On Medicaid Expansion

There are many pressing issues of the day… far too many. One that stands at or near the top of our Roundtable’s list of concerns is the adoption of Medicaid Expansion in Tennessee. Toward this end, we will be working closely with the Tennessee Justice Center, which will reach out to us when it needs assistance from our Roundtable membership. TJC will be working in the 2018 election cycle to help support Medicaid Expansion. When TJC alerts us of its needs, we will be sure to reach out to you in turn. Below is some information that will help you better understand why we all need to work hard, before and during Tennessee Legislative session, to do what we can to support Medicaid Expansion in Tennessee.

The Tennessee Legislature passed a law in 2014 that bars the Governor from accepting federal funds to expand Medicaid coverage to uninsured working families. It’s time to repeal that law and put Tennesseans’ own federal tax dollars to good use. An April 2018 poll shows that Tennessee registered voters favor Medicaid expansion by three to one.

The following is the introduction given by John Seigenthaler, Jr. at a recent forum sponsored by the Tennessean and organized by the Tennessee Justice Center. We thought it represents a good overview of the position we are in:

For fifty years, Medicaid has been America’s safety net. Known as TennCare in our state, it provides prenatal and delivery care for over half of all infants born in Tennessee. TennCare covers half of all Tennessee children and nearly two thirds of frail seniors in nursing homes. Medicaid is the nation’s largest source of coverage for the treatment of mental illness and addiction and the principal insurer for children and adults with severe disabilities. In rural areas of Tennessee, TennCare is the largest source of health coverage, and it is a vital source of funding for the health care infrastructure in every community in the state.

But the Medicaid safety net has holes. TennCare only covers children and their parents, pregnant mothers, people with severe disabilities and seniors over 65. Even if you are very poor, unless you are in one of those categories, you cannot qualify.

That leaves hundreds of thousands of low income Tennesseans, including tens of thousands of veterans, uninsured. Most are working at low-wage jobs that do not offer insurance. Many are approaching retirement age, have serious health problems, but can’t yet qualify for Medicare. It’s a serious problem for those affected, and for the communities in which they live.

In 2010, when Congress passed the Affordable Care Act, it sought to mend the Medicaid safety net by doing away with the requirement that a person fit into one of those specific demographic categories. The law directed states to expand coverage to all residents with incomes up to 138% of the federal poverty level, which works out to about $16,500 a year for a single person, or about $22,600 for a couple. The expansion was to take effect in January 2014. The law provided that the federal government would cover 100% of the cost in 2014 and 2015, and that percentage would gradually decline to 90% federal funding in 2020 and all years after that.

In 2012, however, the U.S. Supreme Court ruled that Congress could not require states to expand their Medicaid programs, effectively giving each state the choice whether or not to expand.

In 2014, then-Representative Jeremy Durham sponsored a bill that the Tennessee legislature passed which prohibited the Governor from accepting the Federal funds and expanding Medicaid without the Legislature’s prior approval. In 2015, Governor Bill Haslam asked the Legislature to approve his” Insure Tennessee” plan, which would use the Federal Medicaid expansion funds allocated to Tennessee to extend coverage to low-wage uninsured Tennesseans. The plan had a number of conservative features that distinguished it from regular Medicaid. The Hospital Industry agreed to pay the state’s share, which will rise to 10% by 2020, through an increase in a State assessment that hospitals already pay. The combination of Federal and Hospital Industry funding meant that the Governor’s proposal would have cost state taxpayers nothing. Nonetheless, the Legislature refused to approve it, and Tennessee remains one of only 18 states that still refuse to use their federal Medicaid allocation to cover their uninsured residents.

The remaining 32 states and the District of Columbia have put their Medicaid expansion allocations to use. Most states have simply expanded Medicaid eligibility, but some have designed their own more conservative coverage programs, along the lines proposed by Governor Haslam in 2015.

In effect, the States’ decisions whether to accept Federal funding to expand coverage has created two countries within the United States: one comprised of states that put the Federal funding to work covering the working poor and funding their health care economies, and another country (including Tennessee) which has not done so yet. That has created what researchers call a “natural experiment”. After four years, there is enough data to compare these two groups of States and assess the impact of States’ decisions on health access, health status, state and local health resources, health care costs, jobs and the economy, and state and local government budgets.

This is not just an academic concern. Polling tells us that health care and health costs are among the issues of greatest concern to Tennessee voters. The decision whether to accept the Federal funds cuts across other important issues as well, such as jobs, the economy, the opioid epidemic and the challenges facing rural communities.

What follows are some basic facts provided to us by the Bring it Home Campaign, a non-partisan effort by organizations and individuals to educate Tennesseans and policy makers about the need to make full use of federal Medicaid funding to address Tennessee’s pressing health care needs, something our Roundtable heartily supports. The State law preventing Tennessee from using the Federal funds has been costly in numerous ways. Repeal of the law is urgently needed for the following reasons:

  • By the Legislature’s own estimate, Tennessee has lost – and continues to lose – $1.4 billion annually ($3.8 million/day) in federal health care funding. These are Tennesseans federal tax dollars that are being sent to Washington rather than being used here at home. 

  • That money would have generated 15,000 jobs, according to the University of Tennessee’s Center for Business and Economic Research.
  • That funding could sustain Tennessee’s hard-pressed hospitals. Though many hospitals are profitable, safety net facilities are in trouble. This includes Nashville General Hospital and more than two-dozen rural hospitals that are losing money and are in danger of closing. Tennessee has lost eight hospitals since 2010, and has lost more hospitals for its size than any other state. A national study of states that accept the Federal health funds shows that our Legislature’s bar on the use of those funds makes it six times more likely that a Tennessee hospital will be forced to close. The closing of a community’s only hospital reduces access to care for everyone in that community means the loss of a major employer, and makes it impossible to recruit new businesses to the area. 

  • The Federal funding would support services to prevent and treat opiate addiction, which has reached crisis proportions across the State. In 2016, a Legislative task force recommended changing the law to allow use of the Federal funds to cover uninsured Tennesseans with mental health and addiction problems, but the Legislature never acted on the recommendation.
  • The failure to use Federal health funds makes health insurance premiums more costly for everyone.
  • The Federal health funding would provide health insurance to 280,000 working Tennesseans, affording them the financial security and access to affordable health care that is only available to those with coverage. 

It is difficult to understand, given this information, why our Tennessee Legislature continues to oppose Medicaid Expansion. In the months ahead our Roundtable will assist the Tennessee Justice Center and others in helping change the view of Tennessee Legislature. We will keep you informed of calls to action and other steps we can take to assist in this process.