Haslam Medicaid decision panned by health care advocates, praised by GOP lawmakers

Hank Hayes • Mar 27, 2013 at 11:05 AM

Tennessee Gov. Bill Haslam’s decision to reject a “pure” Medicaid expansion and pursue a separate plan to allow the uninsured to buy private health insurance with federal dollars got a thumbs-down from health care advocates, hope from hospital groups and a thumbs-up from GOP lawmakers.

“To say that we are disappointed would be an understatement,” said Brad A. Palmertree, interim executive director of the Tennessee Health Care Campaign, a Nashville-based nonprofit health care consumer advocacy organization. “We all know that those who need insurance the most are usually the ones who cannot afford it. Because of his decision, there will still be hundreds of thousands of uninsured Tennesseans. These will be children who will go without needed vaccinations, baby boomers who will continue to put off needed care and individuals living with disabilities without needed aids.”

Tennessee had the option to do the Medicaid expansion under the 2010 federal health care reform law, called the Affordable Care Act.

Both Wellmont Health System and Mountain States Health Alliance (MSHA) had lobbied hard for the federally-funded expansion and warned thousands of health care jobs might be lost without it.

More than a half-dozen chambers of commerce, including Kingsport’s and Johnson City’s, also endorsed the expansion as outlined by the federal government.

Although the projected early federal match for the Medicaid expansion population exceeded 90 percent, Haslam administration estimates indicated it might cost state taxpayers $200 million over the first five years of implementation.

Tennessee Hospital Association President Craig Becker suggested Haslam’s plan amounts to the uninsured seeking coverage in a federal health insurance exchange scheduled to go into effect next year.

“We understand the need for clarity, and we plan on working with the administration and the legislature to get the answers that will allow the state to make coverage available to the additional Tennesseans with incomes less than 138 percent of the federal poverty level,” Becker said in an emailed statement. “We are hopeful we will get the necessary assurances from the federal government that will allow the governor to pursue the vision he outlined this morning and there can be a special session of the legislature in Tennessee to take advantage of the 100 percent federal funding available this year.”

MSHA Chief Financial Officer Marvin Eichorn said his hospital system wants the uninsured to get coverage.

Wellmont, in an emailed position statement, said Haslam’s alternative approach is potentially promising if it can be achieved.

“Wellmont will need to see additional details about the governor’s proposal, but it remains essential that health insurance coverage be expanded in Tennessee,” the Wellmont statement said.

Haslam said his “Tennessee Plan” would include patient co-pays and measuring health outcomes, plus a sunset provision that could only be renewed with the legislature’s approval.

The federal government, Haslam pointed out, would have to approve his plan, which would cover an estimated 175,000 extra Tennesseans. TennCare, the state’s Medicaid program, currently serves 1.2 million low income Tennesseans.

U.S. Sen. Lamar Alexander, a former Tennessee governor, promised in an emailed statement to do all he can to help Haslam get flexibility from the federal government.

Haslam said his annual amendment to his proposed state budget will not include language to accept federal funds to finance an outright Medicaid expansion — an announcement drawing applause from GOP lawmakers.

Lt. Gov. Ron Ramsey, in an emailed statement, approved Haslam’s decision to reject what Ramsey called President Barack Obama’s idea of Medicaid expansion.

“Without bold reform of the Medicaid program tailored to Tennessee’s unique situation, there can be no compromise on this issue,” Ramsey, R-Blountville, said. “Four out of every 10 dollars the federal government spends comes out of the back pockets of future generations. Tennessee must receive assurances that have not been forthcoming. Governor Haslam has laid out a plan for what true health care reform looks like.”

U.S. Rep. Phil Roe, R-Tenn., agreed. “Expanding a broken (Medicaid) system would do more harm than good,” Roe insisted.

Tennessee Republican Party Chairman Chris Devaney also cheered Haslam’s decision.

“Once again, Governor Haslam has proven he is a man of principle,” Devaney said in a prepared statement. “He took his time to thoroughly research this issue and gather all the facts. Instead of merely providing an answer that was politically motivated, he dutifully went about the business of being a true leader.”

State Rep. Jon Lundberg, R-Bristol, also supported Haslam’s decision.

“I think (Haslam’s) comments reflected that he weighed the decision from all angles,” Lundberg said in an email. “Ultimately, to say no was — and is — the best policy for the state of Tennessee ... unless the federal government could agree to a series of stipulations.”

Eichorn said hospital groups don’t regret selling the Medicaid expansion to lawmakers with warnings of job losses and hospital closings.

“The message we’ve communicated has been consistent,” Eichorn said. “The cuts are going to happen. The cuts are real. They are not made up numbers. ... If they can get (health care coverage for the uninsured) through the exchanges, it really doesn’t matter. ... This approach, if it winds up getting approved by the federal government, we’re fine with it.”

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