The first Extraordinary Session of the 109th General Assembly adjourned on Wednesday after three days of legislative deliberations on Governor Bill Haslam’s Insure Tennessee proposal. The action to adjourn came after the Senate Health and Welfare Committee voted 7 to 4 against giving the Governor authorization to enter into a contract with the federal government to expand the number of Tennesseans eligible for Medicaid or healthcare benefits which are available under the Affordable Care Act, also known as Obamacare.
Senate Joint Resolution 7001 would have given the Governor authority to implement TennCare Demonstration Amendment #25, which is a waiver amendment request to provide services to “newly eligibles” between the ages of 19 and 64 with family incomes that do not exceed 138 percent of the federal poverty level. Legislative authorization on the Insure Tennessee proposal was required under a law passed by the General Assembly last year.
The Legislature’s Fiscal Review Committee, which is responsible for analyzing the cost of all legislation with a financial effect on state government, released an analysis on Tuesday showing the Insure Tennessee proposal would increase state spending by $7.8 million in the 2015-16 budget year, $43.6 million in the 2016-17 budget year and $46.2 million in the 2017-18 budget year. It also showed it would increase federal expenditures by $675.3 million in 2015-16, $1.4 billion in 2016-17 and $739 million in the 2017-18. Although the federal government would fund the vast majority of the program, concerns were expressed about the impact the proposal would have on the national debt which now stands at $18 trillion.
Other key concerns expressed by state senators opposing the plan included the absence of a final legal agreement that would bind the Obama administration to provisions in which federal representatives had verbally agreed to in their talks with Governor Haslam’s administration in preparation of the waiver. Of particular concern was the ability of Tennessee to opt out of the program without legal repercussions or loss of federal funding.
In 2005, state lawmakers worked to rein in the escalating cost of TennCare to the state budget from 33 percent to 25 percent due to its negative impact on other critical areas which need funding like education and public safety. There were, however, legal hurdles to that disenrollment. That cost is now back up to 33 percent due to mandates from Washington.
In the 1979-1980 budget the total cost of TennCare was $116 million. The state now puts in more than that amount on an annual basis in just the increased costs, which has averaged $187 million per year over the past four years.
Another key concern for committee members voting against the plan was the number of enrollees projected to be eligible for Insure Tennessee. The original projection in December of 200,000 enrollees has been increased by 20 percent to 280,000. The Bureau of TennCare has stated enrollment is estimated to be 307,600 by the 2017-18 budget year, with other healthcare experts anticipating that population could be as much as 400,000.
In addition, while initially intrigued by some of the free-market aspects of the governor’s plan, many Senators expressed concern that providers would have little incentive to enforce the co-pays in the Volunteer Plan. This would effectively eliminate a key-cost saving measure cited by proponents of the plan.
This year’s Extraordinary Session was the 58th special session in the history of the state. The most recent Extraordinary Session prior to this year was in January 2010, and focused on education.