Tennessee now only state to pursue plan for Medicaid block grant

Tennessee remains the only state actively pursuing a controversial Medicaid block grant touted by the Trump Administration in January as a “game-changer” that would radically rejigger financing for the federal-state public health insurance program that covers 1 in 5 Americans.

Last week, Oklahoma’s Republican governor,  Gov. Kevin Stitt, informed federal officials he was scrapping plans to pursue a Medicaid block grant after voters in that state approved a June ballot measure, over his opposition, to instead expand Medicaid to eligible adults who need health insurance.

Tennessee officials said Friday they continue to move forward with plans to seek a block grant for TennCare, the state’s Medicaid program that provides health coverage to about 1.4 million Tennesseans, most of whom are children from low-income families.

“Conversations regarding Amendment 42 [the block grant request] are ongoing,” TennCare spokesperson Sara Tanksley said. “The timeline for a decision on the waiver proposal is at the sole discretion of CMS, but we look forward to continued discussions and engagement.”

A block grant would transform how the federal government pays for TennCare. Instead of funding tied to the number of people enrolled, which fluctuates based on demand, the state proposes to the federal government pay a fixed $7.9 billion annually, plus additional funds if more people join.

State officials would be free to create their own rules for TennCare coverage, without having to follow federal guidelines. The state could also keep half of any leftover federal funds saved by cost-cutting measures.

State officials have pledged to keep the level of services and enrollment current, but advocates for people on TennCare and people entirely without health coverage fear that cost-cutting would come at the expense of low-income Tennessee children and adults who depend on the program for their healthcare.

“It is tragic that politics, rather than concern for the health needs of Tennesseans, continues to guide the actions of our state’s leaders,” said Michele Johnson, executive director of the Tennessee Justice Center, a nonprofit legal and advocacy organization that represents TennCare enrollees.

“In the midst of a pandemic and economic crisis, our state continues to spurn $1.4 billion annually in federal Medicaid funding to cover uninsured low-wage workers on the front lines and support our beleaguered health care system,” she said. “Instead, we get gimmicks like the block grant proposal, which would result in less health care for Tennesseans.”

Tennessee officials submitted their block grant proposal in November, before the Trump Administration formally rolled out guidelines for states wishing to submit their own block grant proposals. State lawmakers last year, under the administration of former Gov. Bill Haslam, approved the plan. Gov. Bill Lee has endorsed it as well.

The federal government’s block grant plans initially caught the interest of leaders in a handful of states, including Alaska, Georgia and Oklahoma, but no other state has since moved forward.