House approves bill to initiate TennCare block grant negotiations

State Rep. Timothy Hill, R-Blountville, stands on the House floor as his TennCare block grant proposal is debated. The House voted 68-21-1 to pass the bill.

The Tennessee House of Representatives voted 68-21 Thursday to approve a bill that could transform how TennCare, the state’s Medicaid, program is funded. 

Spearheaded by state Rep. Timothy Hill, R-Blountville, House Bill 1280 requires the governor, acting through his commissioner of Finance and Administration, begin negotiating with the federal government ways to fund TennCare through a block grant, or lump sum payment. 

If the governor and Centers for Medicare and Medicaid come to an agreement, the plan would have to go back before the Tennessee General Assembly for approval before it could take effect. 

Should the block grant be approved, Tennessee would be the only state in the nation to fund its Medicaid program using this method. Under the current program, the federal government pays more than $7.5 billion, or 65 percent, of the cost of TennCare, which covers roughly 1.3 million Tennesseans. 

While he believes block-grant funding could benefit Tennessee, Hill said he did not think a lump sum payment would work for every state. 

“Block grants are probably not going to be for every state. You’ve got to be in a similar condition as Tennessee, which is being fiscally managed very well and has a Medicaid program that is very-well run to begin with,” Hill said. 

“I think we can make a solid case that Tennessee is in good shape, but we could be in great shape by Tennesseans taking control of the (Medicaid) program to make it Tennessee-specific. So it may not work everywhere, but we definitely believe it can work in Tennessee.” 

Each time Hill presented the bill in committees and on the House floor, he said the proposal would, “return tax dollars to our citizens, reduce the cost of compliance and serve more people with existing dollars.” 

Meanwhile, Democrats attempted several times, but ultimately failed to amend Hill’s bill to include negotiation parameters, such as guarantees to pre-existing condition coverage. 

Just before a final vote on the House floor Thursday, Rep. Mike Steward, D-Nashville, made a last-ditch effort to attach an amendment giving the governor authority to expand Medicaid coverage under the Affordable Care Act, but it was quickly defeated. 

Michele Johnson, executive director of the Tennessee Justice Center, said the bill will lead to a cut in federal Medicaid funds. 

“The heaviest cuts will fall on those who can least bear them — children with special health care needs, seniors in nursing homes and people with pre-existing conditions,” Johnson said in a statement. 

“A block grant will hurt patients, the healthcare infrastructure of our state, and our economy. Our elected officials need to solve the real-life problems that families face instead of playing politics with Tennesseans' healthcare.”

A Sycamore Institute analysis of how a block grant might impact TennCare determined the amount of federal funding for TennCare would depend on details that are not yet known, but would have to be negotiated. 

“The degree to which states would gain flexibility on program design rules is even less clear,” the Sycamore Institute’s Policy Director Mandy Pellegrin wrote in the report. 

“These policies could create challenges, opportunities, and difficult trade-offs for state policymakers required to balance the budget.” 

The Senate Commerce and Labor Committee is scheduled to hear the bill on Tuesday. Hill said a vote on the Senate floor could happen as early as two weeks from now, while Gov. Bill Lee has already expressed support for the bill.