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.