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.