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TennCare Teases Expansion Possibilities While Formally Submitting Block Grant Proposal

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Now the block grant ball is in the federal government’s court.

Tennessee’s Medicaid agency has spent months redesigning TennCare, after the Trump administration asked for so-called block grant requests. The 50-page proposal, which could reshape a program that serves more than 1.4 million Tennesseans, was officially submitted Wednesday afternoon, though with some last-minute changes.

State officials acknowledged that nearly all of the roughly 1,800 comments received in recent weeks were from people concerned about cuts to existing benefits. That’s because the block grant concept has historically been intended to save money, and Gov. Bill Lee calls the negative response “completely understandable.”

“I think the national conversation in years past about block grants has created a concern because the traditional idea of a block grant is that you get one sum of money, and that’s it. There are all kinds of risks associated with that,” he said on a conference call with Tennessee reporters Wednesday. “But this is not that kind of proposal at all.”

To assuage those fears, state officials added language to the request (download here with revisions in red) spelling out that, while not Medicaid expansion as envisioned by the Affordable Care Act, “Tennessee would seek to cover additional needy individuals who are not currently eligible for coverage.”

The new passages also give examples of how coverage might be expanded for existing beneficiaries, like a full year of coverage for women postpartum and providing mothers with dental benefits.

And in response to fears that the block grant would be used to slash existing coverage, the request now says this:

“Given that it is not the state’s intention to reduce the benefits received by TennCare members, the state commits that its use of this flexibility will be limited to benefit changes that are additive in nature.”

Adding benefits or covering more Tennessean hinges entirely the state being allowed to keep some savings that are already being achieved. Rather than relying on cutting costs going forward, Tennessee’s block grant proposal seeks to draw down more federal money, arguing that TennCare already spends about $1 billion less on Medicaid than annually projected.

State officials have proposed a 50-50 split of those savings, which is expected to be the key point of negotiation with the Centers for Medicare and Medicaid Services. The precise split could change, but Lee says it would have to result in more money for the state and retain safeguards for a recession when Medicaid rolls typically swell.

“There are a number of things that would make this a bad deal for Tennessee and for the people on Medicaid,” he says. “And they all would be deal breakers.”

Tennessee becomes the first state to submit a block grant request. As with any state-based change in Medicaid, CMS will now conduct its own process, including a public comment period, before granting the waiver.

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