March 28, 2013
Inside this issue
  Governer Halsam: A Tennessee Plan for Health Reform  
 

Earlier this year, I committed to providing some clarity around our Medicaid expansion decision prior to the end of March. And just a few minutes ago, I had the opportunity to address a joint session of the General Assembly to share where we are regarding this significant decision.

I think we all can agree that there is no more important or complex issue facing our country and our state than health care. Health care costs and the entitlement programs that cost our federal and state government so much money are on an unsustainable path. For example, regardless of whether we decide to cover any additional people through Obamacare, the Act will cost Tennesseans almost $2 billion over the next eight years. I shared with the General Assembly this morning that Tennessee will not expand TennCare rolls under the Affordable Care Act, but will instead work to leverage the available federal dollars to pursue real health care reform.

Tennessee has shown the nation how to produce true reform in education, based on students’ results and educational outcome. We’re beginning to do the same thing with reforming government service – again by measuring outcome and results rather than just years of service as a state employee. I believe Tennessee can also be a model for what true health care reform looks like, so we've been working toward a different plan: A Tennessee Plan for Health Reform.

The "Tennessee Plan" would take on the critical issue of aligning incentives among users, payers and providers of health care. Specifically, the plan would:

  • Leverage available federal dollars to purchase private health insurance for Tennesseans up to 138 percent of the federal poverty level who don’t have access to health insurance, which would translate to 175,000 more insured Tennesseans;

  • Allow co-pays for those who can afford to pay something;

  • Include a definitive circuit-breaker or sunset that could only be renewed with the General Assembly’s approval;

  • And reform the payment structure for providers so they are compensated for health outcomes, not just based on services performed.

To succeed, we need cooperation and assurances from the Department of Health and Human Services. At this point, we cannot get those assurances so I cannot recommend to the General Assembly that we move forward on this plan until we have more clarity and cooperation. Our upcoming budget amendment will not include language to accept these federal funds.

I’ll continue to pursue a vision for a healthier Tennessee with access to health care but at a lower cost for our state and our country. It is my hope that we can provide quality health care for more Tennesseans while transforming the relationship among health care users, providers and payers. If Tennessee can do that, we all win.

I appreciate your support and look forward to hearing your thoughts on this important issue.

– Bill

 

 

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  Haslam Rejects Federal Dollars This Year, Offers 'Third Option' on Medicaid  
 

Gov. Bill Haslam announced the state will not expand TennCare this year as called for by the federal health care law. The governor instead outlined what he called “a third option” for helping Tennesseans get coverage.

Haslam said neither a flat-out refusal to enlarge TennCare based on problems with the law nor an open-armed embrace – “expanding a broken system” – was the right path for Tennessee.

Under Haslam’s proposal, which he says the federal government will not agree to, payments to health care providers would be based on quality of care rather than just volume of services provided, and patients would have co-pays “so the user has some skin in the game when it comes to health care incentives.”

The state could also backtrack if the expansion of TennCare, the state’s version of Medicaid, wasn’t working.

“Our plan would have a definitive circuit-breaker or sunset that could only be renewed with the General Assembly’s approval based on when the amount of the federal funding decreases,” Haslam said Wednesday, speaking before the General Assembly.

Haslam also offered a critique of the law (Patient Protection and Affordable Care Act of 2010).

“To me, the scandal of the Affordable Care Act is that it doesn’t significantly address cost or alignment reform,” Haslam said. “And that’s what Washington does – it looks at a complex problem, realizes that some people aren’t going to like the changes, and as a solution, decides to spend more money.” Source HERE.

 

 

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  Haslam gives qualified 'no' on TennCare expansion  
 

Gov. Bill Haslam rejected an estimated $1 billion a year from the federal government to expand TennCare to 180,000 Tennesseans, saying he wanted to bargain for a better deal that would ensure the state won’t have to shoulder that cost later down the road.

Haslam said in a speech this morning to the state legislature that he wants to pursue a “Tennessee plan” for expanding health care coverage to more of the uninsured. But the U.S. Department of Health and Human Services has not signed off on it.

As a result, Haslam announced that he will not expand the rolls of TennCare, the state’s Medicaid program, this year under the Affordable Care Act. But he said the state could expand TennCare later if federal officials will give it the freedom to buy private coverage, an idea being pursued by Arkansas and Ohio.

“I believe Tennessee can also be a model for what true health care reform looks like; reform that will take significant steps to save the state and the nation from the unsustainable path we are on now,” Haslam said.

Haslam’s announcement combined the hopes of some governors for more flexibility with a harder negotiating stance. The governor said that refusing to expand TennCare initially would give the state more leverage with federal officials in the coming weeks and months.

The central premise of Haslam’s proposal is that the state could save money by buying policies for the uninsured from private insurers, rather than adding them to the state’s TennCare rolls.

Haslam said he and other Tennessee officials have been trying to get the federal government to agree to this proposal, and as recently as Monday, they expected the Department of Health and Human Services to go along with it. But Haslam said federal officials have been indecisive, prompting him to proceed on the assumption that they would not agree to the plan in time to write it into next year’s state budget.  Read more here.

 

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  Haslam rejects TennCare expansion under Affordable Care Act  
 

Gov. Bill Haslam is rejecting the federal government’s offer to pay for more people to receive Tennessee health care coverage on the state’s TennCare program but said he is instead researching a third alternative.

The option, which he said he is still working on, would use the federal dollars to buy private health insurance for some 175,000 low-income people, complete with co-pays.

“This isn’t the end of the story,” Haslam told reporters after breaking the news before a joint-session of the General Assembly that he would reject federal funds to expand TennCare right now. “We do think the Tennessee Plan, as I call it, is the right idea.”

The program would sunset after a certain period of time, giving the legislature power to renew it or close the program down. His plan, as conceived, would also revamp the payment structure for providers so they are compensated for health outcomes, not just services performed, he said.

The announcement Wednesday effectively delays movement on any program, likely until at least next year, rejecting dollars extended under the Affordable Care Act to states to expand the state’s Medicaid rolls under the state’s TennCare program.

Democrats, who have been urging the governor to expand the Medicaid program, contend the governor’s announcement “delivered a ‘no’ dressed up as a year of delayed action and indecision,” according to a press release.

“This is a time when the people of Tennessee need clear, precise and bold leadership, and Governor Haslam offered none of that today,” echoed Rep. Mike Turner (D-Old Hickory), the House Democratic Caucus chairman. “It’s a failure of our moral obligation to protect the health and welfare of the most vulnerable among us. It’s a failure that will be paid with the lives of the working poor in our state — this is quite simply shameful.”
Read more here.

 

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Read Governor Haslam's Speech HERE.
     
Study: Health law to raise claims cost 32 percent

WASHINGTON (AP) — A new study finds that insurance companies will have to pay out an average of 32 percent more for medical claims under President Barack Obama's health care overhaul.

What does that mean for you?

It could increase premiums for at least some Americans.

If you are uninsured, or you buy your policy directly from an insurance company, you should pay attention.

But if you have an employer plan, like most workers and their families, odds are you don't have much to worry about.

The estimates from the Society of Actuaries could turn into a political headache for the Obama administration at a time when much of the country remains skeptical of the Affordable Care Act.

The administration is questioning the study, saying it doesn't give a full picture — and costs will go down.

Actuaries are financial risk professionals who conduct long-range cost estimates for pension plans, insurance companies and government programs.

The study says claims costs will go up largely because sicker people will join the insurance pool. That's because the law forbids insurers from turning down those with pre-existing medical problems, effective Jan. 1. Everyone gets sick sooner or later, but sicker people also use more health care services.

"Claims cost is the most important driver of health care premiums," said Kristi Bohn, an actuary who worked on the study. Spending on sicker people and other high-cost groups will overwhelm an influx of younger, healthier people into the program, said the report.  Read more here.

     
Medicaid Is Worse Than No Coverage at All

Across the country, cash-strapped states are leveling blanket cuts on Medicaid providers that are turning the health program into an increasingly hollow benefit. Governors that made politically expedient promises to expand coverage during flush times are being forced to renege given their imperiled budgets. In some states, they've cut the reimbursement to providers so low that beneficiaries can't find doctors willing to accept Medicaid.

Washington contributes to this mess by leaving states no option other than across-the-board cuts. Patients would be better off if states were able to tailor the benefits that Medicaid covers—targeting resources to sicker people and giving healthy adults cheaper, basic coverage. But federal rules say that everyone has to get the same package of benefits, regardless of health status, needs or personal desires.

These rules reflect the ambition of liberal lawmakers who cling to the dogma that Medicaid should be a "comprehensive" benefit. In their view, any tailoring is an affront to egalitarianism. Because states are forced to offer everyone everything, the actual payment rates are driven so low that beneficiaries often end up with nothing in practice.

Dozens of recent medical studies show that Medicaid patients suffer for it. In some cases, they'd do just as well without health insurance. Here's a sampling of that research: Read more here.


 
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