TennCare to be saved, with cuts

TennCare to be saved, with cuts

January 10, 2005

KNOXVILLE (WATE) -- Gov. Bredesen announced Monday he's worked out details to save TennCare, the state's expanded Medicaid program, for full coverage of 612,000 kids. However, he said as many as 323,000 people will lose their coverage.

During his announcement in Nashville, Bredesen said, "This is not the approach to TennCare reform that I originally envisioned. But under the legal and economic circumstances, it's our best chance for maintaining care for as many Tennesseans as possible."

According to the governor's plan, "basic TennCare" will maintain a reasonable level of benefits for 396,000 adults who are eligible for Medicaid.

Of the 323,000 adults who'll lose TennCare coverage because they aren't eligible for Medicaid, Bredesen says 24 percent will still be covered under Medicare.

Bredesen said the plan is in keeping with his desire to protect children in TennCare reform. "It might not be the level of care we want to provide, but it's the level of care we can afford without bankrupting our state. We're putting limits into what has been the most generous healthcare program in the nation."

Bredesen said the state could still maintain limited care for some enrollees losing coverage if it succeeds in challenging legal constraints that attorneys have placed on the program over the years.

The governor also announced that TennCare is taking initial steps toward returning to a managed-care model that will require managed-care organizations, more commonly known as HMOs, to assume more financial risk in the delivery of benefits.

Managed care was dropped from TennCare in 2002 in an effort to stabilize the program at a time when HMOs and MCOs were collapsing. The state says it will insist on additional risk for MCOs as it gains relief from longstanding legal constraints.

The state is filing documents in federal court Monday as part of its effort to implement reform. Officials are also pursuing a range of other cost-savings measures, including new care and disease-management practices that will improve the quality of care while reducing costs.

"No enrollee will lose coverage overnight," Bredesen said. "We'll give as much advance notice as possible."

The process of notifying enrollees about changes could begin as early as March and changes could begin taking effect by April, pending federal approvals. Conversion to basic TennCare is expected to be mostly complete by 2006.

Under basic TennCare, children won't be subject to benefit limits or enrollment reductions. However, adults eligible for Medicaid will be subject to medical and prescription-drug benefit limits, similar to those found in other states' healthcare programs.

Bredesen said that despite reductions in adult benefits and enrollment, Tennessee will still provide more extensive healthcare coverage than nearly 40 other states.

After the changes are complete, the state says at least 75 percent of TennCare's 1.3 million enrollees will continue receiving healthcare coverage.

Under the return to Medicaid that Bredesen contemplated in November, the state would've removed as many as 430,000 enrollees, including 112,000 children. That would've left only 68 percent of TennCare enrollees with healthcare coverage. [ TennCare to dissolve ]

But later in November, the governor said he wanted to give TennCare another try, although he called it the most difficult problem he's ever confronted.

Bredesen said Monday that he proposed two compromise plans to the Tennessee Justice Center's Gordon Bonnyman after his announcements in the fall. He said Bonnyman never negotiated or presented any alternatives.

According to the governor, after TennCare coverage is reduced it will be about 75 percent of its current cost.

The revised plan will generate at least $575 million in cost savings for the state in the upcoming fiscal year, according to the governor's web site.

Bredesen was in Washington last week meeting with the federal Center for Medicare and Medicaid Services, which needs to approve any changes in the plan since it covers about two-thirds of TennCare's cost.

TennCare started in January 1994 as an experiment to expand Tennessee's Medicaid program by using managed care principles to deliver health care to a larger number of people for the same amount of money. But the governor's office has said says that from its inception, TennCare has been beset by problems and cost overruns.

The Associated Press contributed to this report. Portions copyright 2005 by The Associated Press. All rights reserved.