TennCare reforms preferred over killing off the program

  Gov. Phil Bredesen and the Tennessee General Assembly are facing a huge challenge this fiscal year: What to do about TennCare as far as containing its costs.
  The governor has threatened to scuttle the optional proportions of TennCare ever since he first proposed a different type of overhaul for the program last February.
  Plenty has changed since the federal government first approved TennCare, giving it the freedom and the money for a managed care program beyond the normal bounds of Medicaid.
  At the time of that initial approval in 1994, the federal government was urging states to experiment with programs that would provide health-care coverage for poor citizens at a lower cost. Managed care, as envisioned by TennCare, seemed just like the ticket.
  Although state officials want all people with real medical needs to be taken care of, it is obvious that the program needs substantial adjustment, especially considering that one-fourth of the state's population is covered by TennCare and that the program's costs have risen beyond taxpayers' ability to bear the load.
  It is estimated that TennCare will consume 36 percent of total state appropriations in fiscal year 2008 (up from 25 percent in 2003), and its cost growth in that year will represent 91 percent of new state tax appropriations.
  The program's budget has increased dramatically over the past decade and currently rests at $7.8 billion, of which the state pays more than $2 billion. The federal government picks up the remaining costs.
  There are several contributing factors to the program's growth. For example, TennCare's benefits have few limits. It has almost across the board, no limits on scope and duration of coverage. While most state programs limit the number of drug prescriptions an enrollee can fill per month, limit the number of hospital days the program will pay for, or require substantial co-pays, TennCare services are provided "as medically necessary" with no ceilings. TennCare requests co-pays only from its non-Medicaid beneficiaries.
  It is estimated that increased prescription drug costs alone will account for 56 percent of TennCare's growth between 2004 and 2008.
  The governor earlier this year advocated cuts in benefits, such as limited prescriptions and co-pays, however, advocates for enrollees have won numerous lawsuits against TennCare and resulting court rulings define many of the limits within which it must work. TennCare as it is today cannot succeed without some changes in those court orders and consent decrees.
  As a result, TennCare has become a ticking bomb. It is far too ambitious, enrolling too many people. It enrolls a higher percentage of adults than children. It enrolls all high-risk and medically uninsurable residents. It provides generous benefits, better in some respects than the plans offered by some private-sector employers. Finally, TennCare's generosity acts as a magnet, drawing in an uninsured population from surrounding states.
  The problems with TennCare, however, shouldn't hide the fact that with TennCare, Tennessee has been able to provide health coverage to more people at less cost. It has also helped stabilize health providers by turning charity patients into paying customers.
  Does TennCare need reforms? You bet it does. And, at this point, advocates for TennCare enrollees need to back off and let the governor and the General Assembly sort things out and reform the program, rather than kill the program altogether.
  The state needs to be able to solve TennCare's problems by tightening eligibility, re-entry and status verification rules and have the authority to impose reasonable co-pays and prescription drug limits for all TennCare beneficiaries -- and without court intervention.