While TennCare administrators struggle to keep the wheels on its existing chassis, a blue-ribbon Commission on the Future of TennCare is close to recommending a new model along some very different lines.
The recommendations on the table at last week's commission meeting would take a progressive stride toward making health insurance accessible to nearly every Tennessean. But paradoxically, they would regressively cut off TennCare coverage to perhaps as many as 50,000 individuals whose health problems have made them uninsurable.
The commission is charged with completing its work by September to provide a framework for negotiation between the state and the federal government over the shape of TennCare, after its present contractual term concludes at the end of 2001. Because Washington foots the bill for nearly two-thirds of Tenn- Care's total costs (approaching $5 billion annually) the federal Health Care Financing Administration must agree to any changes—unless the state elects to go it alone.
While the commission could yet change direction, it's now headed toward putting coverage for enrollees eligible for Medicaid on a very different footing from individuals who are on the rolls purely because they are otherwise uninsured. Presently, TennCare's 800,000 Medicaid eligibles and 500,000 uninsureds get exactly the same benefits from its network of managed care organizations, with only higher-income beneficiaries paying any premiums. Since 1995, however, the enrollment window has been closed to some 450,000 Tennesseans who remain uninsured.
Under the commission's contemplated new construct, Medicaid eligibles would continue to be covered as before. But all other Tennesseans up to a certain income level would become eligible for state-subsidized health insurance. If their employer offers health insurance, then the state would pay the employee's share of the total premium (up to 50 percent on an income-based sliding scale). If they don't have access to employer coverage, they could sign up for a state-sponsored health plan separate from Tenn-Care and offering more limited benefits, with premiums and co-payments also on an income-based sliding scale.
A huge question mark overhanging this stepping stone to universal health insurance is the income cap on eligibility. A draft report before the commission proposed placing the cap at 200 percent of the federal poverty limit. That limit is roughly $8,000 per individual in a household, meaning that a family of four (at 200 percent) would qualify with income up to $64,000. In the absence of any cost data, however, the commission asked the state comptroller to come up with alternative cost estimates based on 125 percent and 150 percent of the limit. One thing for sure is that whatever level is selected will be designed to contain the growth in TennCare costs, which have been escalating at double-digit rates. So any initial step toward universal insurance could turn out to be a halting one.
Another big question is whether HCFA will agree to federal matching for such a program. For over a year, the state has been seeking without success to get HCFA approval for benefit limitations and increased premiums under its existing TennCare contract. The state's deputy commissioner for finance and administration, John Tighe, advised the commission that, "The feds may or may not match on premium assistance [by the state]. We don't know that." The commission has not yet addressed whether to make its proposed course contingent on federal matching.
The worst part of the proposal is that it would leave the seriously ill with incomes above the cap without the uninsurable coverage they now have under TennCare. While only 4 percent of TennCare's 1.3 million enrollees have incomes above 200 percent of the poverty limit, most of these are believed to be among the 125,000 uninsurable on the rolls. To cushion the impact, they would be allowed to stay on for a one-year transitional period. But that begs the question: Transition to what? Charity care coupled with state payments to hospitals that bear a disproportionate share of the burden seemed to be the only answer forthcoming at the meeting. Granted, employers and insurers alike have devised ways to dump bad risks on TennCare. And one cannot dismiss Tighe's assertion that, "People only show up when they need a transplant or whatever, which is like getting fire insurance after your house has burned down." Still, a better safety net is needed along the lines of those provided in more than 20 other states including California whose collective uninsurable ranks add up to less than Tennessee's.
Another problematic aspect is the state's ability to cope with any major changes in TennCare. The proverbial devil is in the details and the law of unintended consequences reigns supreme in the enormously complex, rapidly changing health care field. Perhaps partly in relation to that, Tenn-Care's administration has become notorious for its stumbly, bumbly ways. Can employers with health plans be induced or required to put up with all the governmental red tape associated with participating in a premium assistance program? And if they do participate, will employers' health insurance costs (for their share of the premium) swell as a result of increased employee participation to the point where companies will drop their health insurance plans? These are just a few of a myriad of questions that need to be addressed before a new scheme of things is implemented.
As one way to encourage more employers to offer coverage or to help cover the state's cost if they don't, the commission considered a "play or pay" provision. But the consensus seemed to be that trying to impose fees on companies that don't offer health insurance would be politically, if not administratively, impractical.
Whatever the commission recommends won't be due to take effect until 2002. In the meantime, TennCare as we know it is struggling to stay afloat. Despite a 20 percent increase in payments to MCO's effective July 1, it's anything but clear whether TennCare can keep or attract enough MCO's with enough providers to cover its 1.3 million enrollees. Blue Cross, which has been covering half of them, is in the process of withdrawing but recently indicated it might be willing to re-enter on a smaller scale. One of the two other largest MCO's, Xantus, is in receivership, and the other, Access Med Plus, appears to be teetering near the brink. Tighe informed the commission last week that 10 prospective new entrants are participating in a procurement process that's due to lead to selections on Sept. 8. They will then have to line up provider networks, amid a lot of physician recalcitrance, prior to a November date when all enrollees will be allowed to pick an MCO per an annual balloting requirement that's been avoided for the past year. An almost certain exodus from Xantus and Access Med Plus could overload the rest and put TennCare into crisis management mode once again.
The real solution to TennCare's woes is a national move to comprehensive health coverage. But Congress has been even more fickle than the state Legislature when it comes to bringing the U.S. up to the standards established in every other civilized nation in the world.