TennCare Work Requirements: 4 Things We’ve Learned from Legislative Action

Three bills dealing with TennCare work requirements were introduced for the 2018 session of the 110th Tennessee General Assembly. Each bill instructs TennCare, Tennessee’s Medicaid program, to apply for a waiver from the federal government to impose work requirements.

These pieces of legislation answer some important questions. Below, we break down 4 things we’ve learned from legislative action so far on TennCare work requirements.

(Worth noting: TennCare can also seek this federal waiver without action by the General Assembly.)

4 Things We’ve Learned About TennCare Work Requirements

1. Work requirements would likely apply to an estimated 86,000 TennCare enrollees.

TennCare’s estimate represents about 6% of total enrollment in January 2018. (1) (2) Work requirements would only apply to “able-bodied adults.” While TennCare would have flexibility to further define this term, the estimate excludes populations explicitly exempt in the federal guidance. One of the 3 bills has an implementation date of January 1, 2019. Fiscal Review assumes work requirements associated with the other 2 bills would not be fully implemented until July 1, 2020.

Exempt populations include:

  • Individuals also enrolled in Supplemental Nutrition Assistance Program or Families First who meet or are exempt from either of those programs’ work requirements
  • Caretakers of dependent children under the age of 6
  • Adults over the age of 65
  • Enrollees with a disability
  • Enrollees receiving substance abuse treatment

An estimated 37,000 non-exempt enrollees are not currently working. These individuals are expected to need case management services to help them seek and obtain employment. (1)  The level of case management services that will be provided to non-working enrollees has not yet been determined.

2. Work requirements would cost the state an estimated $18.7 million per year to implement.

Fiscal Review estimates a work requirement’s net cost at $34 million per year starting in FY 2020-2021 — of which Tennessee would pay $18.7 million per year. (1) This estimate includes higher costs from implementation and lower costs from reduced enrollment. Fiscal Review anticipates no additional spending in FY 2018-2019 and one-time costs of $5.7 million in FY 2019-2020 — including $0.7 million in state funds.

  • HIGHER COSTS: TennCare expects to spend about $44.6 million per year to implement work requirements — including $22.3 million per year in state funds. (1) These figures reflect estimated case management costs of about $100 per enrollee per month — an amount based on other states’ projections. Actual costs would depend on the level of monitoring and support services TennCare provides. While 2 states recently got approved for work requirements, no state has begun implementation yet and actual costs remain uncertain. (3) (4)
  • LOWER COSTS: TennCare expects to spend about $10.7 million less per year due to disenrollment related to work requirements — including $3.7 million per year in state funds. before (1) TennCare expects that 2-4% of non-exempt enrollees would leave the program because they either fail to meet the requirement or their incomes rise due to employment. (4) Actual spending reductions would depend on disenrollment numbers. For comparison, Mississippi’s pending request for a work requirement estimates about 4,900 people (or 25% of those not exempt) would leave their Medicaid program. (5) (6) (7) Three other non-expansion states (Kansas, Utah, and Wisconsin) have requested to add work requirements in tandem with other provisions, making it difficult to isolate their anticipated enrollment effects. (8) (9) (10) (11)

Tennessee’s constitution nullifies any new law that requires spending state money unless — during the same legislative session — the General Assembly appropriates the estimated first year’s funding.

3. The online eligibility system TennCare is developing would need modifications.

The Tennessee Eligibility Determination System (TEDS) will collect detailed information on enrollees, but it does not have the reporting capabilities needed for work requirements. Under development since 2012, the system would need new reporting functions that meet federal requirements. TennCare estimates these changes would cost about $5.6 million — including $560,000 in state funds — in FY 2019-2020. TEDS is scheduled to go live on January 1, 2019. (1) It is unclear if the additional reporting requirements would affect that date.

4. Changes to make TennCare look more like commercial health plans have also been proposed.

In addition to work requirements, 1 of the 3 bills includes health savings account options, premiums, and copays. (12) Medicaid programs in 7 states currently include similar cost-sharing elements, which involve trade-offs. (13) While cost-sharing can reduce unnecessary health care utilization, research shows it can also reduce necessary care and increase low-income individuals’ financial burden. (14) (15)

Relevant Documents

Related Work by The Sycamore Institute

Medicaid Work Requirements in Tennessee
(September – December 2017) A 3-part introductory series.

Medicaid Eligibility in Tennessee
(August 30, 2017) A summary of how TennCare eligibility is determined.

Understanding Medicaid and TennCare: Key Concepts and Context to Know
(June 1, 2017) An overview of the program’s goals, history, function, structure, funding, and cost drivers.

Digesting the Feds’ New Guidance & 1st Approval of Medicaid Work Requirements
(January 22, 2018) An overview of CMS guidance and Kentucky’s 1115 waiver

6 Insights for the Debate over TennCare Work Requirements
(February 19, 2018) Key insights from our research and analysis on Medicaid work requirements.

Click for References

References

  1. Tennessee General Assemble Fiscal Review Committee. Fiscal Note HB 1551 – SB 1728. [Online] February 12, 2018. [Cited: February 13, 2018.] http://www.capitol.tn.gov/Bills/110/Fiscal/HB1551.pdf.
  2. TennCare. TennCare Enrollment Report for January 2018. [Online] February 2018. https://www.tn.gov/content/dam/tn/tenncare/documents2/fte_201801.pdf.
  3. Musumeci, MaryBeth, Rudowitz, Robin and Hinton, Elizabeth. Approved Changes in Indiana’s Section 1115 Medicaid Waiver Extension. Kaiser Family Foundation. [Online] February 9, 2018. [Cited: February 14, 2018.] https://www.kff.org/medicaid/issue-brief/approved-changes-in-indianas-section-1115-medicaid-waiver-extension/.
  4. TennCare. Testimony to House Health Subcommittee on H.R. 1551 . [Online] February 14, 2018. Accessible via http://tnga.granicus.com/MediaPlayer.php?view_id=380&clip_id=14395.
  5. State of Mississippi. Medicaid Workforce Training Initiative: 1115 Waiver Demonstration Application. [Online] October 17, 2017. https://medicaid.ms.gov/wp-content/uploads/2017/10/Medicaid-Workforce-Training-Initiative-1115-Demonstration-Waiver-Application.pdf.
  6. Pettus, Emily Wagster. Mississippi Seeks OK for Job Training for Some on Medicaid. U.S. News and World Report. [Online] November 15, 2017. https://www.usnews.com/news/best-states/mississippi/articles/2017-11-15/mississippi-considers-job-training-for-some-on-medicaid.
  7. Alker, Joan. Mississippi Medicaid Work Requirement Waiver Contemplates Significant Coverage Losses for Very Poor Families. Georgetown University Health Policy Institute Center for Children and Families. [Online] February 14, 2018. https://ccf.georgetown.edu/2018/02/14/mississippi-medicaid-work-requirement-waiver-contemplates-significant-coverage-losses-for-very-poor-families/.
  8. The Kaiser Family Foundation. Pending Section 1115 Medicaid Waivers, as of February 8, 2018. [Online] February 8, 2018. http://files.kff.org/attachment/Which-States-Have-Approved-and-Pending-Section-1115-Medicaid-Waivers-Pending.
  9. Kansas Office of the Lieutenant Governor. KanCare 2.0 Section 1115 Demonstration Renewal Application. [Online] December 20, 2017. https://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Waivers/1115/downloads/ks/ks-kancare-pa3.pdf.
  10. Wisconsin Department of Health Services. BadgerCare Reform Demonstration Project. [Online] June 7, 2017. https://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Waivers/1115/downloads/wi/wi-badgercare-reform-pa.pdf.
  11. Utah Department of Health. Utah 1115 Primary Care Network Demonstration Waiver Amendment #20. [Online] August 15, 2017. https://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Waivers/1115/downloads/ut/ut-primary-care-network-pa3.pdf.
  12. State of Tennessee. SB 2456/HB 2542. [Online] 2018. [Cited: February 14, 2018.] http://www.capitol.tn.gov/Bills/110/Bill/SB2456.pdf.
  13. Musumeci, MaryBeth, et al. Section 1115 Medicaid Demonstration Waivers: The Current Landscape of Approved and Pending Waivers. Kaiser Family Foundation. [Online] February 1, 2018. [Cited: February 14, 2018.] https://www.kff.org/medicaid/issue-brief/section-1115-medicaid-demonstration-waivers-the-current-landscape-of-approved-and-pending-waivers/.
  14. Machledt, David and Perkins, Jane. Medicaid Premiums and Cost Sharing. National Health Law Program. [Online] March 26, 2014. [Cited: February 14, 2018.] https://nationaldisabilitynavigator.org/wp-content/uploads/resources-links/NHeLP_IssueBriefMedicaidCostSharing_03262014.pdf.
  15. Powell, Victoria, Saloner, Brendan and Sabik, Lindsay M. Cost Sharing in Medicaid: Assumptions, Evidence, and Future Directions. Medical Care Research and Review. [Online] November 24, 2015. [Cited: February 14, 2018.] http://journals.sagepub.com/doi/full/10.1177/1077558715617381.
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