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Tennessee lawmakers decide against Medicaid expansion in 2015

February 6, 2015

Some time ago, big news hit the state of Tennessee, especially for the region’s underserved populations living near or below the poverty line. The governor, Bill Haslam, announced that the state of Tennessee would accept the federal government’s Medicaid expansion offer. The governor soon announced an “Insure Tennessee” plan which was rolled out before members of the public and the elected government alike.

According to the plan, some 280,000 low income citizens of the state would gain medical insurance. Apparently, the state would come out of the deal with a net financial gain, as well. This was due to the fact that most of the costs associated with the deal would be covered by the federal government. State hospitals also made a splash when they announced that, should the plan be made into law, they would step up and cover the remaining costs themselves. The plan looked to be a major win for the state. In fact, the state government itself would be required to pay the sweet cost of nothing.

Surprise struck again on Wednesday, when state lawmakers voted to kill the entire deal and refuse the federal government’s Medicaid offer for the foreseeable future. To be clear, however, this ‘vote’ was from a select senate committee tasked with evaluating the merits of the package, and it is possible that the bill could still be moved forward with the help of the governor. Even if this attempt is made, however, some members of the state legislature have already registered their opposition. In short, the battle that Tennessee would have to fight to revive its Medicaid expansion prospects is a long and difficult one.

It’s worth asking, then, “Why was the proposal rejected in the first place?” Unfortunately, it appears that squabbling along party lines – a common theme at all levels of government – may have been to blame for the deal’s breakdown.

GOP lawmakers have stated that, while the deal seems good now, the state could potentially be locking itself into a deal with a federal government whose terms change over time. At that point, it may find itself too deep to back out. Noteworthy, then, is the fact that federal government has explicitly stated that participation is voluntary, and that a state can choose to roll back the changes if they so desire. The counterpoint from one Tennessee CEO opposed to the plan: “Can you trust the federal government?”

While this may not sum up accurately the senate panel’s reasoning, it’s hard to see where else they drew their notions of potential negative impact. Unfortunately, that mindset could end up costing the state bigtime, and leaving nearly 300,000 of its citizens uninsured and in an abysmal situation. Hospitals as well, whose lobbying bodies supported the deal, will continue to face budget hardships as a result; hospitals were projected to come out on top if the deal were to go through, even though they offered to pay for part of it themselves. This is presumably because the federal funding would be covering those they have to serve each year that are uninsured and cannot pay back their treatment costs out of pocket.