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Tennessee Healthcare Reform—2008 in Review and Outlook for 2009


Email Alert

By Danielle M. Sloane*

January 13, 2009

In 2008, Tennessee continued its recent focus on expanding assistance for state residents in obtaining health insurance and healthcare services. Unfortunately, the state of the economy overshadows the healthcare reform proposals that await consideration in 2009. Despite the reduced likelihood of the state making large strides in healthcare reform in 2009, the reform measures passed in 2008 will move toward implementation in 2009, and the state is working to find ways to cushion the blow of impending budget cuts.

2008 Long Term Care Community Choices Act

The Long Term Care Community Choices Act of 2008 (LTC Act), enacted June 17, 2008, expands access to home and community based services (HCBS) for TennCare (i.e., Tennessee Medicaid) eligible residents. The LTC Act will allow TennCare to assist 2,300 more elderly and disabled adults by reorganizing the TennCare long-term care system and rebalancing funding.

The new LTC system will shift focus from providing mostly expensive institutional care to providing more cost-effective home- and community-based alternatives in addition to institutional care. The LTC Act creates a "single point of entry" where people in need of long-term care and their families can, among other things, learn about the alternative services available, receive counseling and assistance in evaluating long-term care options, undergo screening and intake for long-term care programs, and obtain assistance in TennCare enrollment and coordination of other Tenncare benefits.

TennCare's expansion of home health benefits was approved by the federal government in September 2008. The Bureau of TennCare hopes to begin implementation of the new program in middle Tennessee by July 2009.

2008 Cover Tennessee Enrollment Expansion

In 2008, Tennessee continued to expand the enrollment in its Cover Tennessee program. Cover Tennessee is a voluntary limited-benefit health insurance coverage program developed in 2007 for individuals who do not qualify for TennCare or are uninsurable. One component of the program, "CoverTN," aims to provide limited-benefit health insurance (up to $25,000 in benefits per year) to adults who are working in small businesses that do not offer insurance or are self-employed. In 2008, Tennessee expanded the eligibility criteria for the CoverTN program to include (a) individuals who earn less than $43,000 per year and work for a company that does not offer health insurance and (b) individuals who are between jobs.

2009 Outlook

The TennCare program and other state health programs are facing statewide budget cuts in 2009. In an effort to reduce the effect of impending budget cuts on eligible TennCare beneficiaries, the state recently obtained relief from a twenty-one-year-old court order that had barred the state from reviewing the eligibility of a class of 150,000 TennCare beneficiaries, some of whom may no longer be eligible for TennCare benefits. TennCare does not know how many of these individuals may be ineligible but predicts that the state could save as much as $120 million ($42 million of which is state funded) annually if just 10% of them are found ineligible. TennCare hopes that any realized savings will help minimize the effect of budget reductions the program will have to make on truly eligible members.

Despite the budget problems, health reform-related bills already await consideration by the 106th General Assembly, set to begin today. These bills address, among other things, funding for school nurses in public schools, allowing citizens access to the same group healthcare plan as general state employees, and responding to the prevalence of HIV/AIDs cases in the African-American community.

*We would like to Danielle M. Sloane (Bass Berry & Sims PLC, Nashville, TN) for providing this summary


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