Tennessee businesses urge expansion of TennCare

Tennessee businesses urge expansion of TennCare

March 15th, 2013 by Andy Sher in Business Around the Region

NASHVILLE - A newly formed coalition of state businesses and businessmen is urging Tennessee political leaders to expand TennCare under the federal Affordable Care Act, saying rejection is a "job killer."

"Expansion is a win-win-win for Tennessee," said Dan Hogan with the Coalition for a Healthy Tennessee Economy on Thursday. "Accepting this funding to retool, reform and expand Medicaid will help our economy, create jobs and provide care for a lot of families who would otherwise not have access to health insurance."

Hogan is CEO of Medalogix, a Nashville company, and the former head of Fifth Third Bank's Tennessee operations.

Republican Gov. Bill Haslam continues to weigh the pros and cons of expanding TennCare, the state's version of Medicaid, to an estimated 181,700 people. But there's pressure in the GOP-led General Assembly to oppose expansion.

Senate Speaker Ron Ramsey, R-Blountville, told reporters Thursday he remains skeptical of expansion, which a U.S. Supreme Court ruling last summer makes voluntary and not mandatory for states.

Under the law, the federal government picks up the entire cost of the new enrollees, scaling that to 90 percent after 2019.

Ramsey said if Haslam recommends the expansion, "it'll carry some weight, but I think we'll do our own analyzation."

"Obviously the humanitarian side of me would say that if you can provide health insurance to more people then we ought to be doing it. But the realistic side of me says that the federal government, even though they say they're paying 100 percent, can't keep that up. It is impossible. There is no guarantee."

He said, "I would almost lay odds that they will not keep their promise of funding and then what are our options? Either raise taxes on the people of state of Tennessee or remove people from the rolls."

Recalling then-Gov. Phil Bredesen's disenrollement of 170,000 TennCare enrollees in 2005, Ramsey said, "I've been through that once and it's no fun. So it just takes a lot of analyzation."

But businesses have their own analysis. This week, Jackson Hewett Tax Service issued a report of the tax consequences for employers in states that do not expand.

The report says Tennessee companies employing 50 or more lower-paid workers collectively face paying $60 million up to $89 million in annual tax penalties if the state rejects expanding TennCare.

"It's clear to businesses that rejecting this funding would be a 'job killer' as it would increase tax penalties on businesses by about 50 percent," Hogan said. "This burden will be borne by businesses and business owners all across the state."

The Medicaid expansion covers low-income adults with incomes between 100 percent and 138 percent of the federal poverty level. If the state doesn't expand, they would enter a health care exchange that helps people with incomes of between 100 percent to 400 percent of the poverty level with tax credits and subsidies.

But employers of those making 100 percent to 138 percent of poverty and who wind up on the exchange would face tax penalties.

Across the state, chamber groups have endorsed expansion. Among them is the Chattanooga Chamber.