TennCare’s Federal Funding under the AHCA

Last week, we took a detailed look at how the U.S. House bill known as the American Health Care Act (AHCA) might impact federal funding for TennCare, Tennessee’s Medicaid program. You can read that analysis here.

Impact of the AHCA on TennCare’s Budget

The Congressional Budget Office (CBO) has now weighed in with additional details and analysis. Based on the CBO report and TennCare’s own projections of per-enrollee spending growth, we now estimate that federal contributions to TennCare under the AHCA could range from +$460 million higher to -$2.6 billion lower than current law over the next 10 years. These estimates include both the safety net funding for states that did not expand Medicaid and the effect of the per capita-based spending targets.

Potential Impact of AHCA Medicaid Reforms on Federal TennCare Funding

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Limitations of this Analysis

As with the analysis we published last week, there are a few caveats and limitations to the projections above, which rely on total TennCare expenditures per person. TennCare spending and enrollment data at the level on which the AHCA is based (i.e. medical assistance costs by distinct enrollee categories) were not available. For a more detailed discussion of the limitations involved see “Limitations of Our Bottom-Up Analysis” here (page 3 of the pdf version).

Tough Choices for TennCare Reform

As we’ve said before, the details matter with Medicaid reform. If changes enacted by Congress affect federal funding for TennCare, Tennessee’s governor and General Assembly could be forced to make tough choices related to the program’s eligibility, benefits, enrollee responsibilities, and provider payments. Read Medicaid Reform 101: Key TennCare Reform Design Elements to learn more about what those choices might be.

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