Federal Medicaid Expansion would Wreak Havoc on Tennessee

December 3, 2009 7:10PM

By Justin Owen NASHVILLE – The Tennessee Center for Policy Research today sent a brief to state lawmakers outlining the potential costs the proposed healthcare reform bills in Congress will have on the state. Both the House and Senate bills expand Medicaid eligibility, potentially devastating Tennessee’s budget. As a result, TennCare—the state’s Medicaid program—could become the health insurance option of nearly one in four Tennesseans. According to the brief, titled The Oncoming Tsunami of TennCare Costs, the additional TennCare enrollees could cost Tennesseans as much as $1.4 billion. Governor Phil Bredesen (D), has properly referred to this expansion as “the mother of all unfunded mandates.” TennCare already eats up a larger portion of the state budget than nearly every other state’s Medicaid program, and the proposed expansions would cause it to consume even more taxpayer money. “The current rate of TennCare enrollment is unsustainable without a significant tax increase,” noted Justin Owen, the director of policy at the Tennessee Center for Policy Research. “Opening the door to even more enrollees by expanding eligibility would wreak havoc on an already troubled program and the state budget.” Rather than add to the TennCare rolls, Owen suggests free market alternatives that would reduce TennCare recipients’ dependence on government and protect taxpayers’ hard-earned money. The brief offers two simple, yet effective solutions to the problem. First, the Tennessee General Assembly should seek a Medicaid waiver that would allow TennCare enrollees to take more control of their healthcare costs. Second, the state’s congressional delegation should urge Congress to replace the current Medicaid matching system with block grant funding.

“Congress successfully reformed welfare in the 1990s by moving to a block grant program, and they should do the same now to fix the Medicaid debacle,” said Owen. “The move would eliminate states’ incentive to throw more money at the problem rather than find real solutions to provide healthcare coverage to those unable to afford it.”