Opinion » Viewpoint

Haslam's "Gift" to Poor Tennesseans

Refusing federal health-care funds means disaster for the Med.



This Christmas, Tennessee could have given a quarter-million poor Tennesseans the gift of health insurance without spending a dime of state funds. Instead, we've turned down billions in federal dollars, threatening the financial life of rural hospitals across the state and of the Med here in Shelby County.

Steve Mulroy
  • Steve Mulroy

The reason for this Grinchism? Ideological disdain for anything connected to "Obamacare."

Under the Affordable Care Act (ACA), Tennessee stands to gain billions of dollars in federal funds to get an estimated 250,000 poor, uninsured persons the health insurance they need. The feds pay 100 percent of the cost for the first three years and 90 percent after that. So far, 25 states have already signed on.

Last March, Republican Tennessee governor Bill Haslam rejected Medicaid expansion. He explained that he would ask the federal government for permission to try a "third way" of using the federal funds to help the uninsured buy private insurance through the "health care exchanges" set up under the ACA. This free-market, private-sector solution ought to appease conservatives. And the feds have already approved a similar proposal in Arkansas. 

But, nine months later, the governor hasn't made a formal proposal to the feds, and the whole thing is stuck in indefinite limbo. He's being pressured to avoid taking the federal funds by the right wing of his party in Nashville, which opposes Medicaid expansion in any form.

This is unacceptable. We cannot play "political chicken" while the poor get sick and die for lack of insurance.

Expansion will provide the poor and uninsured the chance to get preventive care — such as breast cancer screenings, treatment for chronic diseases like diabetes, and prenatal care, which is so crucial here in Shelby County, with its Third-World-level rates of infant mortality.

A New England Journal of Medicine study of states that have already expanded Medicaid shows that it reduced death rates by more than 6 percent. And this preventive care not only improves health outcomes, it saves money. Preventive care is much cheaper than waiting until you need to go to the emergency room (or simply using the ER as a free medical clinic).  

The economic benefits are just as great. Tennessee stands to get well over $1 billion per year over the next five years. A University of Memphis study estimates that these federal funds would create 20,000 new jobs across the state. That's why the Tennessee Chamber of Commerce and the Memphis, Nashville, and Chattanooga Chambers of Commerce have all endorsed the idea of using these federal funds to expand health insurance coverage. 

Further delay prevents these benefits, obviously. But it's even worse than you think. Because the ACA contemplates that poor people will be covered through Medicaid expansion, it scales back certain federal payments called "DSH funding," which compensate hospitals (like the Med) that treat for free a disproportionate share of poor patients. The Tennessee Hospital Association estimates that these cuts will total $3 billion over the next five years and cost the state well over 10,000 jobs. Added to the benefits we lose by forgoing the ACA's federal dollars and the jobs that go with them, we're talking about a decision which by 2019 will cost Tennessee more than $9 billion and 30,000 jobs. That's a pretty high price to pay for ideological purity.

And those DSH cuts will hit the Med especially hard. Without the ACA funds to make up for them, the Med will be on the ropes (as will similar charity-intensive hospitals in rural counties). Tennessee needs Medicaid expansion next week, but Shelby County needs it tomorrow.

Opponents of expansion say that we can't trust the feds to keep their word, that in future years the federal contribution will drop below 90 percent and Tennessee will be stuck picking up the tab. But if the feds do renege on the deal, we can always drop out. That's the approach taken by Arizona, Ohio, Nevada, Florida, and New Mexico, each of which has stipulated that it will cancel or reduce its participation if the feds don't hold up their end of the bargain. 

Whether or not Tennessee expands coverage, Tennesseans must pay the federal taxes that fund these benefits nationwide. We can either have those dollars come back to us, or we can have them go to other states.  

The county commission will discuss this issue in January. We should urge it to join the coalition of businesses and health-care professionals asking Governor Haslam to act and to act now. The health of our citizens, our hospitals, and our economy depends on it.

Steve Mulroy is a member of the Shelby County Commission.

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