NASHVILLE – Tennessee Gov. Bill Haslam today unveiled his Insure Tennessee plan, a two-year pilot program to provide health care coverage to Tennesseans who currently don’t have access to health insurance or have limited options. The program rewards healthy behaviors, prepares members to transition to private coverage, promotes personal responsibility and incentivizes choosing preventative and routine care instead of unnecessary use of emergency rooms.
The governor announced that he plans to call a special session to focus on the proposal after the 109th General Assembly convenes in January.
“We made the decision in Tennessee nearly two years ago not to expand traditional Medicaid,” Haslam said. “This is an alternative approach that forges a different path and is a unique Tennessee solution. This plan leverages federal dollars to provide health care coverage to more Tennesseans, to give people a choice in their coverage, and to address the cost of health care, better health outcomes and personal responsibility.
“Our approach is responsible and reasonable, and I truly believe that it can be a catalyst to fundamentally changing health care in Tennessee. It is our hope that this plan opens the door in the future for innovation within our existing Medicaid program. I look forward to working with providers across the state to advance payment reform and with members of the General Assembly to make this plan a reality.”
Five key areas of the governor’s Insure Tennessee plan include:
- A fiscally sound and sustainable program;
- Providing two new private market choices for Tennesseans;
- Shifting the delivery model and payment of health care in Tennessee from fee-for-service to outcomes based;
- Incentivizing Tennesseans to be more engaged and to take more personal responsibility in their health;
- And preparing participants for eventual transition to commercial health coverage.
Fiscally Sound and Sustainable Program
The program will not create any new taxes for Tennesseans and will not add any state cost to the budget. The Tennessee Hospital Association has committed that the industry will cover any additional cost to the state. The program will automatically terminate in the event that either federal funding or support from the hospitals is modified in any way.
New Private Market Choices for Tennesseans
Insure Tennessee offers several options of coverage for individuals below 138 percent of poverty ($16,100 for an individual and $27,300 for a family of three). Tennesseans 21 to 64 years old will be offered a choice of the Healthy Incentives Plan or the Volunteer Plan.
The Volunteer Plan would provide a health insurance voucher to participants that would be used to participate in their employer’s health insurance plan. The voucher, valued at slightly less than the average TennCare per-enrollee cost, can be used to pay for premiums and other out-of-pocket expenses associated with participation in an individual’s employer sponsored private market plan.
Participants in the Healthy Incentives Plan may choose to receive coverage through a redesigned component of the TennCare program, which would introduce Healthy Incentives for Tennesseans (HIT) accounts, modeled after Health Reimbursement Accounts (HRAs), which can be used to pay for a portion of required member cost-sharing.
Payment Reform Efforts
The governor’s Delivery System Reform Initiative lays the foundation for reform by addressing the underlying quality and outcome deficiencies that contribute to growing health care costs and unaffordable insurance coverage. This initiative creates financial incentives for providers to provide high quality care in an efficient and appropriate manner so as to reduce costs and improve health outcomes. Insure Tennessee builds on this reform initiative by creating new participant incentives that align with the existing provider incentives. Ultimately, bringing the health care consumer into the equation is critical to successfully controlling cost growth.
Personal Responsibility and Patient Engagement
The voucher program provides a fixed contribution that can be applied to the costs of a person’s private market plan. All costs incurred in excess of the amount of the voucher are the responsibility of the participant. This structure empowers individuals to make a choice about which plan is better for their needs and to manage their health care expenses to avoid additional costs.
Newly eligible individuals who choose to participate in the TennCare program and whose incomes are above 100 percent of poverty will be required to pay premiums and copays for services. All enrollees, including those with incomes below poverty, will have modest pharmacy copays. TennCare members “earn” contributions into their HIT accounts by performing healthy behaviors. The account then can be used to cover copayment expenses.
Prepares Participants for Commercial Health Coverage
The design of Insure Tennessee is based on private market principles that provide incentives to participants to engage in their health care by actively managing their health care costs. Through both programs, Insure Tennessee introduces a commercial health insurance experience which can help Tennesseans prepare for independence from public assistance.