Lt. Gov. Randy McNally said Thursday the state’s modified block grant should stay in place before he would support a move to accept the Biden Administration’s Medicaid expansion funds.

But regardless, the measure doesn’t appear to have any hope in the House, based on Speaker Cameron Sexton’s comments Thursday when he said, “I’m not willing to cut a deal on expansion for a shared savings plan. Shared savings is a great plan for all Tennesseans. There’s no need to negotiate on that.”

Sexton also predicted the proposal wouldn’t pass in the House anyway.

As part of the American Recovery Act, President Joe Biden is willing to increase Medicaid funding for the state’s TennCare program by 5 percentage points, bringing in about $1.2 billion over the next two years.

  My policy's always been you don't make a policy decision on how much funding you think you may get in the short term.   – Cameron Sexton, Speaker of the Tennessee House of Representative

McNally, an Oak Ridge Republican, said in his weekly press conference he spoke last week about the matter with Gov. Bill Lee, who “indicated he would think about it.” Previously, Lee has called the Affordable Care Act “fundamentally flawed.”

The lieutenant governor said earlier this week he believes the proposal is worth considering after he staunchly opposed Medicaid expansion for years because of the potential financial burden it could place on the state.

He said Thursday, though, “I think one of the keys is whether the federal government accepts the amendment to the Medicaid program that we were successful in getting, a block grant-type program.”

Lt. Gov. Randy McNally in Tennessee Senate Chambers. (Photo: John Partipilo)
Lt. Gov. Randy McNally in Tennessee Senate Chambers. (Photo: John Partipilo)

Sexton, however, doused the whole idea.

Despite saying he respects McNally’s “direction” for the Senate, Sexton contended the federal government merely wants to “dangle” funding in front of the state for two years.

“My policy’s always been you don’t make a policy decision based on how much funding you think you may get in the short term. It needs to be really about the policy, and right now I don’t think we could pass expansion on the House,” Sexton said.

Under the modified block grant, the state could tap into “shared savings” to offer more services to TennCare recipients and potentially add some people to the rolls. The state began negotiating the program about a year and a half ago, and the outgoing Trump Administration approved the waiver for a modified block ground less than two weeks before President Donald Trump left office in January. The General Assembly then adopted it.

Democrats have been imploring the Republican-controlled Legislature for years to expand Medicaid to catch some 300,000 people in a gap between TennCare and the Affordable Care Act. 

The state’s Division of TennCare is already proceeding with TennCare III, and the Legislature would have to approve any proposals the Biden Administration is making, said Sen. Paul Bailey, a Cookeville Republican who sponsored the block grant legislation.

Two Democrats, Senate Minority Leader Jeff Yarbro and Rep. John Ray Clemmons, both of Nashville, called on Republican leaders to tap into the Medicaid expansion funds earlier this week.

Yarbro, who noted the money is “just there for our taking,” pointed out the state could use funds from the first two years to pay Tennessee’s share of Medicaid expansion for up to five years after the initial two.

The federal government would pay 90% of the cost of Medicaid expansion annually. Under the current formula, the federal government pays 65% for TennCare and the state funds the other 35%.

Gov. Lee’s spokeswoman Casey Black did not say Thursday whether he would consider Medicaid expansion offered by the Biden Administration but instead noted the governor’s office is “focused on the successful administration of the block grant waiver” approved in January.

In his State of the State address this year, Lee noted Tennessee became the first state in history to receive a Medicaid block grant waiver, which he said allows enrollees to benefit from strong fiscal management and requires the state to meet “quality metrics” to ensure savings won’t be accrued by cutting back on services or the number of people served.

Lee’s address also turned a little sharper than normal when he said, “Let me be clear: if partisan attacks that call for this block grant to be rescinded prevail, the state will not get these shared savings dollars that we plan to use to improve healthcare for vulnerable Tennesseans.”

What happens with the “experimental” block grant is up to the federal government, but the governor and Republican supermajority can control the outcome of TennCare expansion, Clemmons said in response Thursday.

“Right now, with every excuse they’ve ever provided being taken off the table by the American Recovery Act, their respective legacies, whenever written, will start and finish with their decision to either prioritize partisan politics or the health and well-being of Tennesseans,” Clemmons said.

Clemmons contends the state has an “unprecedented opportunity” and now the financial resources to provide working Tennesseans who are uninsured with health coverage.

“If the governor and speakers lead, their respective bodies will follow,” he said.