Tennessee Gov. Bill Haslam has announced that he won't pursue expanding the state's Medicaid program to help cover the uninsured as part of the federal Affordable Care Act.
Haslam told a joint session of state lawmakers Wednesday that he decided not to do that because he prefers a third option to use federal money to subsidize private insurance. The federal government hasn't accepted that proposal.
Expanding TennCare, the state's Medicaid program, had been estimated to cover roughly 140,000 of Tennessee's nearly 1 million uninsured residents and bring in $1.4 billion in federal money.
Haslam is among the last of the Republican governors to declare a decision on expansion. Both the health care program and President Barack Obama are widely unpopular in the highly Republican state.
Below is the press release from Gov. Haslam, explaining his decision:
Tennessee Gov. Bill Haslam today unveiled his plan to pursue real health care reform in the state.
Haslam announced that he will not expand TennCare rolls under the Affordable Care Act but instead is working to leverage the available federal dollars to purchase private health insurance for Tennesseans who would not otherwise have access to coverage.
"Tennessee has shown the nation how to produce true reform in education, based on students' results and educational outcome. We're beginning to do the same thing with reforming government service - again by measuring outcome and results rather than just years of service as a state employee," Haslam said. "I believe Tennessee can also be a model for what true health care reform looks like; reform that will take significant steps to save the state and the nation from the unsustainable path we are on now."
Haslam's plan would take on the critical issue of aligning incentives among users, payers and providers of health care. The plan would:
• Leverage available federal dollars to purchase private health insurance for Tennesseans up to 138 percent of the federal poverty level who don't have access to health insurance, which would translate to 175,000 more insured Tennesseans;
• Allow co-pays for those who can afford to pay something;
• Include a definitive circuit-breaker or sunset of the plan that could only be renewed with the General Assembly's approval;
• And reform the payment structure for providers so they are compensated for health outcomes, not just based on services performed.
"Hospitals and medical providers have put a lot of sincere effort into working with us toward payment reform," Haslam said. "I cannot emphasize enough how much I've been impressed with our hospitals' willingness to work with us. To succeed, we also need cooperation from the Department of Health and Human Service (HHS), and we can't get the same assurances from them at this point. Until we get those assurances, I cannot recommend that we move forward on this plan.
"All we're asking from Washington is to allow us to use the federal funds to provide coverage on the health care exchange in the same way many other Tennesseans will access coverage regardless of whether or not we expand. It's a reasonable ask," Haslam continued.
But as a result of the lack of clarity from HHS, the governor will not ask the General Assembly for approval to accept the Medicaid expansion federal funds as he continues to work for the flexibility needed to implement his plan.
Statement from U.S. Senator Lamar Alexander (R-Tenn.)
"I trust Governor Haslam to do what is in the best interest of Tennesseans. I will do all I can to help the state get the flexibility he has asked for."
Statement from U.S. Congressman Phil Roe (R-Tenn.)
"I applaud the Governor's decision. Expanding a broken system would do more harm than good. The Affordable Care Act left states with a great set of challenges and I don't envy the difficult decision the governor had to make. I have a great deal of respect for Governor Haslam, and I look forward to continuing to work with him to find commonsense solutions to ensure Tennesseans have access to affordable health care."
Statement by Craig Becker, President of Tennessee Hospital Association
Tennessee hospitals are disappointed the Governor couldn't get the information he needs from CMS to move forward at this time with coverage of the expansion population.
The Governor has asked CMS to allow Tennessee to bring those who would be eligible for the Medicaid expansion into the health insurance exchange and provide them private coverage, thereby leveraging federal funding to transform healthcare in Tennessee without expanding the Medicaid rolls. Tennessee hospitals believe this is the correct approach for Tennessee.
We understand the need for clarity and we plan on working with the administration and the legislature to get the answers that will allow the state to make coverage available to the additional Tennesseans with incomes less than 138 percent of the federal poverty level.
We are hopeful we will get the necessary assurances from the federal government that will allow the Governor to pursue the vision he outlined this morning and there can be a special session of the legislature in Tennessee to take advantage of the 100 percent federal funding available this year.
Statement by State Rep. Gloria Johnson (D-Knoxville)
"A great opportunity to expand essential health coverage to 300,000 low-wage earners -- servers, store clerks, farm hands -- has been squandered because of extreme politics and a failure of leadership.
"Every Tennessean who works for a living deserves the dignity and security of being able to go the doctor when they get sick or hurt.
"The truest measure of a state is how we treat our most vulnerable citizens, and sadly, this is one more irresponsible decision in a line of many that punishes working and middle class families."