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Tennessee Senate Unanimously Approves Medicaid Opt-Out Program

April 6, 2016
By Marcus Rech

The Tennessee Senate unanimously approved a resolution requesting Gov. Bill Haslam (R) to apply for a federal waiver authorizing a pilot program for individuals who want to opt out of TennCare, the state’s Medicaid program.

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The Tennessee Senate unanimously approved a resolution requesting Gov. Bill Haslam (R) to apply for a federal waiver authorizing a pilot program for individuals who want to opt out of TennCare, the state’s Medicaid program.

The TennCare Opt Out pilot program is estimated to include 17,200 males aged 21–44 who are currently eligible to receive benefits from the Temporary Assistance for Needy Families (TANF) program, a test group with medical and pharmacy costs of $58 million per year, or $281 per person per month, according to the resolution’s fiscal memo.

The resolution would shift $58 million from TennCare to the pilot program, which would spend $31 million per year on premiums for catastrophic health insurance coverage for participants. The state would disburse the remaining $27 million to participants via an electronic benefits transfer (EBT) card to cover out-of-pocket expenses, such as primary care, pharmaceuticals, or part of their insurance plan’s $6,350 deductible. At the end of the year, plan participants would receive the unused balance of their EBT card funds as a cash disbursement.

Incentive to Save

Sponsored by state Sen. Mark Green (R-Clarksville), the resolution states the “infusion of free-market practice” will benefit participants and the TennCare program.

“Since any unused balance of funds available to cover out-of-pocket expenses would be disbursed to pilot program enrollees at the end of a year, such enrollees will have a direct monetary incentive to seek the best price and value for needed healthcare services, or to elect not to receive healthcare services that they are currently seeking,” the fiscal memo said.

Lindsay Boyd, director of policy at the Beacon Center of Tennessee, says TennCare recipients would benefit from the greater flexibility offered by the waiver.

“Although we have not been directly involved in the efforts to pass SJR 88, we are supportive of efforts like Sen. Green’s that provide greater flexibility at the state level to address prevailing issues within the TennCare program,” Boyd said.

An Alternative to ACA

State Sen. Kerry Roberts (R-Dickson) says the state lawmakers’ willingness to enact free-market health care reforms is consistent with their longstanding opposition to Medicaid expansion under the Affordable Care Act.

“Most of our Republican General Assembly members campaigned against Obamacare and Medicaid expansion,” Roberts said. “However, [Haslam’s] popularity led many Republicans throughout the state to embrace the plan. Ironically, many of those same people—if asked if they supported Medicaid expansion—respond with a resounding ‘no.’ So I suppose much of that support was for the governor and not for the program.”

Lawmakers rejected Haslam’s proposed Medicaid expansion plan in 2015. The Senate approved the TennCare Opt Out program resolution 32–0 on February 22, 2016. The House of Representatives Insurance and Banking Subcommittee favorably reported on the bill March 23.

Haslam must sign or veto legislation within 10 days of receipt, excluding Sundays, or it becomes law without his signature. Tennessee’s current legislative session ended April 15, as this issue of Health Care News was in press.

Marcus Rech (mr308512@ohio.edu) writes from Centerville, Ohio. Dustin Siggins contributed to this report.

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