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Talks continue between Gov. Bill Haslam's staff and federal officials about how Tennessee can receive Medicaid expansion money, but time is running out for the state to get the full benefit.

Tennessee began losing out on $6.1 million a day on Jan. 1, when the federal government began picking up all the cost for covering people who newly qualify for Medicaid under expanded guidelines — an offer that goes away at the end of 2016.

Accepting the federal offer would provide health insurance to an estimated 161,560 Tennesseans, who account for 24 percent of the uninsured adults in this state, according to Kaiser Health News.

But some Tennessee lawmakers believe taking the federal dollars would eventually cost the state more than it can afford. Tennessee and 23 other states have not expanded Medicaid, a linchpin of the Affordable Care Act, after the U.S. Supreme Court struck down a provision that would have effectively forced them to expand their state programs by cutting off Medicaid funding to those that refused.

Tennessee has missed out on the first year for 100 percent federal funding, and it has already approved a Medicaid plan for the second year that makes no provisions for expansion. One state senator who is leaving the legislature said chances are slim of any deal being reached before the full funding offer ends. He said the past year has been one of missed opportunity.

"There is just this roaring silence of nothing happening," said Sen. Lowe Finney, D-Jackson.

But discussions continue between the Haslam administration and federal officials, saidTennCare Director Darin Gordon, who oversees Tennessee's Medicaid program.

Stumbling block

The primary hurdle is the refusal of the U.S. Department of Health and Human Services to consider rules proposed by Tennessee that would discourage recipients from overusing benefits and driving up costs, he said. Sylvia Mathews Burwell, nominated to replace Secretary Kathleen Sebelius at the federal agency, could get the Tennessee Plan simmering if she looks more favorably upon those proposals.

These types of rules have become almost standard in commercial health plans, Gordon said.

"I had to have my physical yesterday," he said. "If I didn't ... then next year my co-pays and my premiums go up. We are seeing that become more and more common across the country. Medicaid, though, has been late to the table with that."

The Tennessee Plan is similar to a federally approved expansion in Arkansas that directs federal Medicaid expansion money to private health plans. But Haslam initially proposed a plan for Tennessee that would last only as long as the federal government picked up the entire cost of expansion.

"This arrangement will have a clear circuit breaker or sunset," Haslam wrote in a letter to Sebelius a year ago. "It will end after the three-year period in which the 100 percent federal matching dollars are available."

Other states enacted sunsets if the federal match ever goes below 90 percent for newly eligible Medicaid enrollees, said John Graves, a professor and health policy expert at Vanderbilt University. A circuit breaker gives states more certainty about their cost share and pressures the federal government to keep its commitment, Graves said.

However, any plan in Tennessee does not hinge on three years that the federal government picks up the full cost of Medicaid expansion, Gordon said.

"The ultimate goal here is making sure whatever we are designing is sustainable long term," Gordon said.

Finney is not hopeful of any breakthrough this year.

"The problem is it's an election year," he said. "You don't really know what's going to happen on issues like this in an election year."

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