Tennessee has not expanded Medicaid (TennCare), which means that there are an estimated 163,000 residents in the coverage gap — ineligible for Medicaid and also ineligible for premium subsidies in the exchange. In Tennessee, this group is comprised of non-disabled adults with income below the poverty level and without minor children. If the state were to expand Medicaid, at least 250,000 people (some studies have put this number quite a bit higher) would gain access to coverage, including nearly 100,000 who currently have access to premium subsidies and cost-sharing reductions in the exchange, but who would have access to much lower out-of-pocket costs under Medicaid.
But Medicaid expansion has been a non-starter for most Republican lawmakers in Tennessee, who control both chambers of the state’s legislature. Instead, GOP lawmakers have voted to impose a work requirement on low-income parents who are currently eligible for TennCare. And they want to use TANF funding to cover the cost of implementing the work requirement.
The Trump Administration has made it clear that they are open to the idea of Medicaid work requirements, and approved Medicaid work requirement waivers for Indiana, Kentucky, and Arkansas in the first several weeks of 2018.
H.B.1551/S.B.1728, which passed with a 72-23 vote in the House in March, and a 23-2 vote in the Senate in April, directs Tennessee to seek federal permission to impose a work requirement on TennCare (Medicaid) enrollees who are “able-bodied working-age adult enrollees without dependent children under the age of six.” No other exemptions are specified in the text of the bill. The legislation, which also calls for the state to seek federal permission to use TANF funding to implement the work requirement, is expected to be signed by Governor Haslam.
Since Tennessee has not expanded Medicaid, the only population that would be subject to the work requirement would be parent and caretaker relatives — a population that qualifies for Medicaid in Tennessee with income up to 103 percent of the poverty level.
According to the fiscal note for H.B.1551, there are about 300,000 TennCare enrollees in the parent and caretaker relatives eligibility category at any given time. Roughly half of them already meet, or are exempt from, the existing TANF/SNAP work requirements in Tennessee, so they would automatically be deemed compliant with a Medicaid work requirement.
Nearly 49,000 of the remaining 150,000 enrollees are assumed to be the primary caregiver for a child under the age of six, and would thus be exempt from the work requirement that Tennessee is considering.
According to the fiscal note, additional exemptions, for people who are elderly, disabled, or in drug addiction treatment, bring the estimated number of people who would be subject to the work requirement down to 86,439. Assumptions about exemptions are in the accompanying fiscal note, and Republican lawmakers have said that the waiver proposal will include various exemptions. It’s noteworthy, however, that the legislation itself has no details, unlike other bills that were introduced with exemption language included in the text.
And interestingly, the fiscal note states that an estimated 1.22 percent of the parent and caretaker TennCare population would be exempt from the work requirement due to being in treatment for drug addiction, but a proposed amendment to the bill, which would have explicitly exempted people going through substance abuse treatment, was tabled in a 68-22 vote in the House.
The fiscal note includes an estimate (based on Kaiser Family Foundation data) that 57 percent of the people subject to the work requirement are already working, leaving roughly 37,000 people who are not currently working, but who would be subject to the work requirement if it’s enacted. The expectation is that about 10 percent of those people would lose their Medicaid coverage due to failure to comply with the work requirement.
There are about 1.4 million people enrolled in TennCare, but the work requirement would not apply to the vast majority of them, including children, the elderly, and disabled enrollees.
GOP lawmakers want to use TANF money to impose work requirement
H.B.1551 was amended by the House in March, adding a section to the bill to require the state to also seek federal approval to use TANF (Temporary Assistance for Needy Families) funding or other federal funding to implement the work requirement. The state initially estimated that implementing the work requirement will cost more than $18 million per year in state funds, and Republican lawmakers want to use TANF money — designated to provide assistance to very low-income families — to cover the cost of imposing a work requirement that is expected to strip health coverage away from several thousand impoverished Tennessee residents. Lawmakers note that TANF currently has $400 million in reserves in Tennessee, but one analysis clarifies that the surplus is due to the paltry level of support that TANF provides in Tennessee: a maximum of $185/month in benefits for a family of three.
Proponents of the work requirement and the proposed TANF funding note that one of TANF’s stated goals is to get people into the workforce and encourage self-sufficiency. But stripping low-income parents of their health insurance is not likely to prove beneficial in the quest to help people get back on their feet.
H.B.1551 passed in the Tennessee House in March, on a 72-23 party-line vote. The text of the amended legislation that passed in the House clarifies that if the federal government does not approve the use of TANF funding (or other federal funding) to implement the work requirement, the state won’t move forward with seeking a waiver to impose a Medicaid work requirement.
House Democrats tried in vain to add several other amendments to the bill, including:
- An amendment to expand Medicaid and apply the work requirement to the expansion population.
- Amendments to exempt people going through substance abuse treatment, or who have a history of addiction or mental illness, from the work requirement
- An amendment to ensure that if parents of minor children were subjected to the work requirement, the state would seek to use TANF funds to pay senior citizens to provide childcare while the parents were working.
- An amendment that would require the state to seek approval to use TANF funding to provide jobs, paying at least $15/hour, to people subject to the work requirement.
- An amendment to exempt parents from the work requirement if they have children under the age of 12 (the bill calls for exempting parents if they have children under the age of 6).
An identical bill, S.B.1728, was introduced in the Senate in January, but the Senate opted to substitute the amended version of H.B.1551 (with the requirement that the state must obtain TANF funding or other federal funding to implement the work requirement), voting on it in mid-April, and passing it overwhelmingly (23-2). In the Senate, several amendments were also rejected, including:
- An amendment to add Medicaid expansion to the legislation.
- An amendment to create an exemption from the work requirement for people experiencing domestic violence or acting as caregivers for other people, as well as an amendment to exempt people with bleeding disorders.
- An amendment that would call for the work requirement program to end after one year if the state’s costs associated with implementing the work requirement exceeded the state’s savings from the work requirement.
Although the Senate passed the measure in April, Tennessee officials had already posted a job opening for a “Policy Analyst to implement a new Medicaid work requirements program,” before the bill was even scheduled for a vote in the Senate. Critics of the proposed work requirement have denounced the state’s decision to post the job opening before the bill has been voted on in the Senate. But TennCare defended the job listing, noting that if the bill did not pass, the state simply wouldn’t fill the position.
The fiscal note on H.B.1551 indicates that the work requirement would not be fully implemented until July 2020. Two other bills, H.B.2124 and H.B.2542, which did not advance in the House, included much more detail in terms of how a work requirement would be imposed for TennCare, and H.B.2124 included an effective date of January 2019.
Governor Haslam pursued modified expansion
In March 2013, Tennessee Governor Bill Haslam unveiled his “Tennessee Plan” for Medicaid expansion. His proposal involved using federal Medicaid funding to purchase private coverage for up to 175,000 to 200,000 low-income Tennessee residents. It also called for copays for some enrollees, payment systems for providers that are based on outcomes rather than fee-for-service, and a clause that requires future renewal of Medicaid expansion to be approved by the legislature.
In November 2014, Haslam announced that his negotiations with the federal government were ongoing, and this was still the case in December, although Haslam had said that he has “verbal” approval from the federal government for his plan. In January 2015, Governor Haslam called for a special session of the Tennessee legislature to address his Insure Tennessee plan.
But Senate committees shut it down
Unfortunately, on February 4, the Senate Health and Welfare Committee voted 7-4 against Haslam’s Medicaid expansion proposal, blocking it from going any further in the legislative process during the 2015 session. Although representatives from the Tennessee Hospital Association, the Tennessee Medical Association, and the Tennessee Business Roundtable all provided support for the Medicaid expansion proposal, it was not enough to sway the conservative lawmakers who were concerned about the long-term costs to the state or the difficulty the state would face if it were to try to repeal Medicaid expansion a few years down the road.
For the record, the federal government paid 100 percent of the cost of covering newly-eligible Medicaid enrollees through 2016, and the state’s share will gradually rise to 10 percent by 2020 – but will never exceed 10 percent.
The Insure Tennessee legislation was considered again by another Senate Committee in March 2015, but it too was ultimately rejected. That version called for the state to wait until the Supreme Court ruled on King v. Burwell before proceeding with Medicaid expansion (on June 25, 2015, the Court ruled that premium subsidies are legal in every state, thus preventing destabilization in the individual insurance market in Tennessee). It also called for a six-month waiting period before Medicaid coverage could be reinstated if it were terminated because an enrollee didn’t pay premiums, and it required the state to obtain a letter from HHS stating that Medicaid expansion could be terminated at any time, at the state’s discretion.
Haslam had considered calling lawmakers back for another special session to address Medicaid expansion again, but said in April 2015 that he wouldn’t do so until it appeared that legislators had softened to the idea of Medicaid expansion, or were at least beginning to agree on modifications to the current proposal. Tennessee relies heavily on uncompensated care funding from the federal government, and by the fall of 2015, it was clear that the funding was in peril. Expanding Medicaid would eliminate much of the need for ongoing uncompensated care funding.
3-Star Healthy Task Force
In April 2016, Tennessee House Speaker Beth Harwell detailed the creation of a legislative task force to address access to healthcare in the state. Democrats roundly criticized the task force, calling it a joke and noting that there were no Democrats on the task force. Governor Haslam stopped short of saying that the 3-Star Healthy Project’s formation indicated that Insure Tennessee was dead, but acknowledged that Insure Tennessee hasn’t been able to get traction with the legislature, and noted that the plan that would work best would be one that could garner support from Tennessee lawmakers.
The “3-Star Healthy Project” task force began meeting to come up with proposals that could be sent to the federal government, and by September, they had a TennCare expansion proposal ready to send to CMS, although by early November, the schedule was that it would be submitted to CMS by the end of 2016. While it was better than nothing, it was a far cry from Haslam’s Insure Tennessee proposal.
In its initial phase, the pilot program was slated to expand TennCare eligibility only to people with mental health and substance abuse disorders, and to veterans. These groups would have been eligible for TennCare with income up to 138 percent of the poverty level, under the terms of the expansion pilot.
But when Donald Trump won the presidential election in November 2016, and the TennCare expansion proposal was put on hold while the state waited to see what would happen with healthcare reform at the federal level under the new Administration. Ultimately, the ACA was not repealed (as some had expected after Trump’s victory), but the Trump Administration has opened the door for Medicaid waivers with provisions that the Obama Administration never allowed, including work requirements. In 2018, Tennessee lawmakers are considering legislation that would direct the state to seek federal approval for a work requirement for parents in the existing TennCare program — a measure that would essentially be the opposite of Medicaid expansion, as it would serve to reduce the number of people with Medicaid coverage in Tennessee.
Republican lawmakers introduced legislation (S.B.118 and H.B.69) in 2017, based in part on the work done by the 3-Star Healthy Task Force, calling for the state to proposed a federal waiver to expand Medicaid using a block grant. Both bills were tabled in 2017, but reconsidered in 2018. Ultimately, H.B.69 was tabled again in 2018, and S.B.118 failed in committee.
Medicaid expansion via Insure Tennessee was also introduced again in the Tennessee House in 2018, but did not advance. A bipartisan proposal to allow people age 55 or older to purchase TennCare (ie, a Medicaid buy-in program) also did not advance.
Who is eligible for Tennessee Medicaid?
Because Tennessee has not yet expanded Medicaid under the ACA, eligibility guidelines are unchanged from 2013, and non-disabled, non-pregnant adults without dependent children are ineligible for Medicaid, regardless of their income. TennCare is available to the following legally-present Tennessee residents, contingent on immigration guidelines:
- Adults with dependent children, if their household income doesn’t exceed 103 percent of poverty. This is one of the highest thresholds in the country among states that have not expanded Medicaid.
- Pregnant women and infants under one, with household income up to 195 percent of poverty.
- Children age 1 – 5 with household income up to 142 percent of poverty, and children 6 – 18 with household income up to 133 percent of poverty.
- CHIP (Cover Kids) is available to children with household incomes too high for Medicaid, up to 250 percent of poverty.
How do I enroll?
Enrollment in TennCare is year-round; you do not need to wait for an open enrollment period if you’re eligible for Medicaid
- Tennessee uses the federally-run insurance marketplace, so you can enroll through HealthCare.gov or use their call center at 1-800-318-2596.
- You can go to any of the state’s 95 Department of Human Services offices to apply in-person. You can also use the “find local help” link on HealthCare.gov to find someone in your community who can help you enroll.
- You can print a paper application and submit it to your local Department of Human Services office (click here for contact information).
The only way to enroll online is through HealthCare.gov. TennCare has had considerable problems with their Medicaid enrollment system; initially they had planned to build a new system that would be functional by October 1, 2013. But that didn’t work out, and the old system didn’t have the functionality to be upgraded properly. As a result, all enrollments had to go through HealthCare.gov, and in the early days of Healthcare.gov operation, there were significant delays in processing enrollments once they were sent to TennCare.
TennCare enrollment is still conducted via HealthCare.gov, but that system has been operating well since 2014 and the glitches of the early days have long since been addressed. TennCare has been working to develop a new Tennessee Eligibility Determination System (TEDS), which is expected to be operational by January 2019.
During the first open enrollment period (October 2013 through April 2014) 83,591 people in Tennessee enrolled in Medicaid or CHIP through HealthCare.gov. TennCare requested an additional $180 million from the state in late 2013 because of the rapidly increasing enrollment they were seeing soon after open enrollment began on the exchange.
As of August 2016, TennCare was covering 1.55 million people in Tennessee. A total of 1,628,196 people had coverage through Tennessee’s Medicaid and CHIP programs as of July 2016. That was a 31 percent increase since the end of 2013, despite the fact that the state has not expanded Medicaid. This is known as the “woodworker effect,” as people who were already eligible for Medicaid under the existing guidelines “come out of the woodwork” thanks to the outreach and enrollment efforts under the ACA.
By the end of 2017, however, total Medicaid/CHIP enrollment had dropped to just under 1.6 million people — a decrease since mid-2016, but still a net increase of 23 percent since 2013.
Tennessee Medicaid history
Tennessee was among the last states to implement Medicaid, with their program taking effect in January 1969, three years after Medicaid was enacted by the first states to embrace it.
TennCare was created in 1994 under a federal waiver that allowed for some deviations from the standard Medicaid program. TennCare was the first Medicaid program to utilize private sector managed care for all of its members. Initially, TennCare was available at no-cost for Medicaid-eligible residents, and also on a sliding-fee scale (premiums were subsidized) for Tennessee residents who were not able to obtain other private insurance, particularly those who couldn’t get other coverage because of pre-existing conditions.
By 1995, amid soaring enrollment, TennCare stopped accepting applications from non-Medicaid eligible adults unless they were unable to get other coverage because of pre-existing conditions. And later the “uninsurable” population eligible for TennCare was reduced by implementing income caps for their eligibility.
TennCare’s financial viability continued to be in question, and in 2005 the state removed about 190,000 beneficiaries from the program, implemented benefit reductions, and put caps on the number of prescriptions a TennCare member could get.
Eventually, Tennessee created CoverTN and AccessTN to provide coverage for certain small business groups, the self-employed, and people who were otherwise uninsurable. Following the reforms and the shift to only insuring the Medicaid-eligible population through TennCare, the program’s budget seemed to be getting back on track by the late 00’s.
When the ACA was created, it was intended that Medicaid expansion would be nationwide, so subsidies in the exchange were not designed to apply to people living below the poverty level, since they were expected to have access to Medicaid. But in 2012, the Supreme Court ruled that states could opt out of Medicaid expansion, and Tennessee is one of 19 states that have not yet expanded their programs.
If Tennessee continues to reject Medicaid expansion under the ACA, the state will miss out on $22.5 billion from 2013 to 2022. In addition, Tennessee residents will pay $7.8 billion in federal taxes that will be used to fund Medicaid expansion in states that are expanding coverage – while getting no Medicaid expansion funds for their own state.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.