Medicaid, SCHIP, and Federal Authority⁴

Section 1115 Waiver - On January 1, 1994, Tennessee began a new health care reform program called TennCare. This program essentially replaced the Medicaid program in Tennessee. TennCare was designed as a managed care model. It extended coverage to uninsured and uninsurable persons who were not eligible for Medicaid. The TennCare program was implemented as a five-year demonstration program approved by the entity now known as the Centers for Medicare and Medicaid Services (CMS). The program received several extensions after the original expiration date of December 30, 1999. In July 2002, Tennessee began a new five-year TennCare demonstration program. The state was granted a waiver amendment approval on March 24, 2005, to end coverage of adults in the expanded eligibility categories - i.e., uninsured and uninsurable adults. TennCare continues to cover approximately 119,000 non-Medicaid eligible children.

CoverKids - Creates a separate, stand-alone health care program for all uninsured children under the age of 18 in Tennessee which will be a State Children's Health Insurance Program (SCHIP). The program combines state funds and Title XXI funds from the federal government to cover children and pregnant women up to 250 percent FPL. Eligibility is layered over current TennCare levels. CoverKids also offers a buy-in program for children who do not qualify for the subsidized product.

High-Risk Pool

The new Cover Tennessee legislation creates a high-risk pool called AccessTN. Prior to TennCare, the state operated a high-risk pool but it was disbanded when the state chose to cover uninsurable individuals under its TennCare waiver. The new pool will be funded by a combination of premiums, assessments on carriers and third party administrators, state appropriations, and possible federal funds pending grant release from CMS. Premiums charged to pool enrollees will be between 150 percent and 200 percent of a commercial benchmark plan after moderate medical underwriting. The state also authorized a premium assistance program to subsidize individuals who cannot afford the premiums.

Other

Cover Tennessee- In March 2006, Tennessee Governor Phil Bredesen (D) proposed several coverage expansions to the legislature. On June 5, the Governor signed into law Senate Bill 3895 which contains several coverage components including: CoverTN, CoverKids (SCHIP), and AccessTN (high-risk pool).

The CoverTN program aims to provide new, portable, and affordable coverage for the working uninsured in Tennessee who earn less than $41,000 per year, as well as for small firms that do not currently offer insurance. While CoverTN is a limited benefit plan, covered services will include, at a minimum, physician services, hospital services, outpatient services, mental health services, lab services, and generic pharmaceuticals. Under the CoverTN program, workers would be able to continue participation when they change jobs. During the first three years of the program, premium amounts charged to employers, employees, and individuals may not increase more than 10 percent per year to maintain affordability. The program is based on the three-share concept whereby participating employers, the State of Tennessee , and the individual each contribute one third of the premium. The state will contract with statewide carriers to offer two products with an average $150 premium per month. Premiums vary around this average based on age, tobacco use, and weight or body mass index. The benefit package will emphasize primary and preventive services with no deductibles and modest co-pays.

	Notes and Sources

Information presented in the profile was summarized in December 2006 from a review of state Web sites and reports, and through contacts with state officials. In most cases the profiles were reviewed by state officials; however, it is possible that states have implemented strategies that are not reflected in this profile.

² Tennessee has covered uninsured and uninsurable (or "medically eligible") children under its 1115 Medicaid waiver, although those categories are not currently open to new enrollment. Children who have been enrolled in these categories in the past are allowed to continue on the program as long as they continue to meet the criteria under which they were enrolled. Uninsured children whose Medicaid eligibility is ending are allowed to "roll over" into a demonstration category in one of two circumstances: (1) their family incomes are below 200 percent FPL, or (2) they have been determined uninsurable (or "medically eligible"). Children in Group 2 can be eligible at any income level.

⁴ The profile only includes Medicaid and SCHIP waivers intended to make comprehensive expansions to the uninsured. At this time, the profiles do not include Family Planning, Pharmacy Plus waivers, or long-term care waivers.

⁵ Urban Institute and Kaiser Commission on Medicaid and the Uninsured estimates based on the Census Bureau's March 2005 and 2006 Current Population Survey.