TENN TAX BATTLE: HIT-OR-MYTH 'FIXERS' SET THEIR SCOPES ON TENNCARE

NASHVILLE - "Just fix TennCare" has become a popular rallying cry for the state's legislative and gubernatorial campaigns, with candidates from both parties using a blend of fact, supposition and myth about the $5.4 billion health program.

TennCare, which provides health insurance for the state's poorest residents, makes an easy target for political rhetoric because of its size, complexities, management problems and the pervasive belief - disputed by the state's budget experts - that "fixing" TennCare would end the state's financial problems.

"I get so tired of hearing that," said House Finance Committee chairman Matt Kisber (D-Jackson), one of TennCare's most persistent critics on the Hill. "If you think there was a way to 'fix TennCare' that would correct the state's budget problem, don't you think all 99 members of the House, the Senate and the governor would be leading the charge to do it?"

Tennessee received a waiver from the federal government in 1994 to replace Medicaid with TennCare, a system of managed care. The current program is funded with $1.8 billion in state tax dollars. The rest comes from the federal government (about $3.6 billion), premiums paid by those who aren't Medicaid-eligible ($53 million), and drug rebates.

In his campaign appearances, GOP gubernatorial hopeful Van Hilleary is campaigning on the idea that he could save $350 million in state funds by making TennCare "more like other states' Medicaid programs," and asserts that there are 100,000 to 200,000 people on TennCare who are ineligible for the program - numbers disputed by the state's TennCare Bureau.

"I think we can restructure TennCare enough to get us back to budget stability again so we can move on," Hilleary told Capitol Hill reporters recently. "Let's just take the 100,000 to 200,000 on TennCare who aren't eligible for TennCare."

Hilleary has been traveling across the state with a chart titled "TennCare: Federal help we can't afford." The chart shows the state funding level of TennCare from 1993 through the current fiscal year, measured against a trend line showing what the growth in TennCare would have been if its growth had followed the growth trend of other states' Medicaid programs.

The graphic indicates that if TennCare's growth rate had followed the national rate of Medicaid growth, the state's share of TennCare spending would be $350 million less than it is now. But the chart, like most such TennCare vs. Medicaid comparisons, is inaccurate because TennCare is different from every other Medicaid program in the country. The chart also compares two different measures of cost against each other: overall federal Medicaid spending growth vs. Tennessee's state tax spending growth on TennCare.

TennCare director Mark Reynolds said that the best available apples-to-apples comparisons show that TennCare's growth has "only slightly exceeded the national average," but that Tennessee's TennCare growth has been equal to that of its neighboring Southeastern states.

TennCare is different from Medicaid programs in several key ways: It covers Tennessee's 1 million Medicaid-eligibles, plus about 400,000 people who are uninsurable or uninsured but not Medicaid-eligible. And although many states now have Medicaid expansions for the working poor and for uninsured children, TennCare is by far the largest expansion of Medicaid in the nation.

TennCare's per capita cost for its health services program is the lowest in the nation - $3,104 per person per year compared to $3,926 in Arkansas, the second-lowest.

"If we were to be like other states, at a cost like the other states, it would cost more than a billion dollars more," said Rep. Gene Caldwell (D-Oak Ridge), a retired pediatrician who is chairman of the TennCare Oversight Committee. "TennCare has problems, nobody denies that, but it still saves us a lot of money."

TennCare's global budget also includes the state's $400 million nursing home program and $200 million that supplements the state's mental health, mental retardation and children's services programs as well. It also pays for prescription drug coverage and some other benefits for 187,000 eligible Medicare enrollees.

From its beginning in 1994 through 2001, TennCare cost Tennessee less than a Medicaid program would have, even though it insured far more people, said state Comptroller John Morgan, who estimates the state would have spent a total of $1.2 billion more during that time if it had stayed in Medicaid. It was the state's effort to fund TennCare on an actuarially sound basis in 1999 that pushed TennCare's costs up above what a Medicaid program would have spent, Morgan said.

In a recent press conference, Hilleary said one of the TennCare reforms he would institute is premiums based on ability to pay. "We don't do that in this state," he said. In fact, TennCare has been charging premiums since its inception, but only recently began large-scale re-verification that checks enrollees' income and access to other insurance.

By contrast, the other major candidates for governor all speak of the need to improve TennCare's management and technical systems, and praise Gov. Don Sundquist's proposed rewrite of the federal TennCare waiver.

Republican contender Jim Henry has been critical of Hilleary's statements, noting that a reduction of $350 million in state spending would remove $680 million in matching federal funds from the state's medical economy. Democratic contender Phil Bredesen has said TennCare's management and oversight problems must be corrected, but doesn't see that doing so would save much money.

A recent audit by the Comptroller's Office is likely to add more fuel to the TennCare rhetoric, including the perception that TennCare is covering large numbers of people from out-of-state who sign up for the program illegally by falsifying an address or by using post office boxes. TennCare Bureau officials say they've culled the rolls of some out-of-state abusers, but they don't believe the problem is widespread.

"We have put a whole lot of energy into finding out-of-state enrollees, and in the investigations we've done, most of them turn out to be eligible (for TennCare)," Reynolds said. Federal law allows people to claim benefits of their home state's Medicaid program even while they're living somewhere else temporarily, so TennCare can't automatically terminate out-of-staters.

TennCare Bureau officials also dispute the audit finding that 19,959 TennCare enrollees have out-of-state addresses. Reynolds said that a preliminary computer search last week showed only 8,852 such enrollees.

The audit also found that more than 130,000 listed post office boxes instead of street addresses, and TennCare officials said they're trying to research that finding on the program's antiquated computer system to see whether those individuals list street addresses as well. Post office boxes are commonly used by those who don't have a reliable street address, including the homeless, those in rural areas with no home delivery, and those in mental health or retardation facilities.

Hilleary said he didn't know where he had gotten the 100,000 to 200,000 estimate, but it might be an extrapolation from testimony by Asst. Finance Commissioner John Tighe. Tighe told state officials this year that "about 20 percent" of the non-Medicaid TennCare enrollees in reverification were being dropped from the program.

TennCare officials have removed about 60,000 people from the TennCare rolls since reverification started in December, and started the process with those they deemed most likely to be ineligible - people who were late on paying premiums, hadn't accessed services in a long time, or haven't responded to TennCare mailings. But Reynolds cautioned that it's a mistake to assume that all those removed are or were ineligible - it may be that they simply haven't responded to the reverification letters, he said.

Another popular myth is that TennCare benefits are much better than the Medicaid benefits of other states. Most Medicaid benefit levels are set by the federal government, so states have little leeway to change them. According to the state's actuarial firm, PriceWaterhouseCoopers, TennCare's benefits are in line with the benefits of other states' Medicaid plans.

Sundquist's TennCare waiver proposal already incorporates many of the reform ideas some gubernatorial candidates are touting, including a reduction in the non-Medicaid benefit levels, a medical definition of uninsurability, a residency requirement, and other changes.

Sundquist's plan, still under review by the federal Centers for Medicaid and Medicare Services, would continue Medicaid-level benefits for Medicaid-eligible people but would dramatically reduce benefits to TennCare enrollees who are not Medicaid-eligible, giving them coverage that closely resembles a commercial insurance plan. The numbers of those covered by Sundquist's plan would depend on the amount of fund ing from the General Assembly.

Tennessee General Assembly: http://www.legislature.state.tn.us/ click here On the left side of the page are these choices: Information, Senate, House, Joint, Bills and Other Links. These options should get you to any information you need including office numbers, phone numbers, email addresses, committee assignments, legislative bills, etc.

Toll Free calling 1-800-449-8366 + extension or call the switchboard at (615) 741-3011.

It bears remembering that Tenn established TennCare to avoid HillaryCare. This program was established when it appeared national health care, aka, HillaryCare, was the wave of the future. In other words, this would be a nationwide problem had Hillary had her way.

"If you think there was a way to 'fix TennCare' that would correct the state's budget problem, don't you think all 99 members of the House, the Senate and the governor would be leading the charge to do it?"

Absolutely not. Liberals would much rather let the government come crashing down around them than make responsible cuts in spending. Witness Medicare, which the Republicans tried to reign in to keep it from going bankrupt. The were destroyed by President Clinton adn Dems in Washington.

In Texas we are having budget problems of our own.

The legislators and the govenor have made a risk assessment concluding that they will lose fewer votes raising taxes than they will by fixing TennCare.

"The legislators and the govenor have made a risk assessment concluding that they will lose fewer votes raising taxes than they will by fixing TennCare."

And, in so doing, they employed some very clever factoring that sets the threshold for PAYING this tax just slightly higher than the annual income of 96% of all the state employees in TN. It's the ultimate tax on THEM (or the tax on "that guy standing under the tree over there..."

Never forget the Dems' definition of "rich" - it's any person who makes as little as one dollar MORE than YOU do.

Michael

You made some good points and came, oh, so close, to the correct definition of "rich". Anyone who makes more than a government employee is "rich".

Good point but Sundquist is no Clinton. Slick Wille & Dick Morris were able to make the Republicans look like the bad guys. Our Governor and legislaors have none of that magnetism. To the contrary, the anti-tax leaders seem to be the most polished and popular in this case.

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