Can Tennessee pass Medicaid expansion?
Flown in to Nashville Thursday from Washington, D.C., the panelists on stage at Vanderbilt’s John Seigenthaler Center could offer statistics, economic projections and examples to support the benefit of states adopting Medicaid expansion.
Roughly 300,000 uninsured adults in Tennessee — tens of thousands of whom are veterans — could be covered under TennCare, the state’s Medicaid program.
It would likely stem the tide of rural hospital closures, a phenomenon that has struck Tennessee harder than most states.
Insurance premiums could decrease for those on the private market, the panelists noted.
And the federal government would pay for almost all of it.
Despite the evidence presented proving successes in other states, those attending the forum were left with one gnawing, unanswered question. Why hasn’t Tennessee? Of the 32 states that have expanded their Medicaid programs, 17 had Republican-controlled legislatures.
But since the federal government in 2014 began covering at least 90 percent of expansion costs for states that adopted programs — which would amount to more than $1.2 billion in Tennessee — legislators in the state have declined to adopt one.
“We can’t allow our Republican lawmakers to say this is an issue of party loyalty,” said Gordon Bonnyman, staff attorney and co-founder of the Tennessee Justice Center, which sponsored the discussion along with The Tennessean.
Barbara Smith, a principal at the Washington-based Health Management Associates, suggested that it’s time for legislators to focus on the evidence about Medicaid expansion and consider the losses communities will face without health insurance.
“You don’t need to get into a discussion about whether or not healthcare is a right or privilege,” Smith said. “It doesn’t get you anywhere to have those conversations.
“You have to look at what the actual impact is on the community, on the state, on the nation by really being somewhat hogtied in terms of moving forward in the population’s health, increasing productivity and creating stronger communities.”
Tennessee second in hospital closures; Arkansas had none
Among the numbers that Smith argues speak for themselves are those pertaining to hospital closures, which she said leave the affected residents without access to care and sometimes hundreds without jobs.
According to a study by the University of North Carolina’s Cecil G. Sheps Center for Health Services Research, after Texas, Tennessee has the second highest hospital closure rate in the nation since 2010 and the highest rate per capita.
As rural hospitals close, their employees, in turn, will lose health care coverage, Smith noted.
“They’ve lost health insurance, they’ve lost their jobs, so as a result, they’re cutting back everywhere they can,” she said, referring to the strain on local economies as a result of job loss and stifled economic development.
While Tennessee has seen eight hospitals shutter in recent years, Smith noted that a state similar to Tennessee like Arkansas, which expanded Medicaid at the first opportunity in 2014, has experienced no hospital closures.
Andy Schneider, a researcher at the Georgetown Center for Children and Families who served as an adviser to the Center for Medicare and Medicaid Services during Barack Obama’s presidency, acknowledged that there are other factors at play in rural hospital closures, but broader coverage of Medicaid for residents in those areas would help.
“Medicaid expansion is not going to solve every single problem in the state of Tennessee,” Schneider said. “It will not keep every rural hospital open. But it will make a huge difference.”
Medicaid expansion could lower insurance premiums
Another benefit of expanding Medicaid coverage, Smith said, is the potential for private insurance premiums to decrease.
“The poorer you are, generally the worse your health status is as a population group,” Smith said.
Because Tennessee hasn’t expanded Medicaid, adults making up to 138 percent of the poverty level — which comes to $16,643 for an individual and $28,700 for a family of three — can qualify to receive subsidies for insurance plans through a state’s Health Insurance Marketplace, though the out of pocket cost can still be cost prohibitive.
“What that means is the risk pool in the Tennessee exchange is worse than the exchange in a comparable state that has expansion,” Smith said. “And that means premiums go up in the exchange.”
Smith says the converse is true: When a population of people experiencing more health problems due to their income level are removed from the private market and can be enrolled in TennCare, she believes premiums will subsequently lower for everyone else.
“It’s not just a gift to poor people, as some people think of it,” Smith said.
There’s a way to cover Tennessee’s share of Medicaid expansion cost
While federal funding for Medicaid expansion began at 100 percent, it still pays for at least 90 percent of the costs for services for those covered under expansion programs.
For 2019, Schneider said, that means 93 percent of costs.
April Grady, director of national health care consulting firm Manatt Health, said that while 10 percent of the cost can still be substantial for states, others have found ways to cover expansion, sometimes in its entirety.
“You’d be able to do expansion without using any new state money,” Grady said.
An assessment on hospitals is one of those ways, such as in Virginia, where hospitals committed to accepting a provider tax that would cover the the state’s 10 percent match for expansion.
Following a five-year-battle, Virginia’s majority Republican legislature voted in late May to expand Medicaid coverage for 400,000 people in the state,
How can Medicaid expansion happen in Tennessee?
Garrison Johnston, a Vanderbilt University mechanical engineering doctoral student, was those watching the panel Thursday and asking how other Republican-controlled states have managed to expand Medicaid.
“What happened politically there?” Johnston asked the panelists. “What can we learn from as we try to get our state to have Medicaid expansion?”
But in Virginia, Smith noted, the vote to expand Medicaid came only after the Republican majority in the state’s House of Delegates narrowed to just a 51-49 margin in last year’s elections.
When the topic first came up in Virginia and the GOP had a stronger hold on the House of Delegates, some Republicans initially supportive of Medicaid expansion withdrew their support under political pressure.
“Then there was this wave election at the state legislative level in 2017,” Smith said.
Republicans lost 15 seats to the Democratic Party.
“Medicaid was the primary driver, and they were able to get it through with that,” Smith said.
“Elections help.” Reach Natalie Allison at nallison @tennessean.com.