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Medicaid Expansion Defeat in Tennessee May Have Ripple Effect

By Rebecca Adams, CQ Roll Call

February 5, 2015 -- The Tennessee legislature's recent early defeat of GOP Gov. Bill Haslam's plan to expand Medicaid to 280,000 residents may provide ammunition to opponents of expansion in states such as North Carolina, Florida, and Utah.

Haslam had called a special session devoted to expanding Medicaid that started early last week. The plan died in the state Senate Health and Welfare Committee, which voted it down by a 7–4 tally after one undecided lawmaker and one lawmaker who had planned to support it voted no.

Some legislators last week predicted the plan would pass that committee but die in one of the House committees also slated to consider it. Several members of the Insurance and Banking Committee opposed it. House Speaker Beth Harwell, a Republican, also expressed doubts about passage in the full House.

The quick loss means chances of reviving the issue this year are slim.

"There are hundreds of thousands of Tennesseans who need health care, who could get that in a way that doesn't cost the state anything," Haslam said after the vote. The federal government will pick up all of the costs of the people who qualify under expanded eligibility guidelines through 2016 before phasing down down its share to 90 percent of costs starting in 2020 under the health care law (PL 111-148, PL 111-152).

The image of a popular governor who was just re-elected losing on the issue that he singled out for his first-ever special session may cause other GOP governors or legislators to hesitate pushing for expansion. North Carolina Gov. Pat McCrory, who told President Barack Obama earlier this year that he is open to expansion, said in a speech to legislators this week that any Medicaid plan "must require personal and financial responsibility for those who would be covered."

In Florida, Gov. Rick Scott had endorsed the idea in previous years but never pushed for it in the face of resistance from legislators. Other states weighing expansions include Utah, Wyoming, Montana, and Idaho.

Americans for Prosperity, a conservative advocacy group, and other conservative critics such as the Beacon Center of Tennessee actively worked against expansion. Americans for Prosperity also campaigned against expansion in states such as Virginia, where Democratic Gov. Terry McAuliffe has been unable to persuade legislators to back the idea of covering more low-income people. In Tennessee, opponents of expansion wearing red T-shirts swarmed around the state capitol.

Americans for Prosperity did not respond to a request for an interview.

Some legislators demanded that the federal government and the state government sign an agreement before the legislature considers it. Others said they thought that the program would be too expensive and that ultimately, the state would have to pick up some costs. The special session opened with a prayer from a conservative critic of the plan, June Griffin, who said, "Oh, Lord, save Tennessee for Jesus' sake, and I pray that your will would be done that you would be our coverage, that we would not be forced into these edicts from Washington, D.C."

Hospitals and other medical providers are major advocates for providing coverage to more people, but the testimony of hospital officials did not sway Tennessee legislators.

The Tennessee debate "reveals how political this is rather than just based on policy," said Diane Rowland, executive director of the nonpartisan Kaiser Commission on Medicaid and the Uninsured, who said that the outcome "could affect other states." 

"If you've got deep rooted ideological viewpoints it'll be hard to overcome them with facts," she added.

Three-Way Fight

After the Supreme Court in June 2012 gave states more power to reject expansion, some health policy experts thought that the biggest challenges would be in creating agreements between governors and the Centers for Medicare and Medicaid Services (CMS). But the fight that some state legislatures are posing shows that a Medicaid expansion framework is truly a three-way negotiation.

"Many of the legislatures have a lot of reservations so it just shows you what an uphill climb it can be in some of these states," said Rowland.

However, Rowland added that state officials also are hearing of positive experiences and economic benefits from expansion. So far, 28 states and the District of Columbia have broadened eligibility for the program for the low-income. Ten of those are led by Republican governors.

One of those was in Indiana, where Gov. Mike Pence recently got approval from CMS to waive many rules as part of the expansion. One Tennessee official has said that the timing of the Indiana approval was not helpful, because legislators were able to see that Pence had gotten more concessions from federal officials than Haslam had. 

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