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TennCare is the state Medicaid program in the U.S. state of Tennessee. TennCare was established in 1994 under a federal waiver that authorized deviations from the standard Medicaid rules. It was the first state Medicaid program to enroll all Medicaid recipients in managed care. When first implemented, it also offered health insurance to other residents who did not have other insurance. Over time, the non-Medicaid component of the program was significantly reduced.
TennCare was started in the early 1990s under Governor Ned McWherter as a health care reform initiative that had the twin goals of controlling rising Medicaid costs and increasing public access to affordable health care. Tennessee sought and obtained waivers from the federal Health Care Financing Administration that allowed the state to conduct a five-year demonstration program. Plans called for eliminating the Medicaid fee-for-service payment method by instead enrolling the state's Medicaid recipients in managed care programs administered by private-sector organizations. Additionally, other state residents who lacked healthcare coverage, particularly those who could not obtain medical insurance because of pre-existing medical conditions, could pay sliding-scale premiums to enroll in the same programs; the cost of their coverage would be subsidized by savings from the Medicaid program. The waiver that Tennessee received was one of the nation’s first Medicaid waivers, with the overarching requirement that the program be "budget neutral", or require no greater federal funding than the previous Medicaid program.
The program was launched January 1, 1994. The state contracted with 12 statewide managed-care organizations that were established to implement the program through a competitive bid process. The state shifted more than 800,000 individuals from standard Medicaid coverage to coverage through a managed care company, and extended program benefits to 500,000 more people who were not Medicaid-eligible, but were uninsured or deemed uninsurable due to pre-existing conditions.
In its first year of operation, TennCare enrollment quickly grew, leading to concern that it would exceed the number for which the federal government would share cost. In 1995, after enrollment reached 1.2 million, the state closed eligibility to uninsured adults. People who were deemed uninsurable due to pre-existing health conditions were still eligible to enroll.
In 1996, the state separated behavioral health services from the basic managed-care program, contracting with a separate set of behavioral health organizations for mental health and substance abuse services to TennCare participants.
The initial five-year Medicaid waiver was eventually extended through July 1, 2002, when it was replaced by a new program waiver called “TennCare II” that was extended until June 30, 2010.
Under TennCare II, program eligibility for "uninsured" and "uninsurables" was tightened. New applicants in the "uninsurable" category (now called "medically eligible") were required to have an income below a specified threshold and their ineligibility for standard insurance was required to be verified through a medical underwriting process.
The total annual budget for TennCare increased from $2.64 billion in 1994 to more than $8.5 billion in fiscal year 2005, with essentially no change in the number of participants enrolled. After becoming Governor in 2003, Phil Bredesen hired the consulting firm McKinsey & Company to evaluate the financial sustainability of TennCare and make recommendations for future actions. The McKinsey report, issued in late 2003, concluded that TennCare was not financially viable. A follow-up report in January 2004 identified options that ranged from returning to the original Medicaid program to setting limits on enrollment and benefits. In response to these reports and to stem the growth in costs, in 2005 the state implemented several program changes, including removing about 190,000 participants, imposing limits on the number of prescription medications each participant could receive, and reducing some other benefits.
TennCare Standard Spend Down
In 2006, the state of Tennessee obtained federal approval to conduct a demonstration program to offer coverage to a limited number of adults with low incomes and high medical bills. This program, named TennCare Standard Spend Down, was open to people whose available incomes fell below established thresholds after subtracting their unpaid medical bills from their income. Enrollment applications for the limited number of slots in the program were received only during occasional special enrollment periods, when state officials opened a special call-in telephone line and accepted the first 2,500 telephone calls, then sent application forms to the successful callers. The first such enrollment window opened in October 2010. As of March 2013, six enrollment events had been held. The phone lines typically shut down within an hour, during which time people needed to perform competitive dialing in hopes of getting through and receiving an application. About 500 applications were ultimately approved each time. In June 2013, the enrollment procss was satirized by The Daily Show, on which Jessica Williams called it a "health care lottery."
Although the TennCare Standard Spend Down program had 3,500 slots available for coverage, as of March 2013, it covered only about 1,000 people at a cost of $32 million a year, a tiny fraction of the 1.2 million people covered by TennCare.
- TennCare Overview, Bureau of TennCare website, accessed October 22, 2009
- Chang, Cyril F. (November 2007). "Evolution of TennCare Yields Valuable Lessons". Managed Care: 45–49. Archived from the original on October 8, 2010.
- Chang, Cyril F.; Steinberg, Stephanie C. (November 2008). "TennCare Timeline: Major Events and Milestones from 1992 to 2009". Methodist LeBonheur Center for Healthcare Economics, University of Memphis.
- Jane Crumpler DeFiore, TennCare, Tennessee Encyclopedia of History and Culture, 2009. Retrieved: 14 February 2013.
- Holahan, J; Coughlin, T; Ku, L; Lipson, D J; Rajan, S (1995). "Insuring the poor through Section 1115 Medicaid waivers". Health Affairs 14 (1): 199–216. doi:10.1377/hlthaff.14.1.199.
- Merrill Matthews, "Lessons From Tennessee's Failed Health Care Reform," Heritage Foundation website, 7 April 2000. Retrieved: 14 February 2013.
- "TennCare Timeline". State of Tennessee Bureau of TennCare. Retrieved April 18, 2014.
- Managed Care and Low-Income Populations: A Case Study of Managed Care in Tennessee; 2006 Update, Prepared by Mathematica Policy Research, Inc., for the Kaiser/Commonwealth Low-Income Coverage and Access Project, January 1997
- Goodnough, Abby (March 24, 2013). "Tennessee Race for Medicaid: Dial Fast and Try, Try Again". New York Times.
- "TennCare Announces The Opening of Standard Spend Down". State of Tennessee Bureau of TennCare. September 23, 2010.
- "Daily Show mocks Tennessee’s health care lottery". Chattanooga Free Press. June 6, 2013.
- Wilemon, Tom (June 5, 2013). "The Daily Show episode focusing on TennCare and Tennessee Justice Center airs tonight". The Tennessean.
- "How to Apply". State of Tennessee Bureau of TennCare. Retrieved April 18, 2014.