"We think we have a plan in Tennessee that fits our citizens and also is an answer to budget challenges we'd face in the future," Haslam said during a press conference Monday morning.
The Tennessee plan, which Haslam said will be debated by a special session of the state legislature, is a two-year waiver program with two tracks. It will offer vouchers to people earning up to 138 percent of the federal poverty level — or about $16,100 for an individual — to help purchase employer coverage they would otherwise struggle to afford. Other newly eligible individuals can sign up in health plans modeled after health reimbursement accounts, with people earning above the poverty level required to pay premiums and copays. Haslam's administration didn't immediately offer details about how those payments are structured.
In Tennessee, about 142,000 low-income adults fall into what's known as the coverage gap — people who earn too much to qualify for the existing Medicaid program but not enough to qualify for subsidies to purchase private coverage on the Obamacare health insurance marketplaces. That's according to a November estimate from the Kaiser Family Foundation, which finds that 3.8 million poor adults across the country fall into this gap.
Haslam's announcement comes after almost a year-and-a-half of discussions with the federal Centers for Medicare and Medicaid Services over an acceptable Medicaid expansion alternative. That may have been the easiest part for Haslam, who joins Governors Matt Mead of Wyoming and Gary Herbert of Utah in offering a Medicaid expansion plan in the month since the midterms passed.
The moves aren't entirely surprising. These governors had said they wouldn't accept the Obamacare Medicaid expansion as written, but they were exploring other ways to take federal funds while crafting a plan that worked best for their states.
"Even though I have serious disagreements with the law, this is the current law," Mead said last week at a forum hosted by the Western Governors Association, which was moderated by a Washington Post reporter. "How do we as a state make the best of it?”
But these most recent elections saw Republicans solidify their power in state legislatures, which were already resistant to the idea of Medicaid expansion. The more conservative statehouses in 2015, coupled with the uncertainty of what the Supreme Court and a Republican-controlled Congress will do to the health-care law, could make expansion an even tougher sales job for Republican governors who want to take advantage of the ACA's federal funding.
Nine Republican governors have expanded Medicaid so far, while Indiana Gov. Mike Pence is still negotiating with the feds on leveraging an existing state program to expand coverage.
The prospect of expanding Medicaid faces another unique challenge in Tennessee — the memory of a previous ambitious state-funded effort to expand coverage to low-income adults that was abandoned about a decade ago. In 1993, the state greatly expanded program eligibility to become one of the nation's most generous programs, anticipating that a shift to managed care would produce the savings to pay for additional beneficiaries. Enrollment in the Tennesseee program grew from about 750,000 people to roughly 1.5 million in less than a decade, while Medicaid's portion of the state budget quickly swelled and got wrapped up into a fight over a state income tax. By 2005, the state had pared back benefits and kicked about 170,000 people off the Medicaid rolls under a Democratic governor.
"Unfortunately, that memory is fresh in everyone's mind," Tennessee Medicaid director Darin Gordon said during a health-care conference in Washington this October.
At the time, he described the challenge Haslam's administration faced as it crafted an alternative plan: "We're trying to figure out how can we learn from that history and design an approach that will put us in a better position and give other folks comfort that we won't be repeating the same experience."
Reid Wilson contributed to this report.