Tennessee Republicans to pursue block grant program they say could expand health care coverage

Republican lawmakers are working on a bill they say could eventually provide health care coverage to the working poor in Tennessee through a block grant system. 

Lt. Gov. Randy McNally and his Republican colleagues in the Senate said they support an effort underway by Sen. Paul Bailey, R-Sparta, to "address the population that's below 138 percent of the poverty level."

It's unclear how they would secure any additional coverage for those currently uninsured, and how many people would actually be affected under their proposal.

"We'll be looking at the population that probably was most in need of insurance but left out of affordable care," McNally, R-Oak Ridge, said. 

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Democrats, who have long fought to expand the state's Medicaid program under the Affordable Care Act, said the latest proposal moves in the wrong direction. 

The first step of the proposal seeks to find savings and greater flexibility in the state's current Medicaid system. After that, the Republicans said the proposal could look at covering some currently uninsured  individuals. 

Although McNally did not provide many details, he said the proposal could include vouchers or health savings accounts and would ultimately need to be approved by the federal government.

Similar ideas were proposed in 2016 after former House Speaker Beth Harwell, R-Nashville, formed a task force that ultimately sought to ask federal officials to provide health care to Tennesseans with a block grant. 

That idea, which was led by House lawmakers, ultimately did not advance. 

McNally said Thursday the latest idea is separate from Harwell's, even if it shares some similarities. He also said Bailey is working with Gov. Bill Lee's administration on the proposal. 

Gov. Lee weighs in

Lee said on Thursday that he was in favor of talking with the federal government about Tennessee establishing a block grant program.

"The legislature is looking at that, and I will look at whatever they propose," Lee said. "(I) certainly want to work with the federal government in any way we can, primarily to lower costs with our existing Medicaid system and then to see where we go from there."

Lee has been an outspoken critic of expanding Medicaid expansion, calling it a "fundamentally flawed system." At the same time, the governor has maintained that he wants to address health care by reducing costs.

In a statement released by the Senate Republican caucus, Bailey did not mention expanding the number of people receiving insurance, but focused on how savings would improve care quality.

“Tennessee is one of the best financially managed states in the nation,” Bailey said. “A block grant would give us the regulatory flexibility to design an innovative plan that works best for our citizens, instead of a one-size-fits-all plan from D.C.” 

The proposal, first mentioned by McNally during a weekly gathering with the press, was not announced with much fanfare. It came up after McNally was asked what controversial bills might be addressed this year.

"Medicaid expansion," he said, mentioning Bailey's proposal. He later clarified that the proposal was not, in fact, an effort to expand Medicaid but a different way to provide additional health care coverage. 

Republicans in Tennessee continue to resist Medicaid expansion

Since former Gov. Bill Haslam's failed effort in 2015 to expand Medicaid, health care has continued to be a focus of many Tennesseans.

Democrats have rallied behind multiple efforts to expand Medicaid under the ACA, all of which have failed. 

McNally, as well as Senate Majority Leader Jack Johnson, R-Franklin, pushed back against the notion that the new effort would be any form of Medicaid expansion.

"I think that it's not really an expansion of Obamacare, but it's a way that we can provide some type of insurance to people that were left out by the Affordable Care Act," McNally said. 

Sen. Ken Yager, R-Kingston, said the Senate GOP caucus has been receptive to the proposal.  

Bill raises questions about effectiveness of block grants

Senate Minority Leader Jeff Yarbro, D-Nashville, said he would be "open to supporting any good faith effort to expand affordable health care access to Tennesseans," but wasn't convinced the program could work. He also said he was yet to see a plan on how the GOP would address the coverage gap.

"Based on federal law, I'm not sure that a block grant bill really is a good faith effort, but it's way past time to be serious about what Tennessee is going to do to address the health care needs and coverage gap in the state," he said.

Michele Johnson, executive director of The Tennessee Justice Center, described the bill as a “dead end.”

“The bill in its present form does nothing to cover working families, protect rural hospitals or support people with pre-existing medical conditions," Johnson said. "But we take hope from the comments of legislators who say they want to do those things, and we hope they will amend it.”

House Democratic caucus chairman Mike Stewart, D-Nashville, said he preferred to solve the "health care issue" in Tennessee by following what Kentucky and Virginia did. Both states expanded under the ACA.  

“Anything else is just a delay," said Stewart. "Let’s end the delays and just do what we all know is the right thing.” 

Bill asks governor to submit a waiver to federal government

Bailey and Rep. Timothy Hill, R-Blountville, filed legislation that would direct the governor to submit a waiver amendment to the federal Centers for Medicare and Medicaid Services to obtain a block grant. 

The bill is one page and says, in part, "The block grant authorized by this section must convert the federal share of all medical assistance funding for this state into an allotment that is tailored to meet the needs of this state and that is indexed for inflation and population growth."

In a statement, Hill said Tennessee officials know better than the federal government what works best for the state. 

"These block grants will enable us to create a patient-centered system, focused on increasing competition, lowering costs, and improving the quality of care Tennesseans receive."

Yarbro said Bailey and Hill's legislation did not outline how Republicans would provide additional coverage to the working poor who are currently uninsured.

"The proposal doesn't expand coverage to a single person not covered now, and it wouldn't make coverage more affordable for anyone," Yarbro said.

The newly introduced bill comes more than 10 months after Republican leaders met with Haslam to discuss health care ideas. Among them was a plan to use federal block grants. The talks, however, ultimately failed to gain enough support.

At the time, then-House Majority Leader Glen Casada was concerned about unforeseen costs.  

Cade Cothren, spokesman for Casada, who is now the House speaker, said the top Republican strongly favors a block grant system, which he says will create a "more patient-focused healthcare system in the state with lower costs, greater transparency and better quality of care for all."

Cothren said the bill is not widely known within the House Republican caucus, but there was support for the concept.

Last month, President Donald Trump's administration said they were considering allowing states to receive block grants for Medicaid programs. 

Brett Kelman contributed to this report. 

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