Tennessee Lawmakers Suggest Medicaid Reform Alternatives

Published November 21, 2016

Editor’s Note: Health Care News asked Tennessee state Sen. Mark Green (R-Clarksville), state Sen. Kerry Roberts (R-Springfield), and Beacon Center of Tennessee Director of Policy Lindsay Boyd to suggest creative, market-based reforms for TennCare, the state’s Medicaid program. (See article on p. 6.)

‘Reverse the Incentives’

Green: We have to reverse the incentives in health care, and we have to insert free-market decision-making. We need a program that does both. My [Senate Joint Resolution] 88 has the effect of a [health savings account] but without rolling the benefits forward. The TennCare patient population will be more incentivized by the cash check, but probably not by a savings account. 

Since HSAs save between 7 and 9 percent, assuming a 7 percent savings in the nearly $12 billion TennCare budget would create $840 million in savings. Assuming a 9 percent savings would yield $1.08 billion. Since we spend about $5,000 per recipient, that would allow us to provide health care to 168,000–216,000 more patients without a single penny added to the federal deficit.

Direct Primary Care

Roberts: Last year, we passed one of the most significant pieces of health care legislation in direct primary care. I’m struggling to understand why direct primary care isn’t in this discussion. In my opinion, the best solution is to enroll a test group of our TennCare population into direct primary care clinics and evaluate the outcome. People who receive regular primary care are likely to have better health outcomes at lower cost to the taxpayer.

Direct primary care is an undeniable free-market solution that works. If we pursue direct primary care not only for our TennCare population but also our state employees, Tennessee can lead the nation in lowering the cost of taxpayer-funded health care while improving the health and well-being of our citizens. It’s an obvious solution being overlooked by those intent on expanding Medicaid.

Enforceable Cost-Sharing

Boyd: We would like to see the state pursue a tightly defined 1332 waiver for the current Medicaid population that would free the state from costly, mandated wraparound benefits to pursue a more cost-effective and tailored approach to providing essential benefits. Under such a waiver, there would be enforceable mandatory minimum co-pays, premiums, and job-seeking or employment provisions.

Additionally, [health savings accounts] and direct primary care agreements would be made available and partnered with a high-deductible catastrophic plan. Likewise, those individuals across the state, whether on TennCare or uninsured, who enter into a direct primary care arrangement would be exempt from the [Affordable Care Act’s] individual mandate.

We would also explore a CoverTN model, which phased out when the ACA passed. An improved CoverTN could offer incentives to employers providing benefits through the private market. The state, employer, and individual could each pay one-third of the costs and plan to transition that working recipient off the state rolls.

Jordan Finney ([email protected]) writes from Boise, Idaho.

Internet Info:

Dustin Siggins, “Tennessee Lawmakers Offer Direct Primary Care as Alternative to Medicaid Expansion,” Health Care News, The Heartland Institute, May 2016.

“A Comprehensive Package to Reforming Healthcare,” Beacon Center of Tennessee, November 2015.