Capitol Hill Conversation – Understanding Medicaid Indecision

Many lawmakers couldn’t decipher what Governor Bill Haslam meant last week as he addressed a rare joint session of the General Assembly.

Gov. Bill Haslam explains his Medicaid expansion decision to reporters. Image courtesy TN Photo Services

One of the most anticipated decisions of the year – expanding the state’s Medicaid program – turned out to be no decision at all. It left Republicans struggling to figure out when to applaud. And the indecision scuttled plans by the minority party to stage a walkout. Minority Leader Craig Fitzhugh and Democratic Caucus Chairman Mike Turner stayed in their seats.

“Craig said, ‘he’s going to do it.’ And I said, ‘I don’t think so,’ Turner recalls. “Then I said, ‘well maybe he is.’ And Craig said, ‘I don’t think so.’ So we couldn’t tell what he was doing there for a while.”

Once Democrats understood Haslam’s qualified no, they called it “shameful” to turn down billions of dollars to cover roughly 180,000 of the state’s working poor.

Unlike many announcements made at the state capitol, few knew what was coming, and most were looking for a yes or no. Instead, Haslam outlined a “third way” which he calls the “Tennessee Plan.”

At it’s most basic, the idea is to keep the state from having to use any of its own money. Haslam wants to take the federal funds to purchase private insurance for people instead of offering them the more generous benefits of Medicaid, known as TennCare in the state.

Republican leaders continue to demonize President Obama’s Affordable Care Act. And they’re asking for a deal that’s been granted to no other state, knowing it’s something of a long shot.

“Right now we’re asking for the moon, but we’re still sitting in Nashville,” says Senate Speaker Ron Ramsey. “We haven’t gone anywhere close to the moon.”

The federal government is already offering states a sweet deal compared to most Medicaid funding, which requires the state to put in one dollar for every two that comes from Washington.

Under a Medicaid expansion, the federal government would pay 100 percent of the total cost for the first three years. After that, the state would be required to put up roughly one dollar for every ten from the feds.

The Obama Administration has been receptive to states looking for flexibility.

“We welcome continued conversations with Tennessee about developing a state-based solution,” says Department of Health and Human Services spokesman Fabian Levy in a written statement.

But so far HHS hasn’t liked Tennessee’s proposal. State officials talked to HHS just last week to iron out specifics but were met with many answers of “don’t know.”

Still, so far HHS has not rejected Haslam’s proposal, which has not been submitted for a detailed review.

Even if the governor gets the deal he’s looking for, he says he will get the legislature’s approval, making it unlikely to participate in the Medicaid expansion by next year.