Tennessee Lawmakers Question Cost Savings in Governor’s TennCare Reform Proposal

Members of the Tennessee Senate Finance Committee on Dec. 12 urged state officials to delay seeking federal approval to reform TennCare, the state's Medicaid managed care program, until the proposal by Gov. Don Sundquist (R) is studied further, the Memphis Commercial Appeal reports (Wade, Memphis Commercial Appeal, 12/13). Sundquist's controversial proposal, to be sent to federal officials as a modification of the existing TennCare waiver, would scale back the program to a managed care plan -- called TennCare Medicaid -- for Medicaid-eligible residents. Sundquist's plan also calls for the creation of TennCare Standard, which would offer benefits similar to those under a commercial managed care plan to the following groups: adults with no access to group insurance and with incomes below the poverty level; children in families with incomes below 200% of the poverty level and no access to group insurance; and medically eligible people with illnesses that make them uninsurable. The proposal also would create TennCare Assist, which would offer premium assistance to low-income workers to purchase private health insurance (Kaiser Daily Health Policy Report, 12/12). During a Dec. 12 committee hearing on the proposal, state House Finance Chair Matt Kisber (D) said, "This proposal, while ... designed to restrain spending, could actually cost the state more money while denying hundreds of thousands of Tennesseans health care." He added, "I think the members want to be careful about moving forward on a proposal whose consequences aren't fully understood" (Memphis Commercial Appeal, 12/13).

Savings or Losses?
Gordon Bonnyman of the Tennessee Justice Center questioned the amount of savings the state is expected to have with the reforms, saying they would "evaporate when other things are considered" and that the state would "also lose $74 million in premiums that would have been paid by the disenrolled people." The proposed reforms, which would drop up to 180,000 Medicaid-ineligible beneficiaries from the program, would save Tennessee about $142 million per year, according to the Sundquist administration. The state, however, would lose about $340 million in federal matching funds each year. Bonnyman added that federal funds for TennCare also are used to support other state departments, including the Department of Health. The Joint TennCare Oversight Committee "raised similar concerns" on Dec. 11 (Commins, Chattanooga Times and Free Press, 12/13). This legislative review is the "only time" that lawmakers can influence the reform proposal; the waiver proposal does not require the state Legislature's approval, but state Comptroller John Morgan, a legislative appointee, must sign it (Memphis Commercial Appeal, 12/13).

Waiver Calls for Advisory Panel
The Nashville Tennessean reports that Sundquist's waiver proposal would create a 12- to 15-member advisory committee composed of care providers and insurance representatives to oversee the TennCare overhaul. According to John Tighe, the panel would provide "advice, counsel and oversight" for the program but would have "no direct control" over it. The panel would conduct public meetings and review quarterly updates from managed care companies that serve TennCare enrollees (Lewis, Nashville Tennessean, 12/13).