by Joe Sullivan
TennCare remains a whipping boy for all that ails the state financially. And the need to dispel the popular perception that the program is rife with costly abuses becomes all the more crucial at this time for several reasons.
For one, any renewed, post-election attempt at tax reform on the part of Gov. Don Sundquist is all the more likely to founder unless it's evidenced that TennCare spending has been brought under control. At the same time, TennCare's very existence is being threatened by resistance on the part of doctors and hospitals to continued participation in health-care provider networks that are integral to the program. And this resistance is based is no small part on provider complaints that they are getting shortchanged under TennCare reimbursement rates for treating patients who should be covered by commercial health insurance plans that typically pay 50 percent more.
The man who oversees TennCare, Deputy Commissioner of Finance and Administration John Tighe, has estimated that on the order of 50,000 of the beleaguered program's 1.3 million enrollees are probably ineligible. Tighe is also clear that higher-income enrollees who remain eligible should be paying substantially higher premiums for their coverage than at present.
So why hasn't the state proceeded to purge the rolls and raise premiums in order to bring credibility to the program? The answer is that a combination of court orders and inaction on the part of the federal agency that must approve virtually any changes in TennCare has thwarted the state at every turn.
When TennCare beefed up its eligibility reverification efforts earlier this year, the state's pre-eminent advocate for social service recipients, Gordon Bonnyman, sought and got a federal court order preventing terminations. The state's procedure had been to terminate anyone who failed to respond to three successive monthly letters requesting updated income and employment status including access to employer health insurance plans. There is no doubt merit to Bonnyman's contention that the state has been failing to comply with "federal due process regulations that guarantee notice and opportunity for an appeal." The largely indigent TennCare population is a fragile one with whom written communication is very difficult, especially in the case of the homeless and the mentally ill.
The fact remains, however, that about 500,000 of TennCare's enrollees got on the rolls, largely in the mid-1990s, because they did not have access to employer coverage at the time or were deemed uninsurable because of health problems. (The other 800,000 on the rolls qualify for the federally regulated Medicaid program for the indigent.) With the passage of time and ever-improving economic conditions, it seems likely that many of the previously uninsured now hold jobs with benefits. Moreover, under a 1996 change in federal law, employers with health plans are now required to offer unrestricted benefits to all their workers without regard to their medical condition.
Removal of Tighe's estimated 50,000 ineligibles from the rolls would cut $100 million from TennCare's $5 billion annual cost. Because federal matching accounts for nearly two-thirds of TennCare funding, only $35 million of the savings would come out of the state's $1.7 billion share of the total. But this would still represent a meaningful step toward allaying concerns that the program is out of control. Surely, due process considerations can be satisfied in order for reforms to be achieved in a timely way.
The two-to-one federal match also represents the power of the purse that gives the federal Health Care Financing Administration sway over just about any changes in TennCare. For more than a year, the state has been seeking HCFA approval for increases in the premiums TennCare charges enrollees with incomes in excess of the federally-set poverty line. Only recently, Tighe reports, has HCFA even begun to consider the state's proposal by way of asking questions. Under the proposal, TennCare premiums would go up by 30 percent to 40 percent on a sliding scale based on household income. Moreover, co-payments would be set for all medical services, including prescription drugs, thus establishing the principle that nothing should be free.
Since almost 90 percent of TennCare's enrollees are below the poverty line, the higher premiums and co-pays might only generate about $10 million annually. But they become crucial in establishing another principle: namely, that higher-income individuals who remain eligible for TennCare as uninsured should start paying the full cost of their coverage.
All of this is not to say that the costs of TennCare won't continue to keep rising, along with the costs of health care generally. By most reports, double-digit increases in commercial health insurance premiums will be the rule next year, driven up primarily by escalating prices and use of prescription drugs. Tighe projects TennCare increases in the fiscal year ahead of no more than 8 percent. But even this would represent a $130 million increase in state outlays, contributing to a budget bind that promises to be even starker than the one that faced the state this year.
The only thing that's starker is the prospects if the four new managed care organizations lined up by TennCare don't succeed in building provider networks large enough to absorb the 600,000 enrollees currently covered by Blue Cross, which is in the process of withdrawing from the program. The four new MCO's have until November to show sufficient capacity, and if they fail to do so health care for the unfortunate in Tennessee could become a shambles.
This dire prospect makes it all the more imperative that steps aimed at building confidence in the program on the part of providers and the public proceed posthaste.
October 12, 2000 * Vol. 10, No. 41
© 2000 Metro Pulse
| 
