Health & Human Services

Setting Limits on Medicaid

From TennCare's end to Florida's proposed new beginning, state Medicaid programs are working through difficult times.
by | March 2005
 

The name remains. Technically speaking, there is still a TennCare. But for all intents and purposes, Tennessee's decade-old, high-profile attempt at near-universal health care is dead. Governor Phil Bredesen, a former health insurance executive, is moving to dismantle the program.

Unless a federal court rules against the proposal (advocates for TennCare recipients have filed a suit), 323,000 adults will be lopped off the rolls this spring, making TennCare look more like a run-of- the-mill Medicaid program than an innovative expansion that covered 25 percent of Tennessee's population and brought Tennessee's uninsured rate down to 10.8 percent--significantly lower than the 16 percent or more in neighboring states. It also brought Tennessee to its fiscal knees, accounting for one-third of the state's budget.

Tennessee is not alone in struggling with Medicaid, but that doesn't necessarily mean its recent action is a harbinger of other state actions. "I have trouble turning TennCare's cuts into a cautionary tale," says Alan Weil, executive director of the National Academy for State Health Policy. "When I look at the lay of the land, I see states working hard to preserve and expand Medicaid during good times and limit cuts in bad times."

What is more typical is Bredesen's decision to curtail the benefits of those remaining on the rolls. Last year, two out of every five states set limits, such as the number of prescriptions that could be filled or the number of doctors visits any one patient could make. The measures were--and continue to be--an attempt to control Medicaid expenses.

Meanwhile, given the recurring debate in Washington, D.C., about block-granting Medicaid, states are keeping an eye on Florida's recent proposal. Governor Jeb Bush is urging his state to change Medicaid from a program in which the state reimburses providers directly for their services into one that is, in effect, a defined-contribution plan. That is, the state would determine who is eligible for Medicaid and what level of services they should get. The Medicaid recipient would then shop for a health plan at that level, with the state paying the premium, thus capping the state costs per patient and leaving it to health insurance companies to keep spending per Medicaid patient under control.

The plan needs the approval of the state legislature and a waiver from the federal government to go into effect. Governor Bush, a Republican, is in a good position to win such approvals since his legislature is Republican, and the plan is very much in gear with the thinking of the governor's brother, President George W. Bush.

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