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Tennessee Releases More Details About Medicaid Expansion Plan

By Rebecca Adams, CQ HealthBeat Associate Editor

January 8, 2014 -- On the eve of a visit from President Barack Obama, Tennessee GOP Gov. Bill Haslam released more details of his plan to expand the state's Medicaid program. The governor said he would devote a special legislative session in February to debate the proposal.

About 200,000 Tennesseans would gain coverage through the expansion, according to an 11-page waiver request that Haslam released last week.

Under the plan, Medicaid recipients who are 21 to 64 years old would have a choice of two options. One, known as the Healthy Incentives plan, is essentially regular Medicaid benefits with new cost-sharing requirements and a health reimbursement-type account that rewards people for healthy behavior. The option would be available to people who are considered medically frail.

The state would provide some money for the health reimbursement-type account and enrollees could earn more by participating in activities such as health risk assessments.

People with income below the poverty level could use the accounts to pay for copayments and would not have premiums. People with income above the poverty level would have to pay premiums of roughly $20 per month and copays that vary by the type of service.

The second option, known as the Volunteer Plan, would be a premium assistance plan. The state would subsidize insurance for the working poor, which in the first year would be limited to employer-provided insurance. Employers must cover at least half of the premium cost.

People who are 19 and 20 years old would get coverage through the regular Medicaid program because they are still considered children.

The proposal includes a commitment from the state's hospitals to pitch in with a higher provider tax if needed to ensure that the state does not have to contribute any money to the effort.

The governor said the special session would begin on Feb. 2.

"There are few challenges facing us today as great as those presented by our broken health care system," Haslam said. "The Insure Tennessee plan is a conservative approach that introduces market principles to Medicaid, provides health care coverage to more Tennesseans at no additional cost to taxpayers, and leverages a payment reform initiative that is working to control health care costs and improve the quality of care. I believe this plan is a critical first step to fundamentally changing health care in Tennessee."

The administration applauded the announcement.

"The department has had productive discussions with Governor Haslam, and we look forward to the state submitting its plan to give low-income Tennesseans new options for health coverage," said U.S. Department of Health and Humans Services spokesman Ben Wakana.

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