TennCare Block Grant Signed By Governor Lee Following Approval By Legislature

Lee Signed Legislation Friday Afternoon That Will Significantly Change The Way Tennessee’s Medicaid Program Receives Federal Funding.

Tennessee Capitol Building in Nashville

Photo: Gov. Bill Lee signs into law legislation authorizing a block grant for the state’s Medicaid program on Friday, Jan. 15, 2021.

Photo Credit: Facebook / Gov. Bill Lee

Published January 18, 2021

The Center Square [By Vivian Jones]-

Gov. Bill Lee has signed into law authorization that significantly will change the way Tennessee’s Medicaid program receives federal funding.

The Republican-majority House voted Friday morning to authorize Tennessee’s Medicaid program, TennCare, to implement a 10-year block grant in a party line vote, 70-22. Lee signed the legislation Friday afternoon. The Senate had approved the resolution Thursday.

The federal government currently funds a portion of TennCare’s costs, regardless of fluctuations each year. Under the block grant, the state would receive federal TennCare funds in a lump sum, allowing the state to keep the savings from running the program more efficiently and providing more flexibility in administration of the funds, officials said.

“Our TennCare system is one of the top Medicaid programs in the country and this new flexibility under the block grant model allows us to improve the health of Tennesseans and our communities,” Lee tweeted.

Cost savings from the state’s administration of TennCare are required to go back into the program, according to the state’s agreement with the federal government.

The final vote for authorizing the block grant came after a whirlwind first week of the legislative session, in which the proposal was rushed through six committees and both chambers in order to be authorized before the inauguration of President-elect Joe Biden.

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Tennessee becomes the first state to approve such a Medicaid funding change. TennCare provides health care services to about 1.2 million low-income and disabled Tennesseans.

State officials were notified of federal approval for the program last week after negotiating with federal Medicaid administrators since 2019, when legislation to begin the block grant application process was passed by the Tennessee Legislature.

Democratic Congressman Jim Cooper wrote Biden earlier this week to request his administration to rescind approval for the block grant as soon as possible.

“This action was carefully designed to handcuff your Administration and my state for ten years against the possibility of implementing the universal coverage goal of the Affordable Care Act,” Cooper wrote. “This radical waiver makes Tennessee the first block grant Medicaid state, in other words, treating Tennesseans like guinea pigs.”

Now that the Tennessee Legislature has approved implementation of the block grant and Lee has signed it into law, options for the incoming Biden administration to rescind federal approval are unknown.

During debate on the proposal, the block grant’s original sponsor in 2019, Sen. Paul Bailey, R-Sparta, said if Biden’s administration were to reverse approval, TennCare would go back to operating under the previous funding mechanism.

“If on Jan. 22, 2021, the new administration says, ‘We don’t want to have anything to do with this,’ and they try to reverse it, we revert back, as I just said, to the current waiver we are under,” Bailey said.

About the Author:

Vivian Jones, Center Square Staff Reporter

Vivian Jones reports on Tennessee and South Carolina for The Center Square. Her writing has appeared in the Detroit News, The Hill, and publications of The Heartland Institute.

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