TennCare Can Close Enrollment to Uninsurable Adults, Federal Appeals Court Rules

A federal appeals court on May 6 ruled that TennCare, Tennessee's Medicaid managed care program, may block enrollment of adults considered uninsurable in the private market because of pre-existing medical conditions, reversing a ruling by a lower federal court, the AP/Memphis Commercial Appeal reports. The 6th U.S. Circuit Court of Appeals decided to vacate a ruling by U.S. District Judge William Haynes because it said the plaintiffs in the case -- represented by the Tennessee Justice Center -- lacked legal standing to file suit because they already are enrolled in TennCare (AP/Memphis Commercial Appeal, 5/7). The recent ruling stems from a lawsuit originally filed by the Tennessee Justice Center, in which Haynes on Oct. 26 decided that the state could not proceed with a plan by Tennessee Gov. Don Sundquist (R) to close TennCare enrollment to uninsurable adults. Haynes ruled that the state had violated an agreement reached in an earlier lawsuit that required it to give 30 days notice of intent to close enrollment (Kaiser Daily Health Policy Report, 10/12/01).

'Little Value' To State
TennCare spokesperson Lola Potter said the federal appeals court ruling might be of "little value" to the state because officials had wanted to block enrollment from Oct. 1, 2001 through July 1, 2002, the beginning of the next fiscal year and the date Sundquist's planned TennCare overhaul is set to begin. The state had expected to save $7.5 million and maintain enrollment under the federally mandated 1.5 million cap by blocking enrollment of uninsurables during that period, the AP/Memphis Commercial Appeal reports. Potter said, "We're glad the court agreed with us, but in practicality I'm not sure how much of an impact it will have" (AP/Memphis Commercial Appeal, 5/7). Sundquist's proposal would scale back TennCare to a managed care plan -- called TennCare Medicaid -- for Medicaid-eligible residents. The plan also calls for the creation of TennCare Standard, which would offer benefits similar to those under a commercial managed care plan to adults with no access to group insurance and with incomes below the poverty level and children in families with incomes below 200% of the poverty level and no access to group insurance. 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, 2/14).