Capitol Hill Conversation – Blocking TennCare Expansion

In December, tea party members rallied outside the capitol to discourage Governor Bill Haslam from establishing a state health insurance exchange. Image courtesy Nashville Tea

In December, tea party members rallied outside the capitol to discourage Governor Bill Haslam from establishing a state health insurance exchange. Image courtesy Nashville Tea

After an opening gavel, the General Assembly is back to work. Whether or not to expand TennCare could be the most costly decision the body makes this year, and the first bill out of the gate would prevent Tennessee from expanding its Medicaid program as envisioned under the Affordable Care Act.

State Sen. Brian Kelsey (R-Germantown) filed SB0001 the day after November’s election, saying his constituents were calling for it. But Republican leaders like House Speaker Beth Harwell have been calling for lawmakers to give Governor Bill Haslam room to take the lead.

“I do plan to re-file the legislation,” Kelsey tells WPLN. “And I look forward to speaking to the governor about it before that takes place.”

In the balance are folks who make just a little too much money to qualify for TennCare currently. And by state estimates, there are roughly 145,000 of these people who would be eligible starting in 2014.

The federal government would cover the full cost for the first few years, which has Democrats like Nashville Congressman Jim Cooper saying Tennessee would be crazy to leave the money on the table.

Still, the expansion would cost Tennessee roughly $500 million in the first five years, and many Republicans will say they don’t believe Washington can pay for its part of the deal.

But TennCare costs skyrocket either way.

The TennCare Bureau expects $900 million in new expenses over the next five years for one reason, and they call it the “woodwork effect.”

There are thousands of people who already qualify for TennCare but for whatever reason haven’t enrolled yet. Starting next year, when everyone has to carry health insurance, the state figures they’ll go with the cheapest option – Medicaid.

The “woodwork” enrollees are a much smaller group than those who would be newly eligible – 45,000 in 2014. But the federal government isn’t offering it’s more generous match for people already eligible.

“We already know that there are going to be expansions in Medicaid funding regardless of whether or not we expand coverage as required under the Obamacare act,” Kelsey says. “With those additional costs, we can’t possibly afford any new ones.”

States have the leeway to get out of expanding Medicaid because of a landmark Supreme Court decision made last year.

And while many Republicans have bristled at all things Obamacare, some of the state’s hospitals say their survival is on the line.

TennCare Director Darin Gordon didn’t put it quite like this, but his view is that the expansion decision has a sort of damned if you do, damned if you don’t element to it.

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