Tenncare Case Study

In 1994 Tennessee began the TennCare program as a way to control Medicaid associated health care costs that were rising at a rapid rate (Baggett, Harkey, & Alexander, 1999). While many other states were going through similar issues at the time, Tennessee did something vastly different. TennCare not only aimed at managing healthcare costs, it also expanded eligibility and coverage to the uninsured, and the uninsurable (Baggett, Harkey, & Alexander, 1999). This was a controversial measure because it didn't make sense to expand the eligibility and coverage to more people when the state's cost of the program was increasing. In order to help offset the costs of the TennCare expansion the state government contracted with managed care organization
(MCOs) so the state would only have an oversight responsibility as opposed to an administrative one (Baggett, Harkey, & Alexander, 1999).
Rationale of TennCare
The TN state legislature needed to reform the Medicaid program they had in place, make the requirements to qualify for Medicare state resources stricter, or raise taxes in order to offset the increase of healthcare costs (Baggett, Harkey, & Alexander, 1999).
Increasing taxes is rarely a popular choice for politicians who want to be reelected, and reducing the number of individuals who would be eligible and benefit from the program already in place was unpopular as well. Thus, they landed on the option of reforming the program as a whole in order to maximize the social welfare function. The new program became known as TennCare and used the rationales of utilitarianism and Rawlsianism to justify the program. The reason TennCare follows utilitarian and Rawlsian principles of benefiting the least advantaged of society in a manner that will do the greatest good overall for those who are affected by the program (Vining & Weimer,
2016).
TennCare was designed to manage care and control costs in a way that would not create a cost increase while seeking to expand access to healthcare while staying within budgetary constraints while also improving the quality of care received (Baggett, Harkey, & Alexander, 1999). In order to provide coverage to the uninsured and uninsurable while still staying in budgetary restrictions the legislature needed an efficient way to offset the cost. The legislature decided that those who were covered under this provision would share the cost by paying premiums, deductibles, and copayments that are based on federal poverty guidelines and increase on a graduated fee schedule (Baggett, Harkey, & Alexander, 1999).
The Effects of TennCare
Like many government policies, TennCare was not without its problems. There were issues with overseeing the MCOs, and controlling multiple other expenditures, however the TennCare program has been reapproved twice since its inception (Baggett, Harkey, & Alexander, 1999; Luna & Thacker, 2016). TennCare was able to keep the number of uninsured Tennesseans down until the economic downturn in 2007. Prior to 2007, the average number of uninsured Tennesseans was 6.57% (Luna & Thacker, 2016). During the economic downturn, the percentage of uninsured Tennesseans rose substantially. From 2007 to 2011 the average of uninsured Tennesseans shot up to nearly 10% (Luna & Thacker, 2016). Thankfully healthcare reform was on the way to assist many Tennesseans and others across the country. The passage of the Affordable Care Act (ACA) broadened the eligibility requirements for many uninsured and uninsurable individuals. This increasing access to healthcare has lowered the uninsured rate across the country and in Tennessee as well. Since 2011, the number of uninsured in Tennessee has decreased annually and in 2016 the number of uninsured reached an all-time low at 5.5% (Luna & Thacker, 2016).
Measuring Policy Outcomes
Surveys were used by Luna & Thacker (2016) to determine the status of respondent’s health insurance, reasons health insurance was not obtained by the uninsured, satisfaction with healthcare that respondents received, and evaluate the quality of health care and coverage. While surveys are a valid way to measure policy outcomes, they are not always accurate depending on the sample size and sample criteria. Also, Luna & Thacker (2016) did not validate if the information they recieved was objective or subjective. Taking hard data such as cost of healthcare and using measurable data such as a derease in blood pressure or cholestoral and crossreferencing the two data sets in what many have called a quality per cost analysis should yield a better idea of whether the healtcare policy is working. While Luna & Thacker (2016) were able to ascertain that 92% of respondents where happy with the healthcare they received and there was a downward trend in respondents using EMS or emergency rooms for primary care, there is no evidence that shows the cost of the healthcare program is efficient and benefiting Tennessee as a whole.
TennCare Alternatives
While giving healthcare coverage and access to the uninsured and uninsurable is just from a utilitarian perspective, is it just that taxpayers are subsidizing the healthcare of others without any benefit gained by them or their families?
Many state funded socialized healthcare systems around the world have been found to be more effective in terms of cost, efficiency, and patient health (de Bruin, Baan, & Struijs, 2011). Instead of using a Medicaid program with limits, TennCare could change to a single-payer system that allows everyone in the state access to medical coverage and utilize the entire state as a funding pool as opposed to just individuals that currently qualify for TennCare. By using the entire population of the state and the income of all Tennesseans in order to fund a state-run program budgets could be more accurately made and the state would have more leverage to control costs because of their increased buying and negotiating power.
The Future of TennCare
The possible impact of TennCare on the policymaking in Tennessee would more than likely come into play in the realm of budgeting and finance. Currently under the ACA the funding of TennCare has increased making it more stable, however if legislation that is similar to the recently proposed American Healthcare Care Act (AHCA) is proposed funding could be a major issue. The reason funding could become a major issue is the burden of funding Medicaid would shift from the federal government to the state government
(Hume, 2017).
Conclusion
TennCare is a program that was developed to help the uninsured and the uninsurable gain access to healthcare. The reasons for the passage of TennCare were to attempt to diminish the rising costs of healthcare while also giving coverage to those across Tennessee who needed it the most. This benefited not only the new individuals who were able to get insurance, but also the other taxpayers because the loss of income that hospitals and other medical care providers was not being passed on to those with insurance to offset their losses. The program, while not perfect, has been beneficial and can continue to be so if there is not outside interference from the Federal Government.