Copays, disenrollment set Insure Tennessee apart
Under Gov. Bill Haslam's controversial new health proposal, people could be forced off public health insurance for late payments and employers could cut back how much they pay for employees' insurance.
These are two key ways the Haslam plan differs from traditional Medicaid programs throughout most of the rest of the country. As specifics of the proposal — designed to cover an additional 200,000 uninsured Tennesseans — trickle out, similarities and differences to Medicaid are becoming clearer.
Haslam's Insure Tennessee is designed to cover those who can't afford private insurance and don't qualify for TennCare — Tennessee's version of Medicaid. Although the plan has several components that distinguish it from Medicaid, the plan continues to draw ire from opponents who are staunchly against anything that remotely resembles the controversial Affordable Care Act, also known as "Obamacare."
Insure Tennessee has two plans — the Volunteer Plan for those who have access to a plan through work and the Healthy Incentives Plan for those who do not. Insure Tennessee applies to those Tennesseans earning less than 138 percent of the federal poverty level — roughly $16,000 for an individual and $27,000 for a family of three. For those with employer-provided insurance who meet that income requirement, vouchers would be available to help pay premiums. For those without access to insurance who meet the same income requirements, they would get coverage through the Healthy Incentives Plan.
The Volunteer Plan
The Volunteer Plan requires employers to pay at least half of the cost of insurance for an eligible employee. However, it could lead to a new potential benefit for employers: They could choose to reduce their share of the insurance contribution down to that 50 percent and allow an Insure Tennessee voucher to make up the difference.
"The behavior of individuals doesn't keep me up at night, but the behavior of certain employers who could take advantage of what on the face of it seems to be a lavish subsidy gives me pause," said Senate Minority Leader Lee Harris, D-Memphis.
The freshman senator said he's worried about the government replacing spending by the private sector, arguing it could lead to higher public costs in the future.
There are limitations if an employer chooses to reduce contributions, said Kelly Gunderson, a spokeswoman for TennCare.
"The costs associated with an employer reducing contributions and thus exposing themselves to higher shared responsibility payments likely far outweigh any savings associated with the type of employer action implicit in your question," Gunderson said.
If an employer were to change contribution amounts for a subset of employees, Gunderson said, setting up a "tiered" insurance system would create "substantial administrative costs."
Employers open themselves to discrimination claims if they reduce how much they contribute solely for those employees eligible for the Volunteer Plan, said Austin Madison, vice president of employee benefits for The Crichton Group, which helps companies weigh insurance options.
He said it's hard to predict what the employers will do without more information from the state about the Volunteer Plan. Specifically, businesses want to know how much will be allocated to the vouchers, referred to in the plan as a "defined contribution."
"I think that's the million-dollar question. We don't know what the contribution is going to be, we don't know how sizable it's going to be," he said.
Haslam spokesman Dave Smith said an actuarial study to help the administration determine the amount of the contribution should be complete before the start of the special session on Feb. 2.
The Healthy Incentives Plan
People who do not have access to employer-provided insurance are more likely to participate in the Healthy Incentives Plan, which is similar to TennCare as well as private insurance.
One key difference between the Haslam plan and either TennCare or traditional Medicaid is premiums. People making between 100 percent and 138 percent of the federal poverty level will pay roughly $20 monthly in premiums. If they fail to pay premiums for 60 days or more, they can be removed from the plan — a feature that is not found in traditional Medicaid and TennCare. People making under 100 percent of the federal poverty line will not pay premiums.
Mary Bufwack, CEO of Neighborhood Health, a system of community clinics, said in an email that these differences are important to distinguish the program from other government plans and "not unworkable if premiums and copays are reasonable. Many will be able to meet them."
Opponents to Medicaid expansion say the inability to remove people can lead to higher costs. TennCare is an entitlement program, meaning people can only be removed if they surpass the income ceiling. Under Insure Tennessee, people can be removed for making more money but also for not paying their premiums. Haslam could point to these two differences in response to criticisms by opponents of the plan.
The state is still evaluating whether there will be a re-enrollment period for people removed from Insure Tennessee rolls, Gunderson said.
Even those who support expanded coverage caution that premiums and copays could strain patients' wallets.
"These features concern us because some people right above poverty, even with jobs, don't have much financial cushion. If an emergency comes up, they could lose coverage or access to important care," said Michele Johnson, executive director at the Tennessee Justice Center.
In a twist that mirrors private insurance plans, providers will be able to deny services to someone who is required to pay copays but has racked up outstanding bills to health care providers.
This plan also has a "Healthy Incentive for Tennesseans" feature, an account in which participants earn credits to spend toward health care costs.
Anyone who participates in the Healthy Incentives Plan will be able to earn credits for the accounts through a variety of ways, such as disease management programs, completion of a health risk assessment or using the emergency room only for emergency situations.
Participants do not "own" the credits in the account, so if they are removed from the plan they do not keep the credits, Gunderson said. The credits roll over from year to year. The full list of activities to earn credits has not been finalized, she added.
Participants earning less than 100 percent of the federal poverty line will be able to use the credits toward pharmacy copays. The copays — $1.50 for generic prescriptions and $3 for brand name — will be the same as the pharmacy copays for some members of TennCare.
For those in the lowest income bracket, the Haslam plan would deduct copays from credits from the HIT accounts, similar to those paid by people with higher incomes. The proposal also would allow people who make under 100 percent of the federal poverty line to be reimbursed for out-of-pocket expenses such as dental care at the end of the year if HIT credits remain.
Haslam continues to stump for his plan. After meetings in Jackson and Memphis this week, he'll meet with residents in Knoxville, Chattanooga, Johnson City, Clarksville, Sparta and Murfreesboro next week, said Haslam spokesman Smith.
Reach Holly Fletcher at 615-259-8287 and on Twitter @hollyfletcher. Reach Dave Boucher at 615-259-8892 and on Twitter @Dave_Boucher1.
Insure Tennessee vs. entitlement programs
Premiums
Not found in Medicaid or TennCare
A component for one income level in the Healthy Incentives Plan
Disenrollment
A participant earning more than 100 percent of the federal poverty line can be removed from the Healthy Incentives Plan for not paying monthly premium for 60 or more days.
Surpassing the income ceiling is the only way to be removed from TennCare, which is an entitlement program.
Penalties
A provider can deny service to a participant earning more than 100 percent of the federal poverty line who has outstanding copay bills.
Who's eligible for Insure Tennessee?
Anyone earning 138 percent or less of the federal poverty level. That's roughly $16,000 for an individual and $27,000 for a family of three.