Metro Pulse/Insights/TennCare

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by Joe Sullivan

From having been a leader in the field, Tennessee is headed toward becoming one of the most laggard states in the country when it comes to providing health care for its less fortunate children. Under TennCare, up to now, children in households with incomes of less than 200 percent of the federal poverty line ($27,750 for a family of three) have been eligible for coverage. This entitlement is without regard to whether a working parent has access to an employer's health insurance. And since Congress enacted the Child Health Insurance Program (CHIP) in 1997, nearly every other state has made similar provisions, with Washington paying 75 percent of the cost.

However, proposed TennCare revampments that are soon due to be submitted for requisite federal approval would pull the plug on a significant number of these children. As is so often the case, TennCare overseers don't seem to have a handle on how many young lives would be affected. Identifying who they are requires an understanding of intricate TennCare eligibility standards that these officials might like to obfuscate. But the public needs to be aware of them before the plug gets pulled; hence, a somewhat tedious explanation follows.

There are about 550,000 children among TennCare's 1,450,000 enrollees, and they can be divided into two basic categories: (1) those for whom the federal Medicaid program mandates coverage and (2) about 210,000 otherwise uninsured children to whom TennCare has extended coverage. Medicaid mandates coverage to children (under age 19) in households with incomes ranging from 100 percent to 133 percent of poverty, depending on age. The uninsured category picks up children in households with incomes up to 200 percent of poverty, consistent with CHIP programs in most other states.

Where the state is now regressing is by proposing to cut off coverage to these uninsured children if a parent has access to an employer's health plan. Why not, you might say, since the entire revampment effort has been billed by Gov. Don Sundquist as curbing escalating costs by making TennCare "the health insurance program of last resort"?

The answer, pure and simple, is that employer-based coverage of their children is in no way affordable by parents earning $20,000 a year or thereabouts. Employers mostly don't contribute anything toward the cost of covering their workers' dependents (while typically paying half of an employee's premiums). With employee premiums running on the order of $200 a month, half of that plus a monthly premium of $100 or more for a healthy child adds up to at least $200 a month out of pocket. For someone making $1,667 a month ($20,000 a year), that's 12 percent of pre-tax income, which is unaffordable by any standard.

A rule-of-thumb in household budgeting is that health insurance costs shouldn't exceed 5 percent of income. That rule was embodied in the 1997 CHIP legislation that prohibits states from changing premiums and/or co-payments that add up to more than 5 percent of any covered household's income.

TennCare's overseer, John Tighe, often claims that the program's pending overhaul is based on the recommendations of a Sundquist-appointed Commission on the Future of TennCare. But that commission stressed that, "TennCare should cover children at least up to 200 percent of the federal poverty level and should cover children above this level if funds are available. Therefore, for a child in a household at least up to 200 percent FPL, who does not qualify for Medicaid, the state should provide premium assistance through TennCare Assist, or, in the absence of a qualifying employer plan, the state should enroll the child in TennCare Standard."

Under TennCare Assist, as proposed by the commission, the state would subsidize the cost of participation in employer plans for lower income households by paying a portion of the premium on an income-based sliding scale. But the Sundquist administration has put TennCare Assist on hold—at least until 2004. And the chairman of the Legislature's TennCare Oversight Committee, Rep. Gene Caldwell of Clinton, ventures that, "I don't think it will ever amount to much." That leaves only TennCare Standard, the moniker for a program that would house a culled set of TennCare enrollees not eligible for Medicaid and would offer lesser benefits than Medicaid. However, premiums for families with incomes in the 150 percent to 200 percent of poverty range would be a more affordable $70 a month.

Removing tens of thousands of less fortunate youngsters from the TennCare rolls would be a travesty. Learned journal after journal has stressed the importance of things like early and periodic screening, diagnostic and treatment (EPSDT) services for their present well-being and future development. Yet if they are excluded from TennCare, it's highly unlikely they will have a primary care physician assigned to provide those services.

Caldwell tries to minimize the number subject to exclusion. Of the 210,000 children presently classified as uninsured, he suggests that more than half may be eligible for Medicaid and went on the rolls as uninsured instead, because it has been easier to do so. Moreover, many of the rest may live in households that don't have access to employer health plans and would thus remain eligible. But as small as the number subject to exclusion will hopefully turn out to be, its lack of size is not a reason for lack of concern. To the contrary, the smaller the number, the less costly and hence the more compelling it becomes to cover them at a time when the state's financial plight must also be taken into account.

Tighe has turned off many legislative leaders of both parties with his defensiveness and dissembling about TennCare past, present and future. Now, he's seeking to slide the overhaul proposal through for submission to Washington in mid-December without any action by state lawmakers.

Next week's meeting of the TennCare Oversight Committee is crucial in this regard. While the committee doesn't have the authority to veto or even amend the proposal, it can certainly raise a ruckus and hopefully will do so.