TennCare Has Lowest Per-Beneficiary Costs of All Medicaid Programs, Study Finds
TennCare, Tennessee's Medicaid managed care program, was the least expensive Medicaid plan in terms of per-beneficiary costs compared with programs in the other 49 states, according to an HHS study, the Nashville Tennessean reports. In a review of spending in 1998, the study found that Tennessee and the federal government spent a combined $2,825 per TennCare beneficiary. By comparison, New York's Medicaid program cost the state and federal government a combined $9,474 per beneficiary -- the highest per-beneficiary cost in the nation in 1998. For the fiscal year that ended July 1, 2002, TennCare spent $2,957 per beneficiary, a 5% increase from the 1998 cost, according to TennCare spokesperson Lola Potter. Expanding coverage to Medicaid-ineligible populations was the "key" to TennCare having a low per-beneficiary cost, Katie Levit, director of national statistics for CMS, said. She added that while Medicaid beneficiaries typically have more health problems, TennCare was able to distribute those costs by insuring mostly healthy people. She said, "When you extend coverage to more low-cost people, you cut the program's [per person] cost" (Lewis, Nashville Tennessean, 7/9). The study, published in Health Affairs, is online.
TennCare Offers 'Bang for the Buck'
Lawmakers examining Gov. Don Sundquist's (R) proposal to reform TennCare by dividing it into three parts should "consider the cost-effectiveness" of the current program demonstrated by the federal study, a Nashville Tennessean editorial states (Nashville Tennessean, 7/11). Under Sundquist's plan, recently approved by the federal government, the state would create TennCare Medicaid, which would cover Medicaid-eligible individuals, and TennCare Assist, which would provide low-income workers assistance in purchasing private health insurance. Further, the state would establish TennCare Standard for adults with no access to group insurance and annual incomes below the poverty level, or $8,860 for an individual; children in families with annual incomes below 200% of the poverty level -- $36,200 for a family of four -- and no access to group insurance; and medically eligible people with illnesses that make them uninsurable. During recent state budget negotiations, lawmakers have considered not fully funding the program, which means some beneficiaries would lose coverage (Kaiser Daily Health Policy Report, 6/26). Although some lawmakers say cutting enrollment will save money, expenses would actually increase, as the newly uninsured would seek nonemergency care in emergency rooms, where treatment is more expensive than in primary care settings, the editorial says. Expanding coverage, however, to those individuals unable to obtain private insurance "makes sense," the Tennessean adds. Given that state residents "have made it clear they want bang for the buck from state government ... [n]o program offers the opportunity to prove that point any better than TennCare," the Tennessean concludes (Nashville Tennessean, 7/11).
