In a move that could mean health coverage for thousands of Tennesseans, Gov. Bill Haslam said Thursday that the state may soon submit a proposal to Washington to expand Tennessee's Medicaid program but did not release any new details on how it might work.
This would be the first time for the governor to actually submit a plan. If approved by federal officials and the state legislature, the plan would help Tennesseans caught in the coverage gap of the Affordable Care Act, which has left 162,000 Tennesseans without health insurance, according to the Kaiser Family Foundation.
In March 2013, Haslam ruled out expansion of a traditional Medicaid model and said he favored a plan to leverage federal funds to, instead, help the poor buy private health insurance. Haslam said then that a "Tennessee Plan" should require copayments, which traditional Medicaid does not, so people would have "some skin in the game."
Until Thursday, there had been no public statements by the governor about any progress.
"I think we'll probably go to them sometime this fall with a plan … that we think makes sense for Tennessee," Haslam told reporters Thursday.
The governor said he wants to do what "works financially for the state long term." He said he talked to U.S. Health and Human Services Secretary Sylvia Mathews Burwell by phone this week and hopes to talk to her in person in Washington as soon as a meeting can be arranged.
Other states, including Arkansas and most recently Pennsylvania, have gotten federal approval for expansion plans that devised new methods for Medicaid coverage. But the governor's hardest sale may be to his Republican-controlled legislature, which this year passed a law giving it final say on Medicaid expansion.
Craig Becker, president of the Tennessee Hospital Association, had finished a meeting where Medicaid expansion had been discussed with Erlanger Health System officials in Chattanooga when he learned the news.
"That's the first I've heard of it," Becker said. "We're very pleased if it's true. We are very anxious to see what the plan is and see if we can help him to get it approved."
Haslam made the comments to reporters after the state chapter of the NAACP and other advocates for health care staged an event urging the governor to act. About 50 protesters gathered on the War Memorial Plaza across the street from the state Capitol.
Haslam met with former Health and Human Services Secretary Kathleen Sebelius twice during a visit to Washington in February and ended up asking her to make a counterproposal to Tennessee's call for using the federal money to subsidize private insurance and promote healthier lifestyles through a series of incentives.
"I think he has had coversations with federal officials about what they would and would not accept," Becker said. "I heard from CMS (Centers for Medicare & Medicaid Services) that they wanted him to submit something so they could react to it."
Peggy Rowland, a retiree who volunteers at NorthCrest Medical Center in Springfield, welcomed the news from the governor.
"I do think it is important for the rural hospitals to be able to be reimbursed when they help those that are needy for the simple reason that financially hospitals cannot run without any help," Rowland said.
The federal government will pick up 100 percent of the cost through 2016 of insuring people newly eligible for Medicaid in states that expand their programs. It then phases down the federal match to a permanent 90 percent in 2020.
The money is authorized through the Affordable Care Act — a law that would have basically forced states to expand their Medicaid programs or face huge losses in federal funding, but the U.S. Supreme Court struck down that provision.
Larry Drain of East Tennessee, who has had to live apart from his wife so she can get health coverage — a situation that the couple could have avoided had Tennessee expanded Medicaid — said he has written 95 letters to Haslam uring him act but so far has not gotten a response.
"If it is for true and for real, I am exhilarated," Drain said. "I would like to know some specifics and how it came to be. Is it more than just talk?"
Medicaid expansion would bring coverage to people who make too little to qualify for tax credits, federal subsidies to help them buy coverage on healthcare.gov.
Michele Johnson, executive director of the Tennessee Justice Center, said she hopes action follows the latest comments from Haslam.
"It's urgent that the governor submit a serious plan to accept federal funds to expand health coverage for Tennesseans," Johnson said. "The consequences of delay are devastating for both the health-care infrastructure we all reply upon and for hard-working Tennesseans.
"As we wait for a plan, Tennesseans lose $2.7 million a day. We can't get that back. Meanwhile, other governors of both parties have implemented plans that strengthen their states and give their citizens the peace of mind only health coverage can provide."
Pennsylvania on Thursday became the 27th state to expand its Medicaid program. Republican Gov. Tom Corbett's administration and the U.S. Department of Health and Human Services agreed to a plan that lets private insurers administer Medicaid-funded coverage that adheres to Medicaid's existing rules.
Who may qualify
If Tennessee expands Medicaid, people at these income levels may qualify.
One-person household: Income below $16,105
Two-person household: Income below $21,707
Family of three: Income below $27,310
Family of four: Income below $32,913
— Current HHS guidelines