Governor Bill Haslam on Monday unveiled his Insure Tennessee plan, a two-year pilot program to provide health care coverage to Tennesseans who currently don’t have access to health insurance or have limited options. The program rewards healthy behaviors, prepares members to transition to private coverage, promotes personal responsibility and incentivizes choosing preventative and routine care instead of unnecessary use of emergency rooms.
The governor announced that he plans to call a special session to focus on the proposal after the 109th General Assembly convenes in January.
“We made the decision in Tennessee nearly two years ago not to expand traditional Medicaid,” Governor Haslam said. “This is an alternative approach that forges a different path and is a unique Tennessee solution. This plan leverages federal dollars to provide health care coverage to more Tennesseans, to give people a choice in their coverage, and to address the cost of health care, better health outcomes and personal responsibility.
“Our approach is responsible and reasonable, and I truly believe that it can be a catalyst to fundamentally changing health care in Tennessee. It is our hope that this plan opens the door in the future for innovation within our existing Medicaid program. I look forward to working with providers across the state to advance payment reform and with members of the General Assembly to make this plan a reality.”
Five key areas of the governor’s plan include:
- A fiscally sound and sustainable program;
- Providing two new private market choices for Tennesseans;
- Shifting the delivery model and payment of health care in Tennessee from fee-for-service to outcomes based;
- Incentivizing Tennesseans to be more engaged and to take more personal responsibility in their health;
- And preparing participants for eventual transition to commercial health coverage.
The program will not create any new taxes for Tennesseans and will not add any state cost to the budget. The Tennessee Hospital Association has committed that the industry will cover any additional cost to the state. The program will automatically terminate in the event that either federal funding or support from the hospitals is modified in any way.
Insure Tennessee offers several options of coverage for individuals below 138 percent of poverty ($16,100 for an individual and $27,300 for a family of three). Tennesseans 21 to 64 years old will be offered a choice of the Healthy Incentives Plan or the Volunteer Plan.
The Volunteer Plan would provide a health insurance voucher to participants that would be used to participate in their employer’s health insurance plan. The voucher, valued at slightly less than the average TennCare per-enrollee cost, can be used to pay for premiums and other out-of-pocket expenses associated with participation in an individual’s employer sponsored private market plan.
Participants in the Healthy Incentives Plan may choose to receive coverage through a redesigned component of the TennCare program, which would introduce Healthy Incentives for Tennesseans (HIT) accounts, modeled after Health Reimbursement Accounts (HRAs), which can be used to pay for a portion of required member cost-sharing.
The governor’s Delivery System Reform Initiative lays the foundation for reform by addressing the underlying quality and outcome deficiencies that contribute to growing health care costs and unaffordable insurance coverage. This initiative creates financial incentives for providers to provide high quality care in an efficient and appropriate manner so as to reduce costs and improve health outcomes. Insure Tennessee builds on this reform initiative by creating new participant incentives that align with the existing provider incentives. Ultimately, bringing the health care consumer into the equation is critical to successfully controlling cost growth.
The voucher program provides a fixed contribution that can be applied to the costs of a person’s private market plan. All costs incurred in excess of the amount of the voucher are the responsibility of the participant. This structure empowers individuals to make a choice about which plan is better for their needs and to manage their health care expenses to avoid additional costs.
Newly eligible individuals who choose to participate in the TennCare program and whose incomes are above 100 percent of poverty will be required to pay premiums and copays for services. All enrollees, including those with incomes below poverty, will have modest pharmacy copays. TennCare members “earn” contributions into their HIT accounts by performing healthy behaviors. The account then can be used to cover copayment expenses.
The design of Insure Tennessee is based on private market principles that provide incentives to participants to engage in their health care by actively managing their health care costs. Through both programs, Insure Tennessee introduces a commercial health insurance experience which can help Tennesseans prepare for independence from public assistance.
In June 2012, the Supreme Court ruled that the federal government could not mandate that states expand their Medicaid programs under the Affordable Care Act. In March 2013, Governor Haslam announced that Tennessee would not expand the traditional Medicaid program but that he would work with the federal government on a plan for Tennessee that would take into consideration program cost, patient engagement, payment reform and health outcomes. Since that time, he has kept those principles as priorities in working toward the Insure Tennessee plan. Governor Haslam has received verbal approval from the U.S. Department of Health and Human Services (HHS) on the plan. The next steps are for the state to submit a waiver to HHS and for the governor to take the proposal to the legislature for consideration.
Governor Haslam was joined for the announcement in the Old Supreme Court Chamber of the State Capitol by representatives from a coalition of business, health care and civic organizations who applauded the plan and its impact on Tennessee.