Haslam weighs Medicaid expansion as political opposition continues to mount

Thursday, March 21, 2013 at 10:05pm
032513 Medicaid expansion graphic topper.jpg
(Source: The Advisory Board, as of 3/13/13)


Gov. Bill Haslam gave himself a deadline.

Instead of further dragging out the conversation about whether to expand the state’s Medicaid program for low-income people by months or even years, Haslam is expect to decide by the end of the month what direction he wants to take.

Whether his decision is something the General Assembly will agree with is another story.

When the Patient Protection and Affordable Care Act was signed into law, states were told they would have to grow their Medicaid programs. (Tennessee’s is known as TennCare.) At that time, then-Gov. Phil Bredesen coined one of the most memorable phrases of his eight-year tenure, calling it the “mother of all unfunded mandates.”

Last summer, the U.S. Supreme Court ruled the feds could not force states into expanding their programs. With the expansion now optional, a slew of states have debated whether or not to grow their programs. To date, 14 governors have refused to expand their health care programs; 25 governors have opted to expand anyway; and the rest are undecided.

Nine months later, Tennessee is still in the last camp.

“Anybody who thinks this is a no-brainer decision either way, I don’t think has really done the work on it,” Haslam said, adding he was still researching the state’s options.

Recent polls show Tennesseans are fairly split about expanding TennCare. A fall survey from Vanderbilt University showed respondents in a statistical dead heat, with 47 percent wanting to expand Medicaid and 46 percent wanting to keep it as is. A poll by the Tennessee Hospital Association — which is rooting for the state to expand Medicaid — shows some 59 percent are in favor of the expansion.

Expanding Medicaid boils down to opening up restrictions on who could enroll in TennCare. Currently, the health coverage is largely limited to low-income children, pregnant women, the elderly and the disabled. Roughly 1.2 million people are now on the state’s TennCare rolls.

Expanding the program would make more people eligible, such as those under 65 years old who are not pregnant or disabled but have an income of less than 138 percent of the federal poverty level, or about $32,000 for a family of four.

The move, according to the General Assembly’s Fiscal Review Committee, amounts to adding about 144,500 people to the TennCare rolls next year and 161,900 the year after.

The cost to Tennessee is free for the first three years if the state agrees to expand. That means taxpayers — through the federal government — would chip in some $418 million next year to cover the additional people using TennCare, and $1 billion the year after, according to the Fiscal Review Committee. But once 2017 hits, the federal government’s funding will wind down to eventually settle at covering 90 percent in 2020.

Although the expansion spares Tennessee the cost in the outset, the cumulative cost amounts to about $200 million by 2019, TennCare officials say. That price tag, plus uncertainty over whether the financially strapped federal government can keep its word, and an aversion to participating in any optional part of the so-called Obamacare program, is giving lots of Republican lawmakers reason to oppose the expansion completely.

Without the expansion, some 90,000 people who work at hospitals will lose their jobs, according to the Tennessee Hospital Association, which suggests a handful of rural hospitals would eventually have to close.

“That’s only a piece of the pie,” said Sen. Lowe Finney, the Democratic Caucus chairman who is urging for an expansion. “I think there’s definitely a moral argument for our state to try to do this.”

“If we don’t, then we’re going to spend our time looking at other states that are going to spend our tax dollars who are then going to have healthier populations. I think the jobs go to healthier populations in the long run, and that’s bad for our overall economy for years to come. I guess in that sense, if we don’t do it, the moral argument to do it certainly has an economic positive benefit going forward.”

A band of Republican lawmakers have been chomping at the bit to stamp out any possibility of expanding Medicaid. The first bill filed this session was aimed at making it illegal to expand Tennessee’s program under the federal health care reform, and similar efforts on Capitol Hill are following suit.

This week, Haslam’s office sent letters to lawmakers sponsoring those bills to red-light their efforts, citing “philosophical reasons.” He issued the same form letter to sponsors of a bill by Democrats, including Finney, to require the state expand the Medicaid program.

Leaders in the General Assembly have generally agreed with slowing down bills focused on forcing the governor’s hand, and have appeared to soften their stiff resistance to a Medicaid expansion.

In exploring his options, Haslam told reporters earlier this month he was curious about a compromise struck between Arkansas’ governor and the Obama administration. Under the agreement, the state could take the money the federal government forwards for a Medicaid expansion and sink it into the private sector for low-income people to buy insurance from the newly formed health insurance exchanges.

The state’s commissioner of the TennCare Bureau told a Senate committee he was trying to find out more about the Arkansas agreement, but didn’t tip his hand as to whether it was an option the state was seriously considering.

“That’s a moving target,” the bureau’s deputy commissioner, Darin Gordon, said this week, explaining he is trying to figure out the details of the arrangement.

Unless the governor decides to all-out reject the expansion, he will face an uphill battle convincing lawmakers to go along with him. Republicans in the General Assembly hold supermajorities, which includes camps that say they are flatly opposed to expanding the program.

In Florida, the conservative Republican Gov. Rick Scott tried to convince his General Assembly to go along with a Medicaid expansion, under the idea that the expansion would be rolled back in three years after the federal government stops paying 100 percent of the tab. The measure failed to gain support in the Republican-led legislature there, but lawmakers there are now mulling an Arkansas-style arrangement.

While Haslam wouldn’t rule a three-year plan out, he said he worried it would lead to a situation reminiscent of when then-Gov. Bredesen shed 170,000 people from the TennCare rolls eight years ago.

House Speaker Beth Harwell said her members are “gun-shy” about possibly reliving a similar scenario three years after adding thousands of people to the rolls. But she said there probably is a way to convince some of her rank-and-file to go along with a temporary expansion, but didn’t know whether that would be enough.

“It’s a matter of, do we take that quick fix now, with the clear understanding three years from now we’re going to phase everybody back off, or not? And that’s a tough call,” she said.

9 Comments on this post:

By: pswindle on 3/22/13 at 11:17

Gov. it is your job to help care for the people of TN. Why would you not want Tennesseans to have good healthcare? I bet , if a republican passed this healthcare bill, you would be all for it. It will be more expensive if you do not take Obamacare. How much does it cost to go to the ER?

By: Ask01 on 3/24/13 at 8:14

This is actually a case of mind over matter.

The politicians don't mind and we don't matter.

I believe pswindle is correct. If a white Republican had authored this legislation, Haslam and his ilk would have embraced without question the program. Of course, if they embraced the bill, that would indicate the program was going to benefit them and their corporate patrons at the expense of the poor and middle class.

We all know how this will end.

Governor Haslam will either wet his finger to check which way the wind is blowing before making a decision, or procrastinate until the issue is moot, allowing the default option to take over.

Spinelessness is great for a jellyfish, but not so desirable a quality for a governor.

By: Rasputin72 on 3/25/13 at 7:04

As one can clearly see from the comments thus far the growing birthrate of underclass Americans is showing itself in the form of. "I want financial support."

By: BigPapa on 3/25/13 at 11:10

You guys are only looking at this from your feelings and not from sound reasoning. The worry is that they will expand, then the Fed will pull the $$ out from under them leaving them the choice to have a massive (and I mean MASSIVE) tax increase for the state, or go back and dis-enroll people- again.

We been there before and it's not a good place to be.

By: Novel_Concepts on 3/25/13 at 12:04

So without expansion, 90,000 people will lose their jobs? That sounds far-fetched to me. I also noticed that the Hospital Association is in favor, I wonder why?

What ever happened to people aspiring, and actually doing things to better their situation....That little thing called the 'Merican Dream... I had a job that didn't provide healthcare, but guess what, I found a job that did. I did things to make myself marketable and put myself in a position to have the things I needed in life by sacraficing and determination. This medicaid expansion has "tax increase" written all over it, maybe not now, but after the federal government stops paying the tab or maybe prior to. And to boot, we will have 150, 000 people depending on governmental assistance. I'm not insenstive, just logical and once you start giving someone something, they expect it. You don't believe me, start feeding stray cats in your neighborhood and see what happens.

By: grid on 3/26/13 at 8:37

I, too, am concerned that expanding Medicaid will cause a tax increase. I agree with the reasoning of BigPapa & Novel_Concepts, so I won't repeat their arguments.

But, as pswindle says, going to the ER is expensive, too. This is a conundrum, no doubt. I wish more people would take responsibility for their health & well-being; then perhaps healthcare would be cheaper.

My father used to say "Personal responsibility went out of style in the 60s." I swear, the older I get, the more I believe that's true.

By: i.am.a.taxpayer on 3/27/13 at 7:36

Many of the people commenting against expanding Medicaid already have their own health insurance. So do I, except that I recognize that there are many poor people who do not have health insurance or health care they need. Health is a basic, and we need to support it for everyone.

We spend tax money on a ridiculous range of other things, so why not something so basic for people who need it so much?

By: think on 3/27/13 at 9:11

This seems like an old fashioned bait and switch. One thing people need to keep in mind is Tennessee is a low-tax state. The total state budget is about $31 billion a year. That is less than 1% of the federal budget, and only about 3% of Federal healthcare spending. The Feds pulling funding back doesn't mean much to them, but it could cripple the state budget.

Historically, the Feds have used programs like this to basically strong arm states into doing what they want. Go look up how the feds manipulated road funding in Louisiana over the drinking age battle, or how military bases have been "strategically closed". When the constitution doesn't allow the Feds to do something, they simple force the states to do what they want through monetary pressure.

The more funding you take from them, the more you are required to do what they want you to. It is the equivalent of taking money from your in-laws... sure, it will allow you to live a bit beyond your current means, but there is always a price to pay in the end.

By: grid on 3/27/13 at 12:31

Good point, think. Nothing is free...there is always some cost involved; whether immediate or long-term.