Gov. Bill Lee has released details of the state’s proposal to the Centers for Medicare and Medicaid Services for about half, or $7.9 billion, of the state’s Medicaid funding to come through a federal block grant.

It would be the first program of its kind in the country if it is approved.

The Sycamore Institute, a self-described independent, nonpartisan public policy research center for Tennessee, reports a Medicaid block grant would cap federal funding to the state Medicaid program, slowing the expected growth of federal costs. Block grants often also seek to give states more responsibility over program design, such as benefits and eligibility, and a block grant could create budget challenges and opportunities when balancing the state budget.

“A block grant in essence means we would agree as a state to a certain amount of money from the federal government and ask them to waive additional regulations to allow the state to run the program the way they feel like and can run it and better for less money,” says Betsy Woods, associate state director, advocacy for AARP.

Essentially, the CMS would agree to a certain amount of money to reimburse the state for TennCare. If the money runs out, the state gets no more. It’s concerning when 20% of Tennesseans will be 65 and older by 2030.

Medicaid is a federal health care program run at the state level that provides inpatient and outpatient services to patients. In Tennessee, it is known as TennCare. There are 1.3 million Tennesseans on TennCare.

Medicare is a federal health care plan that is available to all Tennessee residents and U.S. citizens 65 years or older who have been a legal resident of the country for at least five years and have worked in the U.S. for at least 10 years.

Once the block grant proposal is released, there will be a 30-day window for public comment. It would then need to be submitted to the state Legislature by Nov. 24 for approval.

“We’re all kind of interested in how the proposal is done and if the legislation specifically speaks to inflation,” Wood adds.

Working uninsured

As the president and CEO of Sumner County’ Salvus Center, a safety net clinic, Jennifer Flanagan is concerned about what federal block grant funding could mean for the working uninsured. Safety net clinics were created across the state in 2000, and Salvus Center began in 2006 after TennCare rules changed and many people were dropped from the program.

“With Medicaid changes Tennessee’s asked for the work requirement, but Medicaid takes adults where working has not been a requirement,” Flanagan explains. “So if that becomes a requirement and those adults are taken off the Medicaid roles, where do they go?”

For Salvus, it might increase the number of working uninsured based on the parameters that are being used. For example, if an individual’s income levels are adjusted, that means a person who falls within the poverty level guidelines may move out of the poverty level.

“But if they adjust what those qualifying guidelines are and reduce them, there will be more working uninsured in the community, without insurance, and yes we will be impacted,” she acknowledges.

Salvus is one of many safety net clinics across the state. It was formed by the CEOs of the two hospitals in Sumner County as a way to alleviate the number of primary care patients being seen in the emergency room, which uses financial and human resources from the ER that may take away from people with emergencies.

Plus, emergency rooms are not built for follow-up care.

Salvus was formed to provide a continuum of care to the working uninsured in Sumner County. Patients at Salvus have a copay based on a sliding scale of their income and must live in or work in Sumner County. There also must be some kind of income in the household.

Flanagan says that as a safety net clinic, it has to produce on a quarterly basis evidence of all patients seen, unique patient visits and the clinic is reimbursed for those visits at a particular level. It used to be $25 per visit but Salvus changed its reimbursement criteria. Now it’s a percentage of overall visits.

“Because of who we serve – and we’re a significant size for our community, we actually lost money on that,” she points out. “But it’s an organic process, and the health department is asking those questions and they’re reviewing that.

“Their intent was not for us to have lesser monies. The intent was to have us be able to use all the monies given to us. I think that was an unintended consequence.”

Salvus partners in the community with doctors and hospitals so patients get discounted rates and can afford care. Last year, Salvus had about 1,300 patients with 3,800 patient visits, a number that has been steadily increasing. In the last 13 years, the center has had more than 64,000 patient visits, some coming in for care who would otherwise have gone to an ER or not sought care.

“It keeps our working people working, because if they’re not working, they’re not getting paid,” Flanagan explains. “They support their kids. Their kids are in school, they keep their homes. They’re buying product in the community – it is really a safety net clinic. Come see us when you have a cold before you get bronchitis, you might be out an hour instead of three weeks.”

Flanagan says 88% of their patients are at 200% or more below the poverty level, and from all kinds of occupations, including a rising number of self-employed.

“As our society has evolved, we have entrepreneurs, we have self-employed people with their own businesses who, as the cost of insurance changed, so did their ability to secure it for themselves or their employees,” she acknowledges.

A few years ago, Salvus gave a Child and Family Services navigator office space so their patients could sit with her to see what programs they qualified for, whether it was TennCare or the ACA Marketplace. Flanagan says 0.7% were able to go on to the ACA because the rest could not fathom the deductible on top of a high premium.

“Even if you have a base reasonable premium, but you have a $5,000-$7,000 deductible, that’s beyond your cash means,” she says. “That will prevent people from going to seek health care. The perception of the working poor being the recipients of Medicaid really needs to be adjusted, because over the past decade, there are so many more reasons that people are uninsured for health care.”

She has even seen patients who have to work two jobs to make ends meet get priced out of TennCare, but do not have enough money to pay the premiums on commercial health insurance.

“I think it’s very important that health care is not seen as a political football, that health care is a human issue,” Flanagan says. “It should be a bipartisan human issue that people who are in the federal poverty level are as entitled to high quality health care as anyone else who might not be in that circumstance.

“So how do we come together to create delivery systems that works?”