Sundquist’s TennCare Reform May Increase State Health Costs, Study Finds

Eliminating 180,000 enrollees from TennCare, the state's Medicaid managed care program, could "backfire" and increase costs for the state, according to a state comptroller's report, the Nashville Tennessean reports. According to the study, those who lose TennCare coverage would likely rely on "expensive" emergency room care, creating an "invisible tax" in the form of higher insurance premiums and health care prices (Lewis, Nashville Tennessean, 10/24). The report is a response to a proposal from Gov. Don Sundquist (R) that would split TennCare 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 Sundquist predicted would save the state $150 million (Kaiser Daily Health Policy Report, 10/10). But according to Ethel Detch, director of the comptroller's office of research, "You might cut [costs] out of TennCare, but you'll shift it somewhere else."

Reforming Insurance
To avoid shifting costs to "charity" care, John Tighe, the state's deputy commissioner for health services, said that Sundquist's proposal includes insurance reform measures that would help those cut from TennCare obtain private health coverage. Testifying before the state Senate Finance Committee, Tighe said that "easy availability" of TennCare discourages the sale of health insurance. He added, "The concept is to have an insurance program, not an entitlement." Under health industry reform proposals, employers will "face penalties" for discouraging workers from purchasing private coverage and relying on TennCare (Nashville Tennessean, 10/24). For further information on state health policy in Tennessee, visit State Health Facts Online.