(Bloomberg) — Tennessee has moved to the forefront of a new group of Republican-led states jockeying for hundreds of millions of dollars available under the Patient Protection and Affordable Care Act (PPACA) — Obamacare — for Medicaid expansions.
Gov. Bill Haslam, a Republican, announced today that the state would expand its Medicaid program for the poor under a “real Tennessee solution” that the Obama administration supports in principle. Indiana, Utah, Wyoming and Alaska are also considering an expansion, at least 90 percent of which would be funded by the federal government.
All of the states cast their expansions as departures from the traditional Medicaid program, in which participants pay little or nothing toward their care and the government compensates most doctors and hospitals directly. Their modified programs would generally require individuals to bear more of the costs of their health care. It’s a compromise that lets state Republicans work with the Obama administration even though their party rejects the health-care law.
“We made the decision in Tennessee nearly two years ago not to expand traditional Medicaid,” Haslam said in a statement. “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.”
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Under the plan, called Insure Tennessee, low-income adults would receive either a voucher to help pay premiums for insurance their employers provide or would be enrolled in the state’s Medicaid program, called TennCare, where they would be liable for unspecified out-of-pocket costs. They could pay their share of costs from accounts funded by the state in exchange for “making healthy choices and utilizing the health care system appropriately,” Haslam’s office said in a presentation.
The plan must be approved by the Tennessee legislature next year and by the Obama administration. Haslam’s office said he had secured “verbal approval” for the outline of the plan from the U.S. Health and Human Services (HHS) secretary, Sylvia Mathews Burwell.
The Obama administration “is willing to work with any state interested in expanding Medicaid, and welcomes the news out of Tennessee,” said Aaron Albright, a spokesman for the U.S. Centers for Medicare and Medicaid Services (CMS), an arm of Burwell’s department, in an e-mail. “The department has had productive discussions with Governor Haslam, and we look forward to the state submitting its plan to give low-income Tennesseans new options for health coverage.”
When Democrats wrote PPACA, they envisioned forcing every state to enact a Medicaid expansion by otherwise withholding all funding for the program. The Supreme Court ruled in 2012 that approach was unconstitutional, rendering the Medicaid expansion voluntary for governors.
The expansion is aimed at providing Medicaid coverage to people earning near poverty-level wages. In many states, adults without children aren’t eligible for Medicaid no matter how little their incomes. In states that haven’t taken advantage of PPACA’s expansion, including Texas and Florida, most adults with income beneath the poverty level, about $11,670 for a single person, are ineligible for any government assistance purchasing health insurance.