/29). Health official and advocates also said the changes would make it difficult for those near the poverty line or with chronic conditions to find health care. Under the reforms, for example, TennCare will close enrollments to new multiple sclerosis patients, who typically can not purchase private insurance (Memphis Commercial Appeal, 9/29). However, lawyers for TennCare advocates, arguing the enrollment cutoff would cause "irreparable harm," won a temporary restraining order late on Sept. 28 to prevent the enrollment block from taking effect. U.S. District Court Judge William Haynes granted the restraining order "for the time being" and scheduled an Oct. 9 hearing on the matter (Memphis Commercial Appeal, 9/29).

Commercial Appeal Weighs In
In a Sept. 30 editorial, the Commercial Appeal writes that it is "hard to see how fragmenting" coverage will improve TennCare's efficiency. While Sundquist's proposed reforms would "crack down on patients," the editorial says that the proposal lacks "equally tough" provisions for the 10 managed care organizations that participate in TennCare, given that these MCOs often pay providers "late, incompletely or not at all." In addition, the editorial notes that the TennCare Bureau itself has many unsolved "management problems" and lacks an "adequate" central information system. In any event, the Commercial Appeal writes, reducing benefits to TennCare beneficiaries should be the "last option," especially when the "obvious culprit" in Tennessee's fiscal "crisis" is the state's "obsolete and unfair tax structure." The editorial concludes: "Poor and sick people who need health insurance shouldn't be sacrificed to appease critics who use TennCare merely as an excuse to change the subject from the tax and spending reform Tennessee requires" (Memphis Commercial Appeal, 9/30).