Tennessee’s one-of-a-kind TennCare Medicaid waiver program crossed over $1 billion in savings, TennCare Director Stephen Smith told state officials during the agency’s budget hearing Thursday.
The program, referred to as “shared-savings,” is a Medicaid waiver that allows the state to access about half of the money it saves from its federal allocation to pay for insurance coverage for the state’s poorest residents.
Tennessee is the only state to receive such a waiver. The state applied for the program in 2021, despite concerns that the only way to save money was to remove people from TennCare or reduce services.
About 1.4 million Tennesseans, or 20%, are enrolled in TennCare, of which over 800,000 are children. As recently as 2023, over 1.7 million were enrolled in TennCare, but the agency purged about 300,000 after the expiration of the rules that had prevented it from doing so during the COVID-19 pandemic.
Tennessee is still one of the handful of states that haven’t expanded Medicaid eligibility under the Affordable Care Act, which could have helped hundreds of thousands of Tennesseans access more affordable insurance.
This year, TennCare can tap about $345 million in “shared savings,” which it plans to spend. In the past, the “shared savings” cash has been used to invest in rural healthcare programs, pregnant women and children and to provide $100 million in disaster loans after Hurricane Helene.
The state is using $5 million from the fund to support food banks, after President Donald Trump’s administration refused to fund the Supplemental Nutrition Assistance Program (SNAP) in November during the federal government shutdown.
Overall, TennCare requested a $750 million budget increase, mostly from federal funds, in line with its requests over the past few years, attributed to annual increases in medical costs.
Read more at TennesseeLookout.com.