Gov. Bill Haslam has announced that he’s reached a deal with the Obama administration to allow the state to access hundreds of millions of dollars from the federal government to subsidize health coverage for lower-income Tennesseans.
For nearly two years the Republican governor’s administration has been working on a Tennessee-specific proposal to draw down federal Medicaid expansion funds under Obamacare. Haslam has said he’s uninterested in simply expanding the rolls of Tennesseans dependent on government-financed health care. He’s said he instead wants to “promote personal responsibility” by encouraging healthy behaviors and smart medical care decisions.
Haslam said Monday at the Capitol that what they have come up with is “a plan that would leverage those federal dollars and really begin the work of fixing what is wrong with our health care system, to better align incentives between providers and consumers.”
“Regardless of where you are on the political spectrum, I think you can agree that we are not going to contain costs in our health care system until incentives are better aligned than they are now,” said the governor, who during his speech was flanked by health care professionals and industry and patient advocates.
The plan, a two-year pilot program that Haslam has dubbed “Insure Tennessee,” must pass the Republican-dominated Tennessee Legislature to take effect. Haslam said he intends to call a special session of the General Assembly in January to take up the matter.
The “Insure Tennessee” proposal, which includes vouchers for purchasing health insurance, is being touted by the administration as “based on private market principles.”
The plan also includes “payment reform efforts” that the administration said in a statement will begin “addressing the underlying quality and outcome deficiencies that contribute to growing health care costs and unaffordable insurance coverage.”
“This initiative creates financial incentives to providers to provide high quality care in an efficient and appropriate manner so as to reduce costs and improve health outcomes,” according the the administration’s statement.
Haslam said any additional costs of the program not covered by the federal government will be borne by the health care industry through a self-imposed “assessment.” In 2016 the state’s will have to start picking up 10 percent of the cost of Medicaid expansion spending — a budgetary concern that’s been a big sticking point for many Tennessee Republicans.
Crag Becker, president of the Tennessee Hospital Association, which has been lobbying heavily for Medicaid expansion, indicated his group is pleased with the governor’s efforts.
“I think it is a great day for Tennessee and a great day for our hospitals as well,” said Becker. “The governor is to be commended for sticking with it and trying to negotiate this, and I think it is going to be a plan that everybody will be very happy about.”
Gov. Haslam said his administration has received “verbal approval from the Department of Health and Human Services” for the federal grant of permission necessary to set the plan in motion.