Tenn. Democrats urge White House to void Gov. Lee’s Trump-inspired overhaul of TennCare financing

NASHVILLE —Democratic lawmakers are asking President Joe Biden to rescind a Medicaid block grant waiver approved in the final days of the Trump administration.

The waiver, which gives Gov. Bill Lee and the Tennessee General Assembly unprecedented control of federal funding for TennCare, was approved by the Republican-controlled legislature on Jan. 15.

In a letter to the new administration, Democrats are asking Biden and the Centers for Medicare and Medicaid Services to annul Trump’s 11th hour effort to undermine Tennessee’s Medicaid program and the incoming administration.

If the waiver moves forward, Tennessee would be the first state in the nation to dare attempt a financing structure that partially caps Medicaid spending.

More than 1.5 million Tennesseans were enrolled in TennCare in December. The TennCare waiver does not extend health coverage to Tennesseans who do not currently qualify nor does it guarantee improved benefits for current enrollees. The waiver does give the supermajority unprecedented influence over TennCare policies and benefit with much less federal oversight.

A Medicaid policy expert from Georgetown University says the waiver’s block grant financing structure is illegal simply because Congress has not authorized any such scheme.

Instead of pursuing extreme, partisan policies, Democrats say the Tennessee legislature should be focused on reforms that make healthcare more affordable and extend health coverage to Tennesseans who have lost their insurance or are not offered insurance through work.

Before the pandemic hit, nearly 700,000 Tennesseans, including 15 percent of working-age adults, did not have health coverage.

The recent history of Medicaid block grants

In 2017, President Donald Trump’s top priority was to repeal and replace Obamacare. The vehicle to do so, which failed famously, was the Graham-Cassidy plan.

One of the most controversial components of that legislation was a proposal convert the financing for state Medicaid programs from roughly 2-to-1 match-spending to a set, predetermined chunk of cash known as a block grant.

The legislation would have capped federal Medicaid spending, which would have resulted in $160 billion worth of cuts. Trump included the Medicaid block grant concept in his 2019 budget proposal — this time predicted at $1.5 trillion worth of Medicaid cuts.

Like the legislation before, Trump’s budget failed to get any traction, but that did not stop Trump-loving Republicans in the General Assembly from adopting the idea as their own.

In 2019, the Tennessee legislature passed a law forcing Gov. Bill Lee’s administration to negotiate a block grant deal for state’s $12.7 billion Medicaid program TennCare.

The proposal was submitted that November, but the waiver was not approved until this month — just days before the Trump administration will leave office.

Breaking from decades of norms, the supermajority suspended a variety of rules to take up the TennCare overhaul legislation in a week, reserved by law, for organization duties.

National experts and local policy experts have predicted the waiver, once approved by the full General Assembly, will quickly end up in court.



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