- Associated Press - Monday, December 15, 2014

NASHVILLE, Tenn. (AP) - Gov. Bill Haslam announced Monday that he has reached a deal to expand Medicaid in Tennessee after more than a year of discussions with federal officials.

The Republican’s administration touted the plan as an alternative deal with federal officials. The two-year pilot program, dubbed Insure Tennessee, would provide coverage for the state’s uninsured without creating new taxes for Tennesseans.

“Our approach is responsible and reasonable, and I truly believe that it can be a catalyst to fundamentally changing health care in Tennessee,” Haslam said.

The program offers several options of coverage for individuals below 138 percent of the federal poverty level - which works out to $16,100 for an individual and $27,300 for a family of three. Tennesseans between the ages of 21 and 64 will be offered a choice of the so-called Healthy Incentives Plan or the Volunteer Plan.

The Volunteer Plan would provide a health insurance voucher to participants to use in their employer’s health insurance plan for premiums and other out-of-pocket expenses.



Those who select the other plan may choose coverage through a redesigned component of TennCare, the state’s version of Medicaid. It would introduce Healthy Incentives for Tennesseans accounts, modeled after Health Reimbursement Accounts, which can be used to pay for a portion of required member cost-sharing.

Health care advocates had heavily criticized Haslam for refusing last year to agree to $1.4 billion in federal funds to cover about 180,000 uninsured Tennesseans under the terms the money was offered.

Michele Johnson, executive director of the Tennessee Justice Center, a leading advocate for enrollees in TennCare, lauded the governor’s plan.

“As an organization that works with and knows well the hardworking citizens of our state who cannot afford health insurance, this is an important moment,” Johnson said. “We fully support its intention to keep Tennesseans’ federal tax dollars in the state … and support Tennessee’s health care system on which we all depend.”

Tennessee would become the 28th state plus Washington, D.C., to expand Medicaid under President Barack Obama’s health care law, and the 10th initiated by a Republican governor.

Under the program, the Tennessee Hospital Association would cover any additional costs to the state. About five years ago, the association agreed to a fee assessment to help shore up TennCare after deep state budget cuts.

THA president and CEO Craig Becker said the governor’s plan “helps provide a solution to the financial challenges hospitals across Tennessee have faced for the last several years as a result of extreme cuts in healthcare reimbursement.”

“Extending healthcare coverage in Tennessee will lead to lower amounts of charity and unreimbursed care, which helps keep hospitals financially healthy and providing high quality care,” he said

Reginald Coopwood, president and CEO of Regional One Health in Memphis, Tennessee, said the governor’s plan is especially beneficial to those who may not have insurance or can’t afford it, particularly in Memphis where there’s a high poverty level.

“For us to be able to insure Tennesseans who otherwise aren’t eligible for the current Medicaid system, to expand that into a program where they can get insurance is huge for the state of Tennessee,” Coopwood said.

Haslam said the program will automatically terminate if either federal funding or support from hospitals “changes in anyway.”

The governor said he plans to call a special session for lawmakers to take up the plan early next year.

“After 17 months of hard work, we will be presenting a plan to the General Assembly next year that addresses health outcomes and costs,” Haslam said.

Haslam had been trying to get federal officials to approve an alternative plan, one that would be acceptable both to Washington and to largely skeptical Tennessee lawmakers, who must approve any deal under a law passed earlier this year. He said the GOP states that expanded Medicaid were part of the conversations with Washington.

“There’re elements that we’ve looked and learned from a multitude of states,” said TennCare Director Darin Gordon. “And you look at all those states, I’d say we’ve taken different parts that we think further our goals.”

The nine Republican-governed states that have expanded Medicaid are Arizona, Iowa, Michigan, Nevada, New Jersey, New Mexico, North Dakota, Ohio and Pennsylvania.

Last month, Wyoming, which has a Republican governor, released a plan to expand Medicaid. The proposal, which still has to win federal and state legislative approval, would provide Medicaid coverage to an additional 17,600 low-income people, according to the state’s health department.

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