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Medicaid Expansion’s 5-Year Price Tag: $200 Million

An expansion of taxpayer-financed health insurance for the poor as prescribed by Obamacare would cost the state nearly $200 million through 2019, the state’s top TennCare official said this week.

And in each year after that, the expansion would cost $100 million or more, TennCare Director Darin Gordon said during a state budget hearing for his agency. The Haslam administration is deciding whether to enlarge the state’s Medicaid program by lifting eligibility to as high as 138 percent of the poverty level — or about $31,800 for a family of four.

The administration is also weighing whether the state should run its own insurance exchange, an online comparison tool to buy and receive subsidized health insurance, or allow the federal government to run an exchange for Tennesseans. The deadline to decide is Friday.

Both questions stem from the Patient Protection and Affordable Care Act, signed into law two years ago. Its major provisions kick in in 2014, but states are in the process of planning implementation now.

The question of state-based or federal exchanges largely turns on whether the state wants to retain control over what plans would be on the menu and the costs of administering the exchange, though officials said questions still surround the nuts-and-bolts requirements for an exchange.

Under a federal exchange, “they’re going to decide what the offering is,” Gov. Bill Haslam said, “so they could have the ability to just pick the national insurers, the six or seven folks that offer national coverage. And regionals and everybody else would never be on the menu.”

Beyond health care reform, Gordon outlined $164.8 million in cost increases to state taxpayers for fiscal year 2014. More than two-thirds of that amount is based on inflation and expected enrollment in TennCare and CoverKids, a state health insurance program for children 18 and younger.

This year, the Health Care Finance and Administration agency has a $9.6 billion budget, with $3.05 billion coming from state taxpayers. The agency oversees TennCare and certain other health insurance-related programs.

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