Hungry TennCare eating more of state budget

Associated Press • May 24, 2013 at 1:17 PM

JACKSON, Tenn. (AP) — State Treasurer David Lillard says expanding health care costs could absorb funding the state used to spend on other needs.

The Associated Press reported Lillard talked about the potential impact of the Affordable Care Act on Tennessee finances as he spoke to the West Tennessee Association of Health Underwriters on Thursday.

Lillard noted the state budget that goes into effect July 1 contains $391 million in new revenue and more than $300 million of that will be consumed by TennCare.

"You're dealing with a situation where you can have a shift in priorities going forward," he said.

Lillard said the federal act puts a mandatory $1.2 billion financial load on Tennessee.

"That's from (fiscal year) 2013 to (fiscal year) 2019," Lillard said. "That's about $200 million a year."

Lillard said support for higher education could further erode as a result. In 1990, state revenue funded more than half the cost of state universities. That percentage has already declined to about 38 percent and could be further reduced.

Lillard said with TennCare using up most of the money, programs such as higher education and K-12 schooling will have to compete for funding.

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