NASHVILLE - Republican Gov. Bill Haslam said Tuesday he is not rushing off on a "fool's errand" in pushing his Tennessee Plan for extending Medicaid to an estimated 181,000 low-income people under the federal health care law.
Haslam said he spoke with U.S. Health and Human Services Kathleen Sebelius last weekend and believes central parts of his idea of putting the expansion population into the federally operated health insurance exchange remains doable.
It's a "one-time" opportunity to lower the state's future costs for the expansion and save the federal government $3 for each dollar Tennessee spends, Haslam said.
"This wasn't just a 'I'll throw this up as a way to get out of it,'" Haslam told reporters. "I always thought this was a real possibility. But I'm also not ignorant of the fact that what we're trying to do is not the easiest thing in the world."
Later in the day, the governor rolled out the administration's amendment to his proposed 2013-14 budget. As he told the Republican-controlled General Assembly last week, it doesn't account for the $400 million Tennessee is eligible to receive in federal funds during the first half year for the Medicaid expansion.
The state would be eligible for $1 billion a year after that because the federal government is picking up the entire cost of the expansion for the first three years.
"I don't know if we can work this out in a day, a month or a year," he said of his dealings with the Obama administration.
Haslam acknowledged there are "certain laws" about Medicaid enrollees "that we cannot ignore."
That became evident when Sebelius last week released the department's latest guidance on what states can and cannot do about plans to put the expansion population into the exchanges.
In its guidance for states, HHS last week said states could place the expansion population into the online exchanges in which private insurers will compete to provide their products to enrollees.
But when it comes to Medicaid enrollees, the exchange must be optional unless the federal government grants a state special permission through what is known as a waiver of Medicaid rules, HHS's guidance said.
Haslam acknowledged there is also "probably a rub" on two things he wants to do. That would include his hope of avoiding having to provide the usual Medicaid "wrap around" services like transport to and from a doctor's office for Medicaid-eligible people who go into the exchange.
The second "rub" is on copayments. Haslam wants the Medicaid-eligible people to pay the same copayments as others on the exchange.
Haslam has been in discussions with Tennessee hospitals over ways to cut costs. He wants to use the savings to pay the state's portion of the expansion after its first three years. After that, the federal share decreases for several years before settling at 90 percent. That would amount to about $100 million a year for the state.
The governor's inability to reach a deal with HHS led him last week to tell the GOP-run Legislature that he would not pursue the expansion this year. That drew applause from fellow Republicans, many of whom dislike having anything to do with Obamacare.
Even if he reaches a deal with HHS, he'll still have to sell it to Republicans back home.
"Some folks will say, well, 'You're off on this quest that really is a fool's errand because there's no way you'll work this out,"' Haslam told Nashville business leaders in an early morning address. "My argument would be this really is a once-in-a-lifetime chance to do this, and shame on us if we don't take this chance to do it."
Contact staff writer Andy Sher at firstname.lastname@example.org or 615-255-0550.