Clarksville, Tenn., July, 2016– What if there was a better way to spend your tax dollars to provide health care insurance for the poor? By every assessment, the existing Medicaid program, while efficient in capping some costs due to its power of scale, is ineffective in providing care with incentives to change unhealthy behavior, something that commercially available health insurance offers.
There is a better solution — the TennCare Opt Out program. But, first, a quick reminder of how Tennessee arrived with TennCare.
TennCare was conceived on June 16, 1993, as Gov. Ned McWherter released the application for a waiver to the federal Medicaid program — the entitlement program administered at the state level to fund health care insurance for the poor.
TennCare was drafted as an executive program enacted without legislative input or a single vote that would terminate Medicaid and launch a “managed care program that would cover virtually every uninsured Tennessean,” according to the book “Medicaid Reform and the American States: Case Studies on the Politics of Managed Care,” which includes the history of TennCare.
While TennCare looked good on paper, operational realities ballooned the numbers of covered individuals receiving taxpayer-funded insurance, which ultimately began draining our state budget of money to be spent on education, job creation and infrastructure such as roads. As far back as 2004, then-TennCare Director J.D. Hickey testified that the $8.7 billion TennCare budget was going to come up $132 million short as more taxpayer money was sought for funding.
The Heartland Institute, a nonprofit devoted to free-market solutions, noted in a 2005 analysis that “TennCare is the largest state Medicaid program in the U.S” and served as the 1994 pilot “to implementing ClintonCare” which then-President Bill Clinton pushed.
Boiling the managed care insurance down to its bare essence, TennCare was to incorporate “universal coverage and single-payer goals into the state’s Medicaid system,” which was predicted to be “difficult to maneuver, difficult to finance and perhaps impossible to reform.”
So, even after Gov. Phil Bredesen was forced to cut more than 320,000 from the program to prevent its insolvency by 2006, why are we still talking about a potential expansion of a program that, while it caps costs, offers no incentives to those enrolled to shop around for the best prices and, most importantly, adopt healthier lifestyles?
The rules of Medicaid limit the prospect of using carrots and sticks to encourage improved health habits. The carrots of rewarding the cessation of tobacco use or using a less costly health provider work in the world of commercial insurance and health savings accounts.
In those situations, higher co-pays or increased premium charges assessed to those who refuse to embark upon reasonable improvements regarding smoking and weight loss can motivate healthy lifestyles and reduced costs.
A free-market, consumer-driven solution is in the works with a waiver submitted to the Centers for Medicare and Medicaid for a small pilot: the TennCare Opt Out. Senate Joint Resolution 88, now law, was a bill I sponsored and worked on for two years. It will allow a group to voluntarily exit the existing program, receive an EBT-type card to cover approved health benefits and to shop for their best providers at the best cost.
Any funding unspent is kept by the consumer through an earned income tax credit. Providers are paid at the point of care to avoid long reimbursement delays and encourage participation in the care network.
With this plan, patients make the choices and are incentivized to save and improve their health care costs. In fact, studies show people on similar programs saved 7 percent to 9 percent compared with those on traditional insurance.
Nine percent of the TennCare budget saved would equal more than a billion dollars. That would allow for the addition of 225,000 covered lives to our current program without any increase in funding from the state or the federal government. Clearly, reversing the incentives with a free market solution is the only answer.
As the 23rd anniversary of the conception of TennCare arrives, let’s make sure we don’t grow failing programs, whether they’re called Obamacare or TennCare, and instead, let’s replace them with those that incentivize personal responsibility while being good stewards of your tax dollars… Read more from The Tennessean.