Federal Judge Issues Injunction Preventing TennCare From Halting Enrollment of ‘Uninsurable’ Adults

A federal judge on Oct. 11 issued a "provisional preliminary injunction" preventing TennCare, the state's Medicaid managed care program, from closing enrollment to adults who are unable to obtain private coverage due to pre-existing medical conditions, the Nashville Tennessean reports. In issuing the injunction, U.S. District Court Judge William Haynes said the state had violated an agreement reached in an earlier lawsuit that required it to give 30 days notice of "intent to close enrollment." Gov. Don Sundquist (R) announced the closure on Sept. 28 and it was to have taken effect on Oct. 1 (Synder, Nashville Tennessean, 10/12). The proposal to close enrollment to "uninsurable" adults is part of Sundquist's TennCare reform plan. Under the Medicaid waiver proposal, TennCare would be split into three insurance pools. Beneficiaries who are categorically eligible for Medicaid would be placed into TennCare Medicaid, Medicaid-ineligible beneficiaries with no access to employer-sponsored health coverage would be placed in TennCare Standard and people who have access to employer-sponsored insurance but cannot afford the premiums would be put into TennCare Assist, which would subsidize premiums. The proposal also would cut from TennCare about 180,000 beneficiaries who are Medicaid-ineligible, a move that would save the state $150 million (Kaiser Daily Health Policy Report, 10/10). Sundquist has said closing enrollment to uninsurable adults will keep TennCare from exceeding its federal cap of 1.5 million enrollees (Wade, Memphis Commercial Appeal, 10/12). Program enrollment grows by about 7,400 people a month, of whom about 2,000 are considered uninsurable. Haynes said he will soon issue a written decision on whether the injunction is permanent; the state is determining whether to appeal the ruling (Nashville Tennessean, 10/12).

Impact on Mental Health Costs
In court testimony on Oct. 11, TennCare director Mark Reynolds said that while the state would save $7.5 million by "blocking" new uninsurable enrollments, it would face "uncalculated costs" in other programs as those denied covered sought services financed "solely by the state." TennCare, by contrast, receives state and federal funding (Memphis Commercial Appeal, 10/12). Overall, Sundquist's plan to reform TennCare would cost the state $100 million to replace mental health services, according to Elisabeth Rukeyser, the commissioner of mental health and development disabilities. In testimony before the Legislature's TennCare Oversight Committee, she said that cutting mental health services would also cost the state $200 million in federal matching funds. Currently, TennCare is enrolling uninsurables with mental illnesses at a rate of 6,000 annually. However, Rukeyser said that if these people were dropped from TennCare and received services with "state-only dollars" it would cost "about $50 million to substitute state money for what is currently paid by TennCare." About 180,000 "seriously" mentally ill patients are enrolled in TennCare, of whom 30% are uninsured or uninsurable (Cheek, Nashville Tennessean, 10/11).