Posts Tagged ‘Governor Haslam’

Buyer beware: Five things to know about Haslam’s Medicaid expansion

Buyer beware: Five things to know about Haslam’s Medicaid expansion

This piece originally ran in the Chattanooga Times Free Press.

On Feb. 2, the 109th Tennessee General Assembly will gather for a special session to determine the fate of Gov. Bill Haslam’s proposed expansion of Medicaid under Obamacare.

Tennessee taxpayers did their part last year, pushing lawmakers to pass the “Stop Obamacare Act,” requiring the governor to seek legislative approval before unilaterally implementing an expansion of the government health insurance program. Of course, the governor would have Tennesseans believe we can have our cake and eat it too — take federal expansion dollars, but spend them how we see fit. The problem is that’s not how it works when you wheel and deal with Washington bureaucrats.

Here are the top five things Tennesseans should know about “Insure Tennessee”:

1. These are not “free” federal dollars that another state’s taxpayers receive if Tennessee fails to claim “our share.” There is no pot of Medicaid money sitting in Washington waiting for us to grab. Every dollar used to finance a state Medicaid expansion is a dollar borrowed from other countries and charged to our national credit card. And who will be left paying the bill? Our children and grandchildren, with interest.

2. Estimates indicate that between 200,000 and 400,000 Tennesseans will be eligible for this expansion. And the vast majority of them are able-bodied, childless adults of working age. With 40 percent of Tennessee doctors now refusing to see new Medicaid patients, these folks will add to the plight of our state’s most vulnerable, who are already enrolled in the program and struggle to find a physician to treat them. Expect the added strain on the program to cause long lines with heartbreaking unintended consequences for those who are truly disabled or otherwise unable to help themselves.

3. The “Volunteer Plan” or voucher for those who qualify to purchase employer coverage is exactly that — an incentive for employers to drop their share of insurance costs down to 50 percent so that taxpayers can “volunteer” to pay the rest. Not only is this bad policy, but it’s a misleading talking point. The Foundation for Government Accountability estimates that just 16 percent of new Medicaid enrollees are working full time, while many of those working part time are not eligible for their employer’s health plan. They will instead be dumped onto the traditional Medicaid rolls..

4. Hospitals claim they will pick up the bill for any state costs over the two-year pilot program, but what happens when costs exceed projections? (Ask Arkansas, Illinois, Utah.) Hospitals claim they need expansion money to survive, but with Medicaid reimbursements decreasing, putting thousands more onto the program only kicks an empty can down the road.

Plus, the funding scheme used to obtain the federal dollars is sketchy at best. Hospitals front the state money through an “assessment fee,” and the state turns around and shows the feds that it has its share of the pie in order to secure more taxpayer money from Washington. In the end, the hospitals get their money back, plus billions more from taxpayers. Our own two U.S. senators have called for ending this funding mechanism in the past, yet it is the primary means for funding the proposed Medicaid expansion. If the assessment fee comes under attack from Congress, state taxpayers will have no choice but to step in and pick up the tab.

5. It is easier to ask for forgiveness than permission. At least that’s what Governor Haslam is likely hoping. Once the pilot program expires, he will need reauthorization from Washington, but if the program fails to deliver, will legislators have political license to kick more than 200,000 people off health care? And even if they do, is it right to give someone a “free” rug only to rip it out from under them?

Ultimately, legislators must decide if we burden more Tennesseans with Obamacare’s broken promises, failed schemes, and unsustainable policies, or whether we march towards more freedom, greater access, and better care. Taxpayers will be watching.


Lindsay Boyd is the director of policy at the Beacon Center of Tennessee, the state’s premier free market think tank. Learn more at

February 2nd, 2015 | Commentary, Feature

The Medicaid Expansion Funding House of Cards

The Medicaid Expansion Funding House of Cards

Gov. Haslam is adamant that his proposed Medicaid expansion under Obamacare “won’t cost Tennessee taxpayers another dime.” That’s because the state’s share of the plan will be paid for by the state’s hospitals via an “assessment fee.” But while this may sound good in theory, the reality is much less appealing.

First off, what is a “hospital assessment fee”? In order to obtain federal Medicaid dollars, the state must first show that it has collected its share of funding locally. It’s the whole, “you put in a dollar and I’ll give you three” approach that has become customary in Washington. Rather than directly tax Tennesseans to obtain the state’s share of the funding for the proposed expansion, Gov. Haslam is asking the hospitals to pony up the money via a provider tax.

Through this provider tax, the hospitals will forward the state money, which the state will then use to draw down more federal dollars. Once the state obtains the federal money, it will then kick more money back to the hospitals via reimbursements for seeing Medicaid patients. So in effect, the hospitals will get their money back, plus much more.

State law prohibits the hospitals from passing the costs of the provider tax onto their other patients, but nothing is really illegal unless there’s an enforcement mechanism to make it so. And here, there is really no way to prevent hospitals from shifting those costs now or in the future, meaning that in the end, those hospitals’ other patients will wind up footing the bill for this expansion.

What’s worse is that this funding scheme has come under attack by Congress in the past, including by our own two U.S. senators. As recently as 2012, Sen. Bob Corker proposed ending provider taxes, and Sen. Lamar Alexander signed onto the bill as a co-sponsor. If Congress ever moves forward with a ban on these assessment fees, state taxpayers will have no choice but to step in and pick up the tab. And that tab will only grow over time, with the state’s share of Medicaid expansion rising to at least 10 percent of total costs by 2020, and we have no assurances that a bankrupt federal government will continue to pay its share into the discernable future. Even if the provider tax scheme is not outright eliminated, it has been capped in the past, and a future cap could serve to limit how much Tennessee can raise from hospitals to cover its costs, forcing the state to turn to taxpayers for the rest.

This house of cards is not the way to fund the expansion of an entitlement program to more than 200,000 able-bodied adults. While there is plenty wrong with the proposed Medicaid expansion, the funding mechanism alone should make the whole plan fall apart. State Sen. Brian Kelsey, chairman of the Judiciary Committee, will hold hearings on the provider tax tomorrow afternoon. Funding a Medicaid expansion this way warrants not only careful scrutiny, but outright objection by the legislature.

-Justin Owen

January 26th, 2015 | Beacon Blog, Feature, Recent News

Hospitals Crying Wolf While Shaking Down Taxpayers

Hospitals Crying Wolf While Shaking Down Taxpayers

In just over a week, the Tennessee legislature will convene a special session to debate Gov. Haslam’s “Insure Tennessee” plan, a proposed Medicaid expansion under Obamacare. The Tennessee Hospital Association, which has lobbied for an expansion for years by claiming that rural hospitals would be forced to close their doors without the additional federal dollars, has begun a costly propaganda campaign to pressure legislators into supporting the governor’s plan.
But of course, we should be skeptical at best when hospital executives talk to patients and taxpayers. Here are just a few examples of why they can’t be trusted:

  • Hospitals across the country have been artificially lining their own pockets by scamming low-income patients out of their discounted prescription drugs using a federally funded program called 340B. Data on the operations of Tennessee hospitals show they are among the worst offenders. Read why here.
  • Erlanger hospital system in Chattanooga, a huge proponent of Medicaid expansion as a form of a bailout for supposedly struggling hospitals, dished $1.7 million in bonuses to its top management for financial performances at the end of 2014. Read about the scandal here.
  • HCA (Hospital Centers of America, and now “TriStar”), which was founded in Nashville and has expanded nationally, is the culprit of the largest fraud case in Medicare history. “The company seemed more organized-crime outfit than health-care provider…billing for tests that weren’t necessary or ordered; submitted false diagnoses to increase reimbursements, paid kickbacks to doctors for patient referrals and billed for home visits that people didn’t qualify for or receive.” Again—all to pad their bottom line. They settled with the feds for $2 billion. Read about it here.
  • And in developing news, nonprofit hospitals are allegedly seizing the wages of lower-income and working-class patients. Now, Sen. Chuck Grassley, the chairman of the Senate Judiciary Committee, says these hospitals “could be breaking the law by suing these patients and docking their pay…” Further, “Grassley says the ACA requires that hospitals take the initiative to determine whether patients qualify for financial aid. The hospital is not supposed to shift that burden onto the patients.” And yet, that’s exactly what some are doing. Read about it here.

And so these stories beg the question: Can Tennesseans trust the million-dollar executives and lobbying arms of the hospitals when they promise us that they’ll not shift their financial costs associated with “Insure Tennessee” along to patients and taxpayers? Think about it.

-Lindsay Boyd

January 22nd, 2015 | Beacon Blog, Feature, Sign Up Now