TennCare’s fate remains uncertain
The future of TennCare is in limbo.
Last week Tennessee Gov. Phil Bredesen announced plans to dismantle the 10-year-old program — which provides health coverage to 1.4 million people in the state who are poor, disabled or otherwise unable to obtain health insurance — and return to Medicaid. He pointed to TennCare's spiraling costs, reduced federal funds and litigation brought by the Tennessee Justice Center advocacy group, which have immobilized efforts to reform the program and trim its cost, as the primary reasons for the move.
On Tuesday, the advocacy group's attorneys filed motions in federal court to suspend that litigation for two years, with the goal of keeping TennCare alive. On Wednesday, Bredesen extended previously stated deadlines for pulling the plug on TennCare to after the Thanksgiving holiday. If an accord is reached, the two sides will discuss the motions before U.S. District Judge John Nixon.
If the last-minute plans to halt that litigation fail, the state will return to the basic Medicaid coverage that was in place pre-TennCare and which exists in most other states. It's estimated that 430,000 Tennesseans will lose their health insurance by a switch back to Medicaid.
Preliminary plans call for TennCare to be phased out over a six-month period, which would end by the middle of next year. Details of the transition plan have not yet been revealed, so it's difficult to gauge what the impact on VUMC may be. Since the inception of TennCare, VUMC and Regional Medical Center in Memphis have been two of the largest TennCare providers in the state. Vanderbilt had nearly 9,000 TennCare admissions and more than 100,000 TennCare outpatient visits during fiscal year 2004.
“We are definitely pulling for TennCare,” said Norman B. Urmy, executive vice president for Clinical Affairs. “Its loss would mean more than 400,000 Tennesseans would, at least for a time, lose their health insurance. The impact on those families, some of whom have illnesses that make it impossible to qualify for any insurance, would be devastating.
“It is really too early to know what impact dissolving TennCare would have on us, but we hope the governor is successful in keeping TennCare alive.”
For Tennessee's fiscal health, leaving TennCare as it is is not an option. Already a $7.8 billion black hole, including $2.5 billion in state money, the program would cost $650 million more in the 2005-06 fiscal year, and current estimates project that by 2008 TennCare would devour as much as 91 percent of all new tax dollars.
By switching to Medicaid the state will save approximately $500 million next fiscal year compared with what TennCare would cost if nothing changed.
Seeing the financial writing on the wall, Bredesen earlier this year proposed major changes to the TennCare system that would have kept all 1.3 million people enrolled, but with limited benefits. Those changes were effectively blocked by litigation brought by the Tennessee Justice Center.