NASHVILLE -- They staged a die-in here Wednesday night -- to mourn the demise of one of the nation's most innovative health insurance programs for the working poor and to dramatize what advocates say will be the human toll of a bitter government decision.
On Jan. 10, Tennessee Gov. Phil Bredesen, a Democrat elected in 2002 on a promise to rescue TennCare, announced he is cutting 323,000 low-income adults from the program and limiting services for 400,000 others. Like many other governors, Bredesen said that Tennessee's expanded Medicaid program is devouring the state budget and that he cannot afford what had been hailed as one of the most generous government health plans in the nation.
"It might not be the level of care we want to provide, but it's the level of care we can afford without bankrupting our state," said Bredesen, a former mayor who made millions as a managed-care executive.
The announcement sent shivers through health care advocates nationwide who see in TennCare's retreat the start of a bleak trend to scale back government-paid care at the same time the private sector is trimming benefits. A day later, Florida Gov. Jeb Bush (R) proposed giving Medicaid clients vouchers for private health coverage, making Florida the first state to let insurers set benefits for poor clients. And this week, New York Gov. George E. Pataki (R) is scheduled to slash $1 billion from his state's Medicaid program.
As President Bush attempts to cut the federal deficit in half within five years, governors are girding for battle. Though eager to restructure Medicaid, the joint state-federal health program for low-income Americans, the National Governors Association warned last month it would oppose "any deficit reduction strategy to simply shift federal costs to the states."
The TennCare saga -- from its historic creation a decade ago to its precipitous collapse today -- illustrates the nation's struggle to provide medical care for millions of Americans who are not poor enough to qualify for Medicaid but not wealthy enough to afford private insurance. In a move hailed as a national model, Tennessee leveraged additional federal money to offer a more modest package of managed-care benefits to traditional Medicaid clients as well as the working poor who were uninsured.
But years of mismanagement and court battles, an aversion to higher taxes and managed care, and runaway prescription drug spending have created a system that threatens to swamp other state programs, such as education. The result is a severe retrenchment in Tennessee, from one of the broadest, most creative programs to one that will now barely exceed the minimal coverage guaranteed under federal law.
"This is where the rubber meets the road with regard to states' ability to finance care for low-income people," said Diane Rowland, executive director of the Kaiser Commission on Medicaid and the Uninsured. "It means the loss of coverage for thousands of people, and when they lose Medicaid, there is often nowhere else to go."
It could get worse. Mark McClellan, head of the federal Centers for Medicare and Medicaid Services, said that his agency encourages experiments that cover more people in the way TennCare has, but that budget realities could force a retreat: "The states do not have to provide this coverage."
In a state where nearly 25 percent of the residents and 40 percent of all births are covered by TennCare, the impact will be felt in many quarters.
The state will lose $1.1 billion in federal matching money. Nashville General Hospital CEO Roxane Spitzer expects to lose $12 million in revenue from patients who had been covered by TennCare; other hospitals say they may be forced to close.
Law enforcement officials such as Robertson County Sheriff Gene Bollinger predict that many of the mentally ill patients cut off TennCare will put new strains on the criminal justice system.
Already, TennCare recipients are frantically squeezing in doctor visits, drug purchases -- and the occasional political activism -- before they are officially dropped.
Despite her joint pain, fatigue and muscle spasms from lupus and multiple sclerosis, Lori Smith was standing outside the War Memorial Auditorium here Wednesday, denouncing Bredesen as he held a black-tie dinner for state legislators two days after cutting TennCare.
