Gov. Bill Haslam announces his proposal to expand Medicaid in Tennessee during a news conference at the state Capitol in Nashville on Monday. The Republican governor said he will call the state Legislature into special session to take up the proposal that would make Tennessee the 28th state plus Washington, D.C., to expand Medicaid under President Barack Obama's health care law.NASHVILLE -- Tennesseans who make too much to qualify for Medicaid and too little to afford their own health insurance could be eligible for a new health-coverage plan proposed by Gov. Bill Haslam, if the state Legislature approves it in early 2015.
The governor on Monday unveiled the alternative approach to Medicaid expansion that he negotiated with President Obama's administration: a two-year pilot program he's calling Insure Tennessee that could include up to 200,000 low-income working Tennesseans now without health insurance.
At the end of two years, state officials would evaluate its performance and costs and decide whether to seek an extension from the federal government, which will pay most of its costs.
Haslam and federal health officials agreed on the plan Friday, he said, after nearly two years of off-and-on discussions. It now goes to a special session of the General Assembly that the governor plans to call soon after lawmakers convene for their regular session Jan. 13.
The plan is an alternative to the straight expansion of Medicaid provided under the Affordable Care Act. The governor and conservatives in the legislature opposed that Medicaid expansion on the grounds that the state couldn't control its costs.
The hybrid plan allows for co-payments and "personal responsibility" components, such as disincentives for smoking, common with employer-sponsored health insurance.
Plan at a glance
• What: “Insure Tennessee” is a two-year pilot program for expanding Medicaid coverage using federal dollars. Haslam says the program is designed to “reward healthy behaviors,” and “incentivize choosing preventative and routine care instead of unnecessary use of emergency rooms.” • Two tracks: The Tennessee plan has two tracks for people earning up to 138 percent of the federal poverty level ($16,100 for an individual and $27,300 for a family of three). The two tracks are called the “Volunteer Plan” and the “Healthy Incentives Plan.” • The Volunteer Plan: Provides a fixed voucher to participants, which they could put toward paying for premiums and other out-of-pocket costs for employer-provided health plans on the private market. All costs that go over the voucher amount will become the responsibility of the participant. The Healthy Incentives Plan: Would introduce a cost-sharing model similar to Health Reimbursement Accounts, called “Healthy Incentives for Tennesseans” or “HIT” accounts. The model will allow TennCare members to “earn” contributions into their HIT accounts by “performing healthy behaviors and utilizing the health care system appropriately.” • Premiums and co-pays: Newly-eligible TennCare members earning above the poverty level will still be required to pay premiums and co-pays for these plans. No details were available. All enrollees, including those with incomes below poverty, will have “modest” pharmacy co-pays. • No new taxes: The program will not create any new taxes for Tennesseans and will not add any state cost to the budget. Compiled by staff writer Kate Harrison Belz BY THE NUMBERS• 200,000+ — The number of people who could become covered through Insure Tennessee. Approximately 142,000 Tennesseans could be eligible for coverage under the original Medicaid expansion rules set up by the federal government, the Kaiser Family Foundation has reported. 56 percent — Of Tennesseans support expanding Medicaid for low-income residents, according to a Vanderbilt University poll released last month. $22.5 billion — How much Tennessee stands to lose between 2013 and 2022 by not expanding Medicaid, according to an August report by the Robert Wood Johnson Foundation. • 9 — Number of Republican governors who have expanded Medicaid so far. Georgia Gov. Nathan Deal remains opposed to expanding Medicaid, while Alabama Gov. Robert Bentley has recently said he is open to a state-specific expansion plan. • 1 ½ years — How long Haslam has been negotiating with the Centers for Medicare and Medicaid Services to find a compromise for Medicaid expansion.WHAT’S NEXTThe governor plans to call a special session for legislators to debate the proposal after the 109th General Assembly convenes in January. The plan would need to be approved by the Tennessee General Assembly and receive formal approval from federal officials at the Center for Medicare and Medicaid Services before implementation.
Under the ACA, the federal government will fully fund the expanded coverage through 2016, then phase down its share of the costs to 90 percent by 2020. Tennessee missed at least a full year of funding by failing to enact an expansion program ready for the start of 2014. The Tennessee Hospital Association has agreed to fund anything that the federal government doesn't during the two-year period, with money from an assessment that hospitals have been paying for nearly 10 years to help offset the state's share of the costs of Medicaid.
"We made the decision in Tennessee nearly two years ago not to expand traditional Medicaid," Haslam said during an announcement at the state Capitol attended by hospital executives from across the state.
"This is an alternative approach that forges a different path and is a unique Tennessee solution. This plan leverages federal dollars to provide health care coverage to more Tennesseans, to give people a choice in their coverage, and to address the cost of health care, better health outcomes and personal responsibility."
Haslam's plan seemed to gain favor with some conservatives, as well as with advocates who had called for Medicaid expansion a year ago, The Associated Press reported.
"When a state has an opportunity to take power away from the federal government and institute real conservative reform, that is an opportunity that must be taken seriously," said Senate Speaker Ron Ramsey, R-Blountville. "Governor Haslam has negotiated a deal which returns tax dollars back to Tennessee while using conservative principles to bring health insurance to more Tennesseans."
Michele Johnson, executive director of the Tennessee Justice Center, a leading advocate for enrollees in TennCare, lauded the governor's plan.
"We fully support its intention to keep Tennesseans' federal tax dollars in the state, cover working families and give them financial peace of mind, and support Tennessee's health care system on which we all depend," Johnson said. "Helping Tennessee families and supporting our health care system is something we all need to get behind."
Yet still others remained critical, according to the AP.
"The governor's plan is too little, too late," state Democratic Party Chairman Roy Herron said. "Years of Republican delay have cost Tennesseans at least $870 million, thousands of jobs, and has even cost thousands of Tennesseans their very lives. But now that the governor has received major concessions, legislators should end the stalling and suffering, delay and death."
Justin Owen, president and CEO of the Beacon Center, a conservative research institution, was critical as well, but for a different reason.
"Medicaid expansion is both unaffordable and immoral," he said. "We will actively work with our state lawmakers to soundly reject this proposal and instead pursue meaningful alternatives that put the quality of life for Tennesseans first."
Tennessee would become the 28th state plus Washington, D.C., to expand Medicaid under President Barack Obama's health care law, and the 10th in which expansion comes under a Republican governor.
If approved by the legislature, the plan would make coverage available to adults (most children from low-income families are covered under Medicaid) with household income under 138 percent of federal poverty level. For 2014, that was $16,105 for an individual, $21,707 for a couple, $27,310 for a family of three, $32,913 for four, and so on up to $55,324 for a family of eight.
The plan is intended to extend coverage to working people whose incomes fall just above the low levels that make them eligible for traditional Medicaid (poverty level), but who do not earn enough to afford insurance premiums. The ACA provides subsidies to people with incomes up to four times the poverty level to help them buy private health insurance on the marketplace.
Those between 21 and 64 years old whose incomes make them eligible would have a choice between a "Healthy Incentives Plan," a Medicaid alternative plan with premiums and co-pays, or the "Volunteer Plan," which provides vouchers to help pay for private health insurance, including the premiums on their employer's insurance plan and other out-of-pocket expenses.
Reaction to Republican Gov. Bill Haslam’s proposal to expand Medicaid in Tennessee:
“Governor Haslam deserves credit for insisting upon a Tennessee plan that the state can afford, and Secretary Burwell deserves credit for being flexible enough to allow the governor to achieve that.” — U.S. Sen. Lamar Alexander, R-Tenn.
“I’m glad the administration has finally allowed appropriate flexibility, and I’m pleased our state was able to adopt a solution that will build off of the innovative ways we deliver quality health care.”
“Good things happen at Christmas time, and I think this is really good news. Now, we start having good conversations with the Legislature to try to get it done.” — House Minority Leader Craig Fitzhugh, D-Ripley
“For the past two years, (the Tennessee Hospital Association’s) number one priority has been securing Medicaid expansion in our state and today marks the beginning of this goal becoming a reality.” — Craig Becker, president of the Tennessee Hospital Association
“Gov. Haslam’s announcement is a step in the right direction. Expanding health insurance to more Tennesseans is the right thing to do for patients, hospitals and businesses.” — U.S. Rep. Jim Cooper, D-Tenn.
“I am reading through the governor’s proposal now. But I will say I am extremely apprehensive of any plan that relies on federal taxpayer dollars derived from ObamaCare.” — U.S. Rep. Scott DesJarlais, R-4th Congressional District
The Associated Press contributed to this story.