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VOL. 129 | NO. 42 | Monday, March 3, 2014

Medicaid Expansion Terms Possible

By Bill Dries

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Former Tennessee Gov. Phil Bredesen says federal health officials are probably willing to talk terms on an expansion of Medicaid in Tennessee with the state’s current governor, Bill Haslam.


“The feds want us to do it badly enough that they will negotiate some things to have protections,” Bredesen said in response to a question at the Economic Club of Memphis. The question was whether he thought Haslam should accept an expansion of Medicaid that is all federally funded for the first three years of the expansion.

Haslam has turned down the expansion for now. Last week, Haslam called on U.S. Health and Human Services Secretary Kathleen Sebelius to make a counterproposal in the ongoing negotiations that so far don’t appear to have made much headway.

Bredesen said at the Thursday, Feb. 27, club dinner he believes Haslam should accept the expansion, which would cover an additional 180,000 Tennesseans who are now uninsured. He has offered the same opinion several times over the last year.

“I think what has happened is a sort of hatred of the president, and Obamacare has clouded people’s vision a little bit,” said Bredesen, who was a vocal critic of the Affordable Care Act.

He also cited the impact of Haslam’s still-pending final decision on the Medicaid expansion on rural public hospitals across the state.

“Those hospitals are really suffering now,” Bredesen said.

Bredesen, a health insurance firm founder before being elected mayor of Nashville and then governor, talked about the federal debt, as well as health care costs and the role politics plays in both.

“It’s just plain old economics,” he said of the root cause of health care system problems and the need for reform. “The reason we don’t have better health care value, low cost and higher quality, is because we systemically removed the tension between buyers and sellers. It was done with the best of intentions.”

He said there are “ethical and practical” ways to reintroduce the economic tensions.

“We have enormous scope in this country to change the cost of health care without affecting the quality one bit. In fact, it would probably improve the quality,” Bredesen said, adding legislators have a tendency to underestimate the ability and capacity of the electorate to deal with such change.

On the federal debt, which Bredesen termed “unsustainable,” he added that, unlike federal debt incurred during World War II and other wars, the current debt is not “ultimately self-limiting,” because unlike wars that end, the entitlements or “social insurance” programs of Social Security, Medicaid and Medicare continue.

Bredesen distinguished between those three programs and welfare programs that some define as entitlements.

“These are part of every American’s life plan,” Bredesen said by way of definition of the social insurance programs. “We’ve been able to pay for it a long time out of decreases in what we spend on defense. But that really is coming to a close now. You’ve used up all of that.”

He ranked the Social Security deficit as the easiest of the trio to be remedied.

“That problem could be fixed with a pen. There may not be some people with the courage to pick the pen up,” Bredesen said as he talked of a 4-cent increase in the Social Security tax rate, a decrease in benefits or some combination of the two.

“That is not a difficult problem except for the politics of it,” he said, adding Medicaid and Medicare are more difficult because of an uncoordinated health care system in which doctors charge whatever they want and their patients aren’t aware of what it costs nor care because health insurance pays for it. The chief culprit, in Bredesen’s view, is “the payment system.”

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