The Tennessee State Capitol in Nashville.NASHVILLE -- Gov. Bill Haslam spent nearly two years developing a plan he hoped could win approval in the GOP-dominated General Assembly to provide federally funded health coverage to 280,000 low-income Tennesseans.
But despite the support of hospitals, physicians, chambers of commerce, advocacy groups and others -- as well as the governor's own high voter-approval ratings -- Haslam's Insure Tennessee proposal crumpled on its first vote in the governor's special legislative session Wednesday.
The Senate Health Committee vote was 7-4. The House never acted.
So how does that happen?
According to the governor, lawmakers and others, any number of factors figured in the failure.
For starters, Haslam's plan relied for its funding from President Barack Obama's Affordable Care Act. That's the same "Obamacare" that virtually every Republican in the country has campaigned against since its passage in 2010.
"It was just, you know, 'I'm just afraid that this is Obamacare,'" Haslam said last week. "As much as we tried to show the difference of why this was not, some people just couldn't get past that hurdle."
And lawmakers raised policy-related questions as well.
"Certain people ... just couldn't quite get comfortable with the policy, and they had a lot of questions about, 'We don't trust the federal government, regardless of what you say,' and that was a hard hurdle to get over," he said.
And top legislative leaders were lukewarm, never fully endorsing the plan.
By his own account, Haslam spent 21 months negotiating with federal officials on what he called his "market-driven" take on Medicaid expansion. In mid-December, he won a verbal agreement from Health and Human Services Secretary Sylvia Burwell for his two-pronged plan.
One part offered workers vouchers to join employers' health plans. The other was a retooled version of TennCare with incentives to hold down health care costs.
Bad timing, big problems
Three days after gaining HHS' verbal approval, Haslam announced the agreement in a state Capitol news conference filled with business leaders but without a single top Republican leader present. The General Assembly was convening Jan. 11. Haslam eventually opted to push the plan in a special session that began last Monday.
"The unfortunate timing worked out that by the time we finally got HHS to say yes, we agree to everything you propose, then it was December," Haslam said. "By the time we got the waiver [for Medicaid rules] done, it was the first week of January."
He said his team didn't have "nearly as much time as I would have liked to, to go out in people's districts and spend time talking about it."
An even bigger problem, however, loomed with the House and Senate speakers.
House Speaker Beth Harwell, of Nashville, and Senate Speaker Ron Ramsey, of Blountville, had stood by the governor on a number of difficult legislative issues during Haslam's first term.
Ramsey called Haslam's plan a "real conservative reform" with "conservative principles" that "must be taken seriously."
Harwell was more noncommittal, saying it "appears" to be "a state-based, free market reform." But she added that her goal was "ensuring the fiscal stability of the state and protecting the taxpayers."
Neither ever actually endorsed it.
Widely seen as a possible contender to succeed Haslam in 2018, Harwell was in an especially ticklish spot. Good relations with the governor could draw support from Haslam donors and fundraisers. But her relations with some hard-right Republicans haven't been so good.
"She went into self-protection mode," observed one legislative Republican.
Dr. Bruce Oppenheimer, a Vanderbilt University political science professor, said her lack of support hurt.
"They didn't even get Harwell completely on board and she's with him, she's in [Haslam's] part of the party. You can't afford that to happen. ... At least behind the scenes she has to be doing some work for you and using what clout she has to get a couple more votes."
Harwell later told reporters she was "torn" between helping the "working poor" and the memory of problems the state had when it kick 170,000 people off TennCare rolls in 2005 to stem spending. The disenrollments triggered dismay and prompted a court battle, which the state eventually won.
Critics haven't forgotten that. And they weren't satisfied with Haslam's contention that the waiver would include an out for the state if the program wasn't working, even though Burwell even sent Haslam a signed letter saying it was so.
"I just don't think it was quite ready, and I told the governor that," Ramsey later said. "But he wanted us to vote, so we did." He noted, "You have more mistrust [with the federal government] when you have a verbal agreement."
Not enough details
After Haslam announced the plan and called the special session, lawmakers complained they didn't have details of the proposal. Senate Majority Leader Mark Norris, R-Collierville, who normally would carry the governor's legislation, refused to sponsor the resolution authorizing Haslam to proceed.
Haslam said administration officials were working furiously to put the proposed waiver into writing, but the clock ran out while lawmakers and others were still batting around questions and answers.
Some Republicans also were upset when Haslam conceded he was counting on the 26 Democrats in the 99-member House and the five in the 33-member Senate to get the resolution passed.
Interest groups coalesced on both sides, warring in radio ads and direct mail pieces.
Haslam's plan was supported by the Coalition for a Healthy Tennessee, more than 100 groups or businesses including local chambers of commerce, the Tennessee Hospital Association, Tennessee Medical Association, unions and other advocates.
Opposing it was the Tennessee chapter of Americans for Prosperity, a national group backed by billionaire conservative brothers David and Charles Koch.
The prospect of a vote that could leave them vulnerable in a GOP primary made many Republicans nervous. Many also reacted to a last-minute spending analysis by the Legislature's Fiscal Review Committee.
Haslam had said his two-year pilot project would draw down $2.8 billion in federal funds, and hospitals had agreed to cover the state's share of about $74 million. But the Fiscal Review Committee declared there would be a $7.5 million administrative cost, and that would have to be considered as part of the budget during the regular legislative session.
It was a major blow. House leaders offered to let Haslam withdraw the resolution to push later. He refused.
Sen. Bob CorkerCorker and Erlanger
To pay the state's share, hospitals would increase the rate of an existing assessment on net revenues. Critics pointed out that Tennessee's Republican U.S. senators, Bob Corker and Lamar Alexander, in 2013 introduced a deficit reduction bill that would have ruled out using such levies to attract federal matching funds.
It went nowhere, but Corker's office now wouldn't address questions about whether he might try again with Republicans in control of Congress and eager to attack the federal deficit.
State lawmakers' ire at Erlanger Health System over trustees' closed-door agreement to pay $1.7 million in bonuses to 99 managers figured in, too. Lawmakers last year worked to get the financially struggling public hospital, into a special category that allowed it to draw down more federal dollars.
Local lawmakers didn't raise the issue during the special session, but others questioned how much money from Insure Tennessee would go to executives' pockets across the state. It was "horrible," conceded a Nashville-based lobbyist.
House inaction
In the House, the resolution was handled by House Majority Leader Gerald McCormick, R-Chattanooga. It was heard by two of three committees but never brought up for a vote.
In the Senate, Ramsey created three 11-member special committees so all 33 senators could hear it.
He added three area lawmakers, all seen as opposing the bill, to the regular Senate Health Committee, while taking others that some saw as more supportive. The additions included Republican Sens. Todd Gardenhire of Chattanooga, Mike Bell of Riceville and Janice Bowling of Tullahoma.
Haslam gambled he might be able to turn Bowling and possibly Gardenhire in one-on-one conversations.
It was a sign of desperation, one lobbyist said, and it didn't work. The three area lawmakers were among the seven voting no. In fact, Bell led the charge.
Summing up all of the problems, another lobbyist called it the "anatomy of a disaster."
Haslam said he doesn't see a way to push the issue in the regular session starting Monday.
"Anyone can introduce anything at anytime," said McCormick, who's taken a lot of heat on the issue. "But I don't plan on introducing it again."
Contact staff writer Andy Sher at asher@timesfreepress.com or 615-255-0550.