Tennessee's Legislature and Gov. Bill Haslam's administration are wrongly determined to make significant cuts of nearly $130 million in TennCare, the state's Medicaid program, which provides health care for the poor, the disabled, the mentally ill and for two-thirds of the seniors in nursing homes. There's a much better option available: until tax revenue recovers, the state should tap into its excessive TennCare reserve funds, which now amount to $260.6 million.
By using $38.4 million of the contingency fund, which is rarely touched and now unusually large, the state could draw down an available $80 million in federal 2-for-1 matching funds. Taken together, that would stave off cuts which would otherwise amount to more than $116 million in lost health-care funds for TennCare in the new 2011-12 fiscal year.
Regrettably, state officials don't seem interested in this option, nor do they seem much concerned about the impact of the cuts they propose. That view is harshly myopic. It ignores the pain and suffering to patients that will come with the cuts, and it overlooks the larger savings that are likely to accompany maintenance of the existing TennCare budget.
For example, the cuts proposed in TennCare funds for community mental health services, the largest source of support for these services, would surely lead to higher costs for incarceration of the mentally ill who would no longer have access to their medications. Hamilton County is already experiencing higher costs for jailing larger numbers of mentally ill defendants whose health care has been disrupted.
Cuts in other areas would generate similar spin-off costs. Tennessee already has one of the nation's highest infant mortality rates. Yet proposed cuts would restrict access to prenatal programs and specialized care for women with high-risk pregnancies, jeopardizing care for fragile infants and putting mothers' health at risk, as well. Overall, prenatal and birthing care would be cut more than $44 million.
Other cuts would slash $25 million in already-low reimbursements to emergency room physicians, and $16 million from nursing home care. A range of other cuts would come in dental, lab, pharmacy and x-ray services, transportation of the disabled and home health care providers. Cuts to health-care providers, moreover, reduces the general consumer spending that supports the economy.
Such cuts, in addition, would follow several years of more severe cuts in the numbers of people eligible for TennCare and the services they receive. This trend must be stopped if TennCare is to remain a viable service for Tennesseans who are too poor to afford private insurance, and if the state is to have a healthier low-income population - the principal antidote to rising TennCare costs.
Funding for TennCare and Medicaid is, admittedly, a tough issue to tackle. Medical costs continue to rise far faster than personal income, state and federal tax revenues, and the general rate of inflation. Indeed, increases in health care costs have been double or triple the rate of general inflation over the past decade. But Republicans in Washington, and governors of both parties in most states, continue to neglect the core issue of the continuing rapid rise in health care costs.
In fact, most Republicans - and Tennessee's government is now predominately Republican - have yet to suggest any strategies to restrain the medical-cost curve. All they've done so far is talk about repealing the Affordable Care Act and the reforms that will come with it in 2014, while avoiding any discussion of alternative plans to actually reduce or restrain the current medical cost trends.
Remedies, however, are available, and states have now been authorized to develop their own plans, or alternatives, to health care reform if they don't like the ACA's model. But it will take serious, systemic reform (support for the broad reforms now pending under the ACA is the better option) to keep health care affordable. Cutting health care for the poor, which essentially means shifting the cost for their emergency care to publicly subsidized local hospitals and their privately insured patients, is no answer. Given the challenge ahead, it's not even a Band-Aid.