Thousands of Tennesseans and respected health leaders from across the country spoke out against state’s destructive TennCare Block Grant proposal. Ultimately, the federal government has asked TennCare to make significant changes to some of the core components of its proposal. We are awaiting a federal review of the changes TennCare agreed to make.

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Here's what happened.

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In the waning days of the Trump Administration, the federal Centers for Medicare and Medicaid Services (CMS) approved the plan anyway. CMS never accepted public comments, as required by law, and instead locked in the state’s plan for ten years.

The block grant scheme, called the “TennCare III Waiver,” was the first such deal ever approved by CMS. It created a precedent that, if allowed to stand, will harm Tennesseans and undermine Medicaid across the country.

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Here’s why that was dangerous.

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The block grant proposal created incentives to cut TennCare and use the resulting “savings” for other parts of the state budget. The block grant encouraged the state to generate massive savings, but it’s impossible to simultaneously achieve significant health savings and maintain or increase access to healthcare coverage, especially because state officials tout how lean our program already is. The state has an abysmal track record hoarding money intended for Tennesseans in need. This takes away accountability and gives them even more money to mismanage.

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There was no commitment to cover any additional people or any additional benefits. Any claims that the block grant would cover more people were not reflected in the deal that CMS originally approved. The promise that no enrollees or benefits would be cut was empty because they can (and have) erected administrative barriers for enrollment, redetermination, and authorization of services. The Trump-approved block grant allowed the state to arbitrarily deny access to some prescription drugs for serious and costly illnesses, like cancer and hepatitis. That scheme gave the state less oversight and accountability over billions of taxpayer dollars.

 

 

The block grant was a political gimmick, not a serious answer to Tennesseans’ real health concerns. The TennCare III Waiver makes no mention of the pandemic or rural health and hospital closures. TN’s urgent healthcare needs deserve serious attention and real action from political leaders:

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• The state’s handling of the COVID-19 pandemic led to one of the worst outbreaks in the world;

• TN is losing rural hospitals at a faster rate than any other state;

• TN’s loss of health coverage for kids is among the worst in the nation;

• Hundreds with addiction die because they are uninsured and cannot afford treatment;

• One third of TN adults have pre-existing conditions and need assurances that they can maintain access to health care their lives and savings depend upon.

 

The block grant left money on the table that could be used to really improve our healthcare system. There is a better way to really address Tennessee’s urgent healthcare priorities without seeking a risky and damaging block grant that no other state was foolish enough to want. 40 other states (plus DC), led by governors and legislatures from both parties, have tapped federal funds to expand Medicaid to working families. Former Republican Gov. Bill Haslam proposed his Insure Tennessee plan but was blocked by the legislature. Such a plan would bring in $1.4 billion/year of new federal funds to address health priorities and give 300,000 Tennesseans the health coverage they need. And Congress has offered Tennessee another $900 million if it expands. If state officials are serious about improving health care, they should abandon TennCare III and adopt Gov. Haslam’s plan that puts our federal tax dollars to work helping Tennesseans.

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The touted “savings” weren’t guaranteed. The shared savings of the block grant depended on the state meeting 10 quality metrics that had been approved. No one has been able to beat medical inflation trends, and TennCare was already starting from a very low base of per enrollee spending (the base CMS approved is much lower than what Tennessee submitted), so savings were contingent on drastic cuts. Compare this to the guaranteed $1.4 billion every year that our state could unlock if we accepted federal dollars to provide coverage to 300,000 more Tennesseans. Expanding Medicaid would provide a lot more money and it’s a tried-and-true program, compared to the block grant. The block grant is a booby trap that could devastate the state budget later down the road when the base is recalculated.