“Let’s Celebrate, not Decimate, Medicaid Rally” by ProgressOhio is licensed under CC BY 2.0

Tennessee is attempting to become the first state to fund Medicaid through a block grant with the passage of House Bill 1280 on May 2.

A block grant would fix the federal dollars allotted to the state’s Medicaid program, known as TennCare, which provides healthcare coverage for low-income pregnant women, children, the disabled and elderly. Republican lawmakers were emboldened to pass the legislation, thanks to the Trump administration’s promise to give states more flexibility to run Medicaid programs, but that flexibility hasn’t been explained. Trump also proposed cutting the federal Medicaid budget by $1.7 trillion over the next 10 years.

Of the 89.6 percent of Shelby County residents with health insurance, 21.4 percent are on TennCare, according to information from DataUSA.io. Approximately 20.8 percent of county residents live below the poverty line and couldn’t afford increased health care costs or a loss of coverage. Shelby County in 2015 had the highest rate of uninsured residents in the state; in 2017, 10.4 percent of county residents were uninsured.

The bill next goes to a Senate committee vote, and Gov. Bill Lee has said he will sign it. The law gives the state six months to develop a plan, submit it to the federal government, then get the Legislature’s final approval of the agreement. The soonest TennCare’s funding could change would be mid-2020, said Keila Franks, field director with the Tennessee Justice Center.

“That assumes that a block grant is legal, which is unlikely,” Franks added, explaining that in 2017, Congress failed to pass a bill allowing states to use Medicaid block grants, so it’s “premature to assess the legality” of Tennessee’s proposal. Other state services, like education, could suffer from decreased funding to cover TennCare. This disproportionately affects the poor, who can’t afford options such as private schools.

Five things about the block grant proposal you need to know …

1 TennCare’s budget would be set by the federal government no matter the number of enrollees. Currently, TennCare is paid for by $7.5 billion in matching federal funds based on the number of enrollees — funding that has no limit, so TennCare is free to grow as more residents qualify. A block grant would cap federal funds for the program, meaning it may decrease in size. “As Shelby County’s largest underserved primary care provider, the federal block grant could increase the number of uninsured Tennesseans, said Shantelle Leatherwood, chief executive officer for Christ Community Health Services. “If that occurs, our organization will see an increase in our uncompensated care revenue gap, which currently is over $6.7 million. It is our mission to provide healthcare regardless of an individual’s ability to pay; however, an increase in uninsured Tennesseans could significantly impact our ability serve.”

2 The per-enrollee spending amount likely couldn’t be adjusted under a block grant. According to Data USA, TennCare spends $5,677 per enrollee. From 2013 to 2014, that amount grew by 3.74 percent, since the current system is also built to handle increased health spending. A block grant could change that.

3 Taxpayers would end up picking up the slack if block grant funding isn’t adequate. Fields said a block grant would place a burden on all residents. “Capping federal Medicaid payments, which account for over 20 cents of every dollar in the state budget, will have an enormous impact on all state spending,” Franks explained. “That means there will be less money for education and other public services that are important to all Tennesseans.”

4 Numerous social justice and health care organizations have spoken out against this legislation. In fact, 30 groups signed a letter, sent to Lee, opposing the passage of this bill. Those groups include the TJC, The United Way of Tennessee and The YWCA of Middle Tennessee.

5 The GOP ramrodded this legislation through despite Democrats’ disapproval. Regardless of Democrat lawmakers’ demands for more information, the bill passed the House finance committee with virtually no discussion. State Rep. Antonio Parkinson expressed his opposition to the bill on the House floor, and U.S. Rep. Steve Cohen said he continues to support expanding Medicaid. “The block grant could mean no coverage for some people in need of care and the proposal willfully ignores the successful expansion of Medicaid programs in other states under the Affordable Care Act,” Cohen stated. “Members of the General Assembly should consider Medicaid expansion if they are truly concerned about improving access to affordable health care.”

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