Issues in Developing Programs for Uninsured Children: A Resource Book for States. Tenncare



TennCare is a Medicaid 1115 Waiver program that began January 1, 1994. On that date, about 700,000 Tennesseans who had been enrolled in Medicaid were shifted into one of twelve managed care organizations throughout the state. Also on that date, the state began offering TennCare coverage to the estimated 750,000 uninsured Tennesseans, regardless of income or employment status. Tennessee residents were eligible for TennCare under the uninsured category if they did not have insurance on March 1, 1993. TennCare’s scope is broader than virtually any other state’s 1115 waiver demonstration project. A sliding scale is used to determine premiums and patient cost-sharing for enrollees above 100% of poverty. Persons within 100-200% of the FPL have increased co-payments up to 10% of the total cost of treatment. Categorical and asset test restrictions were removed from Medicaid eligibility with the onset of TennCare. On January 1, 1995, the state closed enrollment for the uninsured population, but remained open to those who are uninsurable. However, on April 1, 1997, enrollment into TennCare was opened up to all children under age 18. There is no intention of closing enrollment to children at any time in the future.


Enrollment in TennCare is currently open to persons eligible for Medicaid, the "uninsurable" population, displaced workers, and all children under age 18 who do not have access to insurance. Children under eighteen are eligible for benefits on the day of their enrollment.


Program benefits are very comprehensive, and include inpatient hospital care, hospice care, dental services, home health care, durable medical equipment, medical supplies, ambulance transportation, transportation, rehabilitation, chiropractic services, private duty nursing, speech therapy, sitter services, convalescent care, and organ transplants.


To implement TennCare, the state was divided into twelve Community Service Agencies through which each contracting managed care organization operates and guarantees access to services through provider networks. TennCare determined the terms and conditions of its managed care plan and invited plans to participate. Plans that could prove that they could provide the services were granted contracts with TennCare. Initially twelve MCOs contracted with TennCare. For the first three years, Tennessee allowed the plans to operate as PPOs. By January 1, 1997, they had to be converted to HMOs. Currently there are ten MCOs servicing the TennCare population.


TennCare was financed by pooling federal, state and local expenditures for indigent health care, including $2.2 billion of federal dollars. Pooled resources total $3.455 billion, of which $2.245 billion is used to fund the current year of the TennCare program. The remainder is used to fund long-term care programs, Home and Community Based Services Waiver programs, Medicare crossovers through the Medicaid system, Medicare premiums, and administration for the total program. No new taxes were established to pay for TennCare.