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VOL. 130 | NO. 21 | Monday, February 2, 2015

Both Sides Dig In for Insure Tennessee Special Session

By Sam Stockard

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Battle lines have been drawn for a Feb. 2 special session of the state Legislature to determine the fate of Gov. Bill Haslam’s Insure Tennessee proposal, which would use federal funds to catch some 280,000 working people falling through a health insurance coverage gap.

Haslam presented his idea to legislators in December after negotiating with the federal government nearly two years for a waiver to the Affordable Care Act. But the plan is still getting a cool reception from Republican legislators who dominate the General Assembly and don’t want any connection with Obamacare in Tennessee.

The governor embarked on a statewide nine-stop tour to build support for the two-year pilot program, which he says the state is not obligated to keep if it fails.

As he also began lobbying state lawmakers to gain their backing, Haslam calls Insure Tennessee “a critical first step” in a fundamental change of the state’s health care.

“There are few challenges facing us today as great as those presented by our broken health care system,” Haslam says. “The Insure Tennessee plan is a conservative approach that introduces market principles to Medicaid, provides health care coverage to more Tennesseans at no additional cost to taxpayers and leverages a payment reform initiative that is working to control health care costs and improve the quality of care.”


The looming session is plagued, however, by pending legal arguments such as a U.S. Supreme Court case, King v. Burwell, to be argued March 4 that could affect anything Tennessee does.

Sen. Randy McNally (R-District 5) also has requested an opinion from the state attorney general on legal issues tied to the governor’s proposal.

Groups such as Americans for Prosperity, an organization backed by billionaire brothers Charles and David Koch, are opposing the measure, contending the long-term financial liabilities of ballooning costs and the lack of a reliable exit clause are serious problems.

AFP contends Tennessee should watch how other states end participation in Obamacare and see if the federal government sues them or withholds traditional Medicaid funds, which could put vulnerable residents at risk.

“We are calling on our state officials to reject Obamacare expansion in Tennessee,” says Andrew Ogles, state director of AFP in Tennessee.

“Despite any guarantee from an untrustworthy Obama administration that we can ‘try it before we buy,’ this is the same administration that said, ‘If you like your doctor you can keep your doctor.’ Our state does not need to go down the same disastrous road.”

On the other side, Coalition for a Healthy Tennessee, which includes numerous conservative groups such as the Business Roundtable, contends the proposal makes sense for the state.

“Tennessee’s plan is unique and if it’s passed it will be blueprint for the country,” says Charlie Howorth, executive director of the Tennessee Business Roundtable, a member of the coalition. “I think the governor’s shown true leadership in this.”

Both sides launched ad campaigns in the days leading up to the special session, which could last from one to two weeks.

Most legislators say they haven’t seen any written agreement yet with the federal government or the complete details from the governor, and speculation is brewing over whether the governor has the votes to pass the plan.


“We understand the concept, and the administration has put forth a plan that’s worthy of consideration, but what form that takes remains to be seen. Until that quickens into something concrete, I can’t say,” says Sen. Mark Norris, one of the Senate’s Republican leaders. “I don’t think there’s much appetite for it but I’m not quite sure what it is going to be yet.”

The matter could even get caught up in a procedural hurdle in which Norris says he expects the House to consider the matter first, then send it to the Senate for debate, instead of it moving through both bodies simultaneously.


In fact, Norris was holding out on sponsoring the measure, though he typically carries the governor’s major initiatives.

Lt. Gov. Ron Ramsey says he’s keeping an open mind, too.

“I literally could argue either side. We’re sending a billion dollars in Tennessee taxpayers’ money to Washington and not getting anything in return,” says Ramsey, a Blountville Republican.

“If we were to design a program to use that – I wish it went all the way down through Medicaid – that all Medicaid recipients had to do what this new population would have to do, but that’s where we are with this current administration.”

Conversely, all signs show that Tennessee is a well-run state, and Ramsey says he doesn’t want to obligate taxpayers to a program that the federal government might turn into an unfunded mandate in five to 10 years. The feds pledge 100 percent for the first couple of years, before letting the state start to take more of the burden.



Even Democrats are concerned about the governor’s proposal because they aren’t sure it will cover enough people.

“I believe it’s an absolute no-brainer that we should have expanded Medicaid a year ago,” says state Rep. Craig Fitzhugh, a Ripley Democrat who leads the minority party.

Straight Medicaid expansion through the Affordable Care Act could have saved 800 lives, he contends, because it would cover more people than the governor’s two-tier proposal. Still, he says, Insure Tennessee “merits a very close look by us.”

State Rep. Gerald McCormick, a Chattanooga Republican and House majority leader, says he will sponsor the measure and reportedly was miffed by the Senate’s idea to let the House handle most of the work on Haslam’s proposal rather than work on it at the same time.

“I think if you look at the plan overall, it’s a common-sense solution to a problem that we have and we can’t get out of,” McCormick says. “We’re already paying for these services, just in a different way. It makes more sense to do it this way.”

The basics

Insure Tennessee would provide health insurance coverage to roughly 200,000 Tennesseans between 19 and 64 who are making less than 138 percent of the federal poverty level. That’s $16,000 for an individual and $33,000 for a family of four.

Those in the coverage gap include people who don’t qualify for Medicaid, don’t make enough to obtain tax credits to purchase coverage on the federal Health Insurance Marketplace, or can’t afford Marketplace coverage, even with tax credits.

Supporters say the program is necessary in large part because it will boost hospitals, which are providing care without reimbursement while coping with cuts from the Affordable Care Act. Likewise, businesses might have to pay federal tax penalties if the state doesn’t offer coverage for people in the gap, and Tennessee residents and businesses are paying Affordable Care Act taxes but receiving no benefits.

Those eligible would be able to choose from two options:

• The Volunteer Plan: Members would get a set amount in vouchers to buy employer-sponsored insurance from a private provider and pay for out-of-pocket expenses.

• Healthy Incentives Plan: Similar to TennCare, it would enroll adults starting at 21 in Healthy Incentives for Tennesseans where they would be able to earn contributions through healthy choices such as quitting smoking, passing health assessments and using the health-care system appropriately. They would also make small co-payments for health care.

Who’s backing it?

Supporters such as the Coalition for a Healthy Tennessee say the proposal will improve access to health care and help rural hospitals, which are struggling to stay afloat amid cuts in federal funding. The coalition also states it will inject $909 million in new spending across the state and support 15,000 full-time jobs.

“It is vital for people to know that what Gov. Haslam is proposing is conservative, free-market health care reform and not more of the same Medicaid from Washington, D.C. Insure Tennessee is distinctly not traditional Medicaid expansion,” says coalition spokesman Howorth.

Haslam’s model catches those in the coverage gap and stabilizes rural hospitals without new taxes or cost to the state, Howorth notes. The coalition is made up of more than 100 members such as chambers of commerce, health care, business and civic organizations and is running a grassroots campaign in the state’s 95 counties.

The coalition’s members aren’t compromising their conservative principles at all, says Howorth, who calls the governor’s plan “more of a health-care reform” idea, rather than simply taking money from Medicaid expansion. It contains the principles that should satisfy conservative lawmakers, and many are starting to come around once they understand it, he says.

“It simply would be good for the state from an economic point of view and good for the citizens,” he says, noting it is the best proposal he’s seen yet.

The Tennessee Hospital Association, which has seen a handful of rural hospitals close since Tennessee balked at Medicaid expansion, is pushing for passage and “trying to educate legislators on what it is and what it is not,” says THA Executive Director Craig Becker.

The primary concern, of course, is how to pay for it, and hospitals are willing to help fund it through their hospital assessment, according to Becker. That figure is expected to start at $22 million and work its way up to $175 million by 2021, he says.

While some lawmakers may be stuck on the fact that federal funding is coming through the Affordable Care Act, Becker says THA is encouraging them not to look at it as Obamacare “but what’s best for constituents.”

“The big thing is it’s going to cover at least 200,000 people who don’t have insurance,” and possibly another 200,000, Becker adds.

Gordon Bonnyman, an attorney and former executive director of the Tennessee Justice Center, says the agency would have preferred Medicaid expansion for uninsured working Tennesseans. But he considers Insure Tennessee a fair way to keep federal dollars, prop up hospitals and offer insurance to working families.

With some recent hospital closings, Bonnyman says, there’s a “driving awareness” that the state must act rather than let federal funding slip away.

“The governor has been at it for a year and a half. This is his best shot,” Bonnyman says, noting he hasn’t heard any other options proposed by legislators who are vocally opposed to Insure Tennessee.

Traditionally conservative organizations such as the Tennessee Business Roundtable and Chamber of Commerce are backing the measure, as well, Bonnyman points out.

“At some point, the question must be asked: If not this, what?” Bonnyman says.

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