By Zachary Toillion
Governor Haslam surprised many political observers on Thursday when he announced plans to pursue Medicaid expansion in Tennessee. In the Affordable Care Act, known to many as “Obamacare”, states were originally required to expand Medicaid. In 2012, the US Supreme Court ruled the requirement unconstitutional, allowing states to decide whether or not to implement the expansion. Since the ruling, states with Republican governors have largely rejected the expansion while states with Democratic governors have unanimously adopted the measure.
The Medicaid Expansion expands Medicaid eligibility to 138 percent of the federal poverty line. If the expansion is accepted, the federal government funds 100 percent of the cost of expansion until 2017, funds 95 percent of it from 2017 until 2020, and funds 90 percent of the cost of expansion from 2020 onwards. The federal government already funds 57 percent of the cost of Medicaid, while requiring states to fund the other 43 percent.
In March of 2013, Haslam rejected expanding the traditional model of Medicaid. Haslam instead suggested a plan that would use federal funds for private plans to cover the expansion would be better for Tennessee.
The private option has been successfully implemented in Arkansas and Iowa, both of whom have conservative elements in their state legislatures that would not expand Medicaid outright. Under the plan implemented by Arkansas and Iowa, a new tier of insurance was created for those between 100-138 percent of the federal poverty line in which citizens were eligible for government subsidized private insurance. Earlier this week, Pennsylvania Gov. Corbett announced his state would also pursue such a plan.
This type of option appears the most likely to pass the Tennessee legislature, which has Republican supermajorities in both the House and Senate. Only nine Republican Governors across the country have expanded Medicaid, many from states won by President Obama in 2012, and only two other Republican Governors have expanded Medicaid in states that voted for Mitt Romney in 2012- Gov. Jan Brewer of Arizona and Gov. Dalrymple of North Dakota.
According to the Kaiser Family Foundation, 126,000 Tennesseans would become eligible for coverage. Thus far, 27 states and the District of Columbia have implemented expansion, and three other states are debating the issue. Haslam is expected to send his plan to the Department of Health and Human Services this Fall for approval. Haslam’s plan would require approval from the state legislature.