MYTH #8:
“The state has created a safety net of programs to help everyone who loses their TennCare. Plus, the Governor has come up with a plan to preserve coverage for the 97,000  sickest and neediest people who are losing their TennCare coverage.”1

REALITY

The safety net is more about providing political cover for elected officials than about protecting the health of Tennessee’s citizens. The state budget for fiscal year 2006 eliminated $1.8 billion in medical services for the sickest, poorest people in Tennessee. The same budget added back only 4.2% of that amount, or $76.4 million, to fund “safety net” projects. The funds were used to add primary care physicians at some county health departments, to administer a discount drug program and to provide limited psychiatric medications to some of the 30,000 severely mentally ill patients who are losing their TennCare coverage. These inadequate resources were added to a safety net infrastructure that was grossly ill-equipped to meet the needs that existed before the mass disenrollment of TennCare patients and resulting increase in the numbers of uninsured. Many of the initiatives were not in place until long after people had lost essential care. And the nature of the programs, which focus on primary care and public health, did not address the specialized needs of patients with complex chronic illnesses, who account for the majority of the medical services being cut by TennCare.  

The plan that was advertised as “preserving coverage for the sickest and neediest 97,000” adults who were slated for termination fell far short of actually doing what was claimed. The 97,000 were adults who were covered under the Medically Needy “spend-down” program that existed for three decades in Tennessee, and that remains in effect in 35 other states. In the first three months of 2006, the state permanently terminated 39,000 of the group, cutting off anyone who also had Medicare. The remaining 59,000 will have to reapply under rules that are far more stringent than the rules that existed previously, or that are permitted by federal law. Most will not be able to qualify, and those who do will only receive a maximum of two months of coverage before they have to go off the program, incur new medical bills and reapply. Even the lucky minority who qualify will be subject to repeated breaks in their coverage and interruptions in their medical care.

Many extremely sick people are disappointed to learn that eligibility for this limited program has nothing to do with whether they are, in fact, among the “sickest and neediest” patients who are getting cut off. Regardless of how sick or needy a person may be, he can qualify for the new program before July 2006 only if he happens to have been classified in April 2005 as belonging to the Medically Needy “spend-down” category. As a matter of fact, although the people in that category are, as a group, quite sick, the medical needs of the nearly 200,000 other people who have been terminated are even greater.2

The new program will open up to new applicants in July 2006, but only a limited number of applications will be accepted, to make sure that the total enrollment in the new program does not reach 100,000 (the number formerly enrolled in the Medically Needy category) until June 2007. This implements a strategy, outlined in confidential Bredesen Administration documents from late 2004 and January 2005. That strategy called for the state to cut deeply in 2005, generating more savings than were needed that year. The state would then do some “add-backs” later, as the 2006 election approached.3 

Another aspect of the “add back” part of the strategy was the Governor’s announcement in early 2006 of his “Cover Tennessee” plan.4 Unfortunately, the plan falls far short of reversing or even significantly mitigating the cuts. There are three elements. The most promising and substantial involves a promise to broaden eligibility for children, an area of state health policy in which Tennessee currently ranks last in the nation.5 These changes, if implemented, will be welcome, although they fall far short of what was advertised.6
 
For adults, the Cover Tennessee proposal would actually only “add back” restore coverage for a handful of the 230,000 people who were terminated. For those who are uninsurable because of pre-existing medical conditions, Cover Tennessee would re-establish a version of the high risk insurance pool that existed in Tennessee prior to 1994. Unfortunately, even the state’s own estimates anticipate that the program, would cover only 5,000 people, in contrast to the 67,000 uninsurable who lost their TennCare.7

The other element of is “Cover Tennessee” is a plan to provide a $50 monthly voucher to small employers to encourage them to provide coverage to their employees. The state would contribute a cumulative total of only $100 million over three years, a period during which the cumulative losses from the cuts will reach more than $5 billion.8 Even if Cover Tennessee were funded at a higher level, experience elsewhere indicates that it would reach only a small fraction of the 580,000 who were already uninsured prior to the cuts, or the nearly 200,000 additional adults whom the TennCare cuts added to their ranks.9