Tennessee Legislature Races To Accept TennCare Block Grant Before Biden Inauguration

Jan 14, 2021

Many physicians spoke against Tennessee's block grant proposal before it was submitted in late 2019.
Credit Blake Farmer / WPLN News

Tennessee lawmakers rarely debate consequential legislation in the first few days of a session. But the General Assembly is forgoing precedent to alter how the state’s Medicaid program receives federal funding, and in the process will be altering roughly a third of the state budget before the Biden administration takes over.

Passage is a given. The same Republican majority told TennCare to seek this so-called “block grant” for Medicaid, which has been a dream of conservatives. Now that dream is nearly reality.

But in less than a week, the country will have a Democrat in the White House, leading a party that has opposed block grants for Medicaid and argued that they only lead to cutting benefits and beneficiaries from programs.

On Wednesday, TennCare officials told lawmakers the Biden administration might embrace the plan, since it’s designed to expand benefits. The state is primarily cashing in on savings it has already been generating for the federal government by running one of the country’s skimpiest Medicaid programs.

But if that’s true, Rep. Harold Love, Jr., D-Nashville, asks, “Why now when we’ve got the whole session? Unless there’s been some communication that you need to do it fast, otherwise it won’t get done.”

He and other Democrats suggested during a debate on the House floor Wednesday night that the only reason to rush is because the state believes President Biden would rescind the offer.

TennCare Director Stephen Smith says he has not discussed the block grant with the Biden transition team.

One of the first questions when the Trump administration announced the nation’s first Medicaid block grant was whether it would last beyond Trump’s final day in office. Seema Verma, the head of the Centers for Medicare and Medicaid Services, acknowledged Biden’s appointee to her post could undo it all, though she argued the next administration should be open-minded.

More: Trump Administration Approves TennCare Block Grant, Potentially Expanding Coverage While Concerning Health Advocates

TennCare officials have noted all the ways the program is not a typical block grant, which caps funding and grants the recipient flexibility in exchange for running more efficiently, often involving cuts. The 228-page agreement does not allow the state to reduce benefits for the 1.4 million already on TennCare or cut any groups that currently qualify.

And rather than find new savings, TennCare’s Stephen Smith says the state just has to keep doing what it’s doing and it will receive an extra $6 billion over the next 10 years. The big question mark is how that money would be used. It could be spent well outside what are typical Medicaid benefits, on needs like housing, job and nutrition programs.

But the money could also be used to expand benefits in a more targeted way. For instance, TennCare officials have wanted to extend the length of time new mothers get to stay on the program. There’s also been a suggestion that the income caps to qualify for TennCare could be raised, thus expanding coverage to some of the same people who have been denied since Tennessee opted not to expand Medicaid under Obamacare.

Democrats — and a who’s who of patient advocacy groups — say they don’t trust TennCare enough to act in the best interest of Tennessee residents rather than the program’s bottom line. But there are a few Republicans nodding to the prospect of the block grant functioning as a backdoor expansion, including Sen. Rusty Crowe of Johnson City and Sen. Becky Massey of Knoxville.

“I know there’s a lot of nervousness among the general population about a new program and what it can mean to folks that are really some of our most vulnerable people,” Massey says. “I also know that we do have folks that are working that are having to decide between insurance and food, and if through doing this and through some of the shared savings, if we can provide some more health care to some more Tennesseans, I think we need to take a shot at it.”