Tennesseans who make too much to qualify for Medicaid and too little to afford their own health insurance could be eligible for a new health-coverage plan proposed by Gov. Bill Haslam, if the state legislature approves it in early 2015.
The governor on Monday unveiled the alternative approach to Medicaid expansion that he negotiated with President Obama's administration: a two-year pilot program he's calling Insure Tennessee that could include up to 200,000 low-income working Tennesseans currently without health insurance.
At the end of two years, state officials would evaluate its performance and costs and decide whether to seek an extension from the federal government, which will pay most of its costs.
Haslam and federal health officials agreed on the plan Friday, he said, after nearly two years of off-and-on discussions. It now goes to a special session of the state legislature the governor plans to call soon after lawmakers convene for their regular session Jan. 13.
The plan is an alternative to the straight expansion of Medicaid provided under the Affordable Care Act, or Obamacare. The governor and conservatives in the legislature opposed that Medicaid expansion on the grounds that the state couldn't control its costs.
The hybrid plan allows for co-pays and "personal responsibility" components, such as disincentives for smoking, common with employer-sponsored health insurance.
Under the ACA, the federal government will fully fund the expanded coverage through 2016, then phase down its share of the costs to 90 percent by 2020. Tennessee missed at least a full year of funding by failing to enact an expansion program ready for the start of 2014. The Tennessee Hospital Association has agreed to fund anything that the federal government doesn't during the two-year period, with money from an assessment that hospitals have been paying for nearly 10 years to help offset the state's share of the costs of Medicaid.
"We made the decision in Tennessee nearly two years ago not to expand traditional Medicaid," Haslam said during an announcement at the state Capitol attended by hospital executives from across the state, as well as the Rev. David Choby, bishop of the Catholic Diocese of Nashville.
"This is an alternative approach that forges a different path and is a unique Tennessee solution. This plan leverages federal dollars to provide health care coverage to more Tennesseans, to give people a choice in their coverage, and to address the cost of health care, better health outcomes and personal responsibility."
If approved by the legislature, the plan would make coverage available to adults (most children from low-income families are covered under Medicaid) with household income under 138 percent of federal poverty level. For 2014, that was $16,105 for an individual, $21,707 for a couple, $27,310 for a family of three, $32,913 for four, and so on up to $55,324 for a family of eight.
The plan is intended to extend coverage to working people whose incomes fall just above the low levels that make them eligible for traditional Medicaid (poverty level), but who do not earn enough to afford insurance premiums. The ACA provides subsidies to people with incomes up to four times the poverty level to help them buy private health insurance on the marketplace.
Those between 21 and 64 years old whose incomes make them eligible would have a choice between a "Healthy Incentives Plan," a Medicaid alternative plan with premiums and co-pays, or the "Volunteer Plan," which provides vouchers to help pay for private health insurance, including the premiums on their employer's insurance plan and other out-of-pocket expenses.
Participants who choose the Incentives Plan, a redesigned component of TennCare (Tennessee's version of Medicaid), would have a Healthy Incentives for Tennesseans (HIT) account modeled after health reimbursement accounts that can be used to pay for a portion of cost-sharing. Participants can "earn" money for their HIT accounts, to help pay for premiums and co-pays, by using preventive services and disease management programs, appropriate use of emergency rooms and completing risk assessments.
The governor said that the plan would go forward if and when the General Assembly approves it, and then when the federal government approves the state's waiver request, which has not been formally submitted.
Dr. Reginald Coopwood, president and CEO of Regional One Health of Memphis, was on stage with Haslam and others for the announcement and told reporters afterward: "This is big; this is huge. For us to be able to insure Tennesseans who otherwise aren't eligible for the current Medicaid system, to expand that into a program where they can get insurance is huge for the state of Tennessee."
The plan will operate as a waiver from the ACA's Medicaid expansion provision.
(c)2014 The Commercial Appeal (Memphis, Tenn.)