Tennessee Goes First

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Tennessee is the first state in the nation to ask the government for a Block Grant  of Medicaid funding, where the fed will give a set dollar amount of to the state for Medicaid programs, including TennCare.  TennCare is Tennessee’s Medicaid health insurance program that is jointly funded by federal and state tax dollars.

In exchange for a set dollar amount of federal funding, Tennessee will gain more flexibility and management authority to better customize this health insurance program, to fit Tennessee residents, and potentially increase the program’s efficiency.

As Tennessee’s economy continues to improve, the federal share of funding is reduced and this will leave a $41 Million “hole” in the TennCare budget for fiscal year 2020.

Nationwide, the cost of Medicaid increased 4.9% in the last fiscal year.  While Tennessee’s Medicaid costs have increased less than the national average-  the state’s TennCare cost is still projected to increase 2.1%.  This will cause the people of Tennessee to need to find an additional $66 Million in their budget to shore up the loss of federal funds, increased healthcare costs, and increased enrollments. 

The current TennCare budget is $12 Billion dollars.  And, like many states, it is the state’s most expensive state agency.  Federal funds account for 65 cents of every TennCare dollar spent, and that amount is based on the average household income throughout the state.

“This legislation does not seek to reduce funding or limit current eligibility services to anyone,” said state senator Paul Bailey who co-sponsored the bill.

“We need the flexibility to determine what is best for our citizens instead of continuing down the path of a one-size-fits-all program from Washington DC.”

Source: Brett Kelman, The Tennessean; Rachana Pradhan, Politico.



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