TennCare reform to dominate coming session of Legislature: local lawmakers

Monday, January 05, 2004
BILL HILES State Gazette

"I think the governor will come up with a fix for TennCare with changes other than just spending more money on it," said Rep. Craig Fitzhugh, D-Ripley. "We can't continue just to spend more money on the program."

State Sen. Mark Norris, R-Collierville, believes TennCare will have to be scrapped.

"Topping the agenda, whether we like it or not, is to fashion a replacement for TennCare," he said. "It's just not viable because it would take every dollar of new state revenue to maintain it and we just can't do that."

The $7.1 billion health-care program that serves 1.3 million people who are Medicaid-eligible, uninsurable due to medical conditions, disabled, or uninsured children has been a source of unrest with legislators as they seek to deal with the state's sluggish economy and making revenues and expenditures balance.

The federal government pays two-thirds of the cost, with a projected $1.8 billion coming during the current budget year from state taxpayers and the remainder from enrollees' premium payments and other sources.

TennCare replaced Medicaid, the joint state-federal health insurance program for the poor and disabled, in 1994.

The goal was to use private managed-care organizations, or MCOs, to deliver health care to the Medicaid population for less money. The state intended to use the savings to expand coverage to the uninsured.

Gov. Phil Bredesen has commissioned a $2.6 million audit of TennCare by McKinsey & Co., a management-consulting firm.

"The governor has told us (TennCare's) not viable and we need to do something else," Norris said. "Our objective is not to make it more difficult for the uninsurable to get coverage but, on the contrary, to help them because they're the ones who are being denied coverage now."

Norris said TennCare will have to be changed dramatically.

"It will have to be modified substantially," he said. "We may have to develop incentives for private insurance companies to provide coverage through a risk pool."

Norris sponsored the bill last spring that ordered the governor to make a study of TennCare and report to the Legislature on its viability.

Pinion said TennCare and state programs subject to lawsuits have denied needed funding to other areas of state government.

"In 1989 we funded higher education better than any other state in the Southeast and now we're at the bottom," Pinion, who represents northern Dyer County, including Newbern and Trimble, said. "We've cut higher education because of what we had to do for K-12 education and prisons in response to lawsuits.

"Because higher education can't sue us we've cut it ," he continued. "we've got buildings on some of our campuses that are not even able to be used because we've deferred maintenance on them."

Fitzhugh, who represents the southern portion of Dyer County, including most of the city of Dyersburg, said the faltering economy has led to a funding problem in the state's pension plans for employees due to underperforming investments.

"We've also got to try to do something about a cost-of-living raise for our employees," he said. "They didn't get a raise last year."

Norris, whose senatorial district includes all of Dyer County, said he also intends to work on workers' compensation reform and a homestead exemption during the upcoming session.

"Tennessee is not competitive with surrounding states and as a result we're losing jobs," he said. "Our workers' compensation system make it difficult to recruit new industry and to retain existing industry."

Norris said Tennessee is one of only two states that have court-based workers' compensation systems and he wants to move to a more administrative-based system that uses mediation instead of adversarial court decisions.

He said he hopes to get a homestead exemption passed by both houses of the General Assembly this year so it can be passed a second time in the next General Assembly and put on the ballot during the 2006 governor's election.

"It would give older Tennesseans a freeze on their property tax beyond a certain age - probably 65, "Norris said. "That would mean that the appraised value of the homes of our elderly would be frozen and their assessments would not increase with the value of their homes."

He said a constitutional amendment is needed because the Legislature passed a similar law in the 1980s that was found unconstitutional because it discriminates against a class of taxpayers by favoring the elderly.

Tennessee's General Assembly reconvenes on Jan. 13. The legislators likely will recess briefly for Martin Luther King's birthday and then go back to work, Fitzhugh said. Bredesen is scheduled to present his budget message the first week in February.