First National Health Policy Conference
February 1, 2001
John F. Tighe
Deputy to the Governor for Health Policy
State of Tennessee
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TennCare
• A managed care program created in 1994
for poor and uninsured Tennesseans under
an 1115 waiver
• expanded the Medicaid Program to
uninsured and uninsurable adults and
children
• totals $5.2 billion for FY 2001
Managed & Behavioral care program $3.7 billion
Other (MH/MR/LTC)
$1.5 billion
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Features of TennCare
• Managed through HMOs
• Carve-outs
Behavioral (BHO)
Long-term Care (state)
Medicare cost sharing/pharmacy (state)
• Current Challenges
Largest HMO in exigency
Second largest in supervision
Third largest in rehabilitation
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Business Model
•
•
•
•
•
Actuarially based funding
Twenty rate cells
Risk and utilization adjusted
85% Medical loss ratio
Three profit/loss risk band options
– Full risk
– Shared at break-even
– 2% corridor with risk beyond
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Who does TennCare Serve?
TennCare Population
(as of October 2000 - 1,356,124)
800,000
600,000
400,000
200,000
0
Medicaid
Medicaid Duals
Uninsured
Uninsurable
Totals
Medicaid
Uninsured/Uninsurable
637,071
165,514
409,830
143,709
802,585
553,539
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TennCare Population
(as of October 2000 - 1,356,124)
Children
Adults
500,000
500,000
400,000
400,000
300,000
300,000
200,000
200,000
100,000
100,000
0
0
Medicaid
Uninsured
Uninsurable
Totals
350,484
196,858
6,092
553,434
Medicaid
Uninsured
Uninsurable
Totals
452,101
212,972
137,617
802,690
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TennCare Uninsured/Uninsurable Population
by Poverty Level
Children
Adults
300,000
300,000
200,000
200,000
100,000
100,000
0
0
Below 100%
101% to 199%
Over 200%
Totals
152,326
47,486
3,138
202,950
Below 100%
101% to 199%
Over 200%
Totals
240,443
89,855
20,291
350,589
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What does it cost?
Annual Costs per Enrollee
Children
Adults
Medicaid
$1395.63
$3358.04
Medicaid Duals
$0
$1504.16
Uninsured
$957.55
$2126.28
Uninsurable
$1847.27
$4087.62
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Funding for MCO Payments
(Uninsured and Uninsurable Adults)
State
(Gen. Fund)
State
(Prem. Tax)
Federal
Other
Total
$137,962,273
$17,106,164
$663,549,802
$36,689,939
$855,308,178
Uninsured
(per enrollee)
$367.12
$42.53
$1,651.21
$65.42
$2,126.28
Uninsurable
(per enrollee)
$610.39
$81.75
$3,167.86
$227.62
$4,087.62
Total U//U
Adults
Based on May 2000 Enrollment Data
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Current Challenges
Challenges
• Enrollment Growth
• Costs
– Drug costs and overall medical inflation
– Public commitment
• Access
– Dental
– Provider commitment, especially specialty physicians
• Members
– Smooth member transition
– Lawsuits / consent decrees
– Due process and appeals
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Challenges (cont.)
• Commercial HMOs not participating
– Prudential out in 1999
– Blue Cross out in 2000
– United dropped out of procurement
• TennCare: the whipping boy for all of state’s
problems
• Program integrity
• Slow/indecisive HCFA
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Accomplishments
What has Tennessee accomplished
through TennCare?
•
•
•
•
•
•
Increased access to health care
Decreased number of uninsured Tennesseans
Increased primary care and preventive services
Decreased inappropriate use of ER services
Decreased inpatient admissions and days
Improved health outcomes
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AND we have achieved these benefits
for:
•
•
•
•
•
1 in 2.4 Tennessee children
1 in 5.4 Tennessee adults
Tennesseans living in poverty
The working poor
Tennesseans with pre-existing medical conditions
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Conclusions
•TennCare is a Good Deal for Tennesseans
•But, we need Federal Commitment
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TennCare is a Good Deal for
Tennesseans
• For approximately 18% of the cost (or $367/year
for an uninsured and $610/year for an uninsurable)
we are providing needed health care insurance to
approximately 350,000 adult Tennesseans who
lack insurance.
• Tennessee has a health care insurance program for
uninsured/uninsurable adults with a better Federal
match than even a CHIP program.
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TennCare is a Good Deal for
Tennesseans (cont.)
• Tennessee’s economy benefits from an additional
$663 million in Federal funds. This benefit would
be lost to local communities if TennCare’s
uninsured and uninsurable enrollees were
eliminated from the program.
• Despite the many challenges, Tennessee has
achieved significant improvements in health
outcomes and access to preventive care.
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But We Need Federal Commitment
Themes:
• Greater state flexibility
• Better coordination among discrete programs
• Significantly improved communication between HCFA and
the states
Specifically:
• Stop raising the requirements for managed care programs
• Simplify the waiver review process
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But We Need Federal Commitment
(cont.)
• Help us maintain the fiscal integrity of the current
programs
– Cost sharing
– Use of excess S-CHIP funds to enhance services
– Flexibility in containing drug costs
• Get away from the “All or Nothing” approach
– Benefit package design
– Quickly change benefits and limit enrollment
– Targeted HCBS
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But We Need Federal Commitment
(cont.)
• Encourage cooperation and coordination with the
private sector by giving states:
– Freedom to set reasonable cost-sharing
– Freedom to use Medicaid funds to pay for part of the
employee share of premiums
– Tiered co-pays/co-insurance for pharmaceuticals
similar to the private sector
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For Additional Information:
www.state.tn.us/tenncare/
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