Knoxville has fewer hospitals than it did, but the city remains the health-care center for Middle East Tennessee, and the health-care industry here is one of our largest employers. What's looming in the health-care industry is important for us all and especially the local economy.
Tennessee Republicans' almost universal antipathy toward the Affordable Care Act, aka Obamacare, is clouding the issue. There is a tendency to reject anything to do with it.
Hospitals in Tennessee are facing several potential problems:
• A provision of the act allows an expansion of Medicaid (TennCare) to cover more people. If the state chooses it can increase TennCare coverage from the poverty level to people with an income of 133 percent of the poverty level. The feds pay 100 percent for new people signed up in 2014-16 and then the fed share drops each year until it is 90 percent in 2022. This amount to hundreds of millions of dollars in federal funds coming to the state to pay hospital and doctor bills. TennCare would cover about 330,000 more people, estimates the Tennessee Justice Center, and bring $10.5 billion in federal payments between 2014 and 2019. Over the same period it would cost the state $421 million.
Essentially, hospitals would find the medical bills of most of "the working poor" paid. This is revenue hospitals often lose at this point because a large portion of the uninsured make more than poverty level but are not well off enough to be able to buy health insurance. They also tend to work for companies that do not provide health care coverage. When they don't pay their hospital bill, guess who does? If you have insurance you are paying more to cover the care of people who can't pay.
• U.S. Sen. Bob Corker has begun to criticize the Tennessee "gimmick." This is a deal where the hospitals agreed to a tax on themselves which the state then uses to draw down more federal money. For every dollar the hospitals pay in taxes, Washington sends back three dollars. This year it brings in $450 million for hospitals in Tennessee. Corker wants to phase out Tennessee's "enhancement."
• No one is exactly sure what the insurance exchanges portend. That's one reason Gov. Bill Haslam has declined to set up a state exchange and leave it to the feds to do it. Republican legislators were geared up to fight the state exchange; many of them seem to be under the belief that by avoiding the state exchange they are opting out of Obamacare.
Instead, they are just turning it over to the feds to implement and the state will have little say in the program. It is likely that the Obama administration will levy all sorts of mandates for health-care coverage. No one knows what the outcome will be. There may be requirements for insurance companies in Tennessee, like BlueCross BlueShield, to provide coverage that will strain their resources. The health insurance companies pay the majority of the hospital and doctor bills in the state. Financial hits to health insurance companies may affect rates for all of us.
If Tennessee's hatred of Obamacare leaves billions of dollars in extra Medicaid money on the table, if Corker's plan to eliminate our "gimmick" is successful, and if the federal insurance exchange disrupts the health-insurance market, these will indeed be troubled times for our hospitals and doctors.
Memories of TennCare and budget problems may result in the state not expanding Medicaid. But the decision should be based on what is right for the state's residents. The decisions should not be made by grandstanding legislators and radio talk-show hosts who just want to bash Obamacare.
The future of our health-care industry, and a vital part of the Knoxville economy, hangs in the balance. I would suggest that area hospitals administrators and doctors sit down with the Knox County delegation for some information sessions. And the lobbyists for the hospitals and the insurance companies need to do some serious educating down at the Capitol.
Cooler heads need to prevail.