insights (2006-36)

State Health Care Initiatives Lag

After decimating TennCare with eligibility restrictions and benefit curtailments in early 2005, the Bredesen administration began heralding steps that would ease at least one of them. Then the state Legislature pushed it even further toward restoring coverage for many of the “uninsurables” who had been cut from TennCare’s rolls.

With savings from reduced enrollment, limitations on prescription drugs and relief from court restraints, Bredesen announced last December that the state would reopen a category of TennCare eligibility that had been closed earlier in the year.

That category is known as the Medically Needy, which most states offer as part of their Medicaid programs. But target dates for its reopening have long since passed, and TennCare’s enrollment window for adults (other than pregnant women) who meet Medically Needy classification standards remains shut. How Come?

TennCare officials ascribe the delays to protracted negotiations with the federal Centers for Medicare and Medicaid Services (CMS) over eligibility criteria. CMS approval is required to obtain federal matching funds for every aspect of TennCare costs. “It’s been very frustrating,” says TennCare spokeswoman Marilyn Wilson, who rejects any notion of foot-dragging on the state’s part but won’t elaborate on what the sticking points have been.

It’s true that standards for qualifying as Medically Needy are complicated as all get out. Only the aged, blind, disabled, and primary caretakers of children need apply. And then they must demonstrate that they have “spent down” their assets and incomes to poverty levels or that unpaid medical bills would cause them to do so. Once having met those “spend down” requirements, Medicaid covers their medical expenses for a period of time. But states vary as to how many months of accumulated bills can be counted toward qualifying as Medically Needy in the first place and for how long those who’ve qualified can remain on the rolls or regain eligibility by evidencing that they’ve incurred subsequent unreimbursed medical expenses sufficient to qualify once again.

At one point, Bredesen proposed to rid TennCare of all these complications by eliminating the Medically Needy eligibility category altogether. That would have wiped out coverage for 97,000 non-pregnant adults then on the rolls as part of the sweeping 2005 disenrollments that also terminated coverage for some 60,000 “uninsurables” and upwards of 100,000 other adult enrollees who were otherwise uninsured. But Bredesen then relented where the Medically Needy were concerned by allowing the 97,000 to stay on while disallowing any newcomers. (Their ranks have subsequently dropped to about 60,000, primarily due to the exclusion of those who were eligible for Medicare prescription drug benefits when they took effect at the beginning of this year.)

The perplexing delays in reopening the Medically Needy category are beginning to be matched by a seeming stretch-out in preparations for restoring affordable health-care coverage to a goodly number of the uninsurables who were stripped of it by the 2005 disenrollments.

In his budget for the current final year, Bredesen originally proposed a minimal step in that direction through creation of what’s called a high-risk pool. Such a pool, patterned after those in many other states, would offer state-subsidized health insurance to the chronically ill who can’t obtain coverage on their own at any price. But even with the subsidy (for which $3.5 million was budgeted), the average monthly premium for pool coverage was reckoned to be upwards of $600—far beyond the reach of low-income uninsurables who accounted for most of those from TennCare.

With prodding from the Legislature, the administration added $13 million to the budget for unspecified amounts of premium assistance for lower-income participants in the pool. Then, in the final days of the legislative session, with the state awash in surplus funds, Sen. Doug Jackson and Rep. Gary Odom, collaborated in pushing through a measure that added another $25 million for this purpose. The Jackson-Odom bill directed the state administration to seek a two-for-one federal match for at least the $25 million under a program known as HIFA—thus raising the potential total for premium assistance to close to $100 million. To guide the undertaking, the bill further provided for creation of a board compromised primarily of legislators and representatives of various sectors of the health-care industry.

It’s now been more than three months since the Legislature adjourned, and the board has yet to be constituted. The official in the state Department of Finance and Administration who’s known to be responsible for formulating high-risk pool and premium-assistance plans doesn’t return this journalist’s phone call. A departmental spokesperson who does says she can’t shed any light on their status. Nor can she say when, or even whether, the state will apply for the federal matching funds. Since this means beating another path to CMS’ doorstep, she invokes Bredesen’s oft-stated aversion to getting entangled in more federal regulations or associated court orders that restrict the state’s freedom of action to control expenses.

Jackson remains determined to get as much funding as possible toward restoring affordable health care coverage to the uninsurables who lost it. And he adds that, “I have a commitment from [Finance Commissioner] Dave Goetz to seek the federal match on tape, and I can play it back to him if I have to”.

But Goetz didn’t say when. And to judge by how long it’s taking to get TennCare reopened to the Medically Needy, it hurts to think about how much longer the process of implementing a premium assistance program may take.