Tennessee's Medicaid Deal Dodges A Partisan Fight

Enlarge this image toggle caption Erik Schelzig/AP Erik Schelzig/AP

Tony Smith's disability check puts him over the income limit to receive standard Medicaid, but it's too little for him to qualify for a subsidy.

Sitting next to a federal health-care navigator at a Nashville, Tenn., clinic, he said he hopes lawmakers think of his plight and that of thousands of others when considering Medicaid expansion.

"I'm not looking for a handout," Smith says. "I'm just looking for some help ... because I need it."

Expanding Medicaid has until recently been seen as a political poison pill in Tennessee. But the hospital lobby has struck a unique deal with Republican Gov. Bill Haslam to pay for the expansion, a move that has paved the way for greater GOP support.

Hospital administrators saw no other choice, says Craig Becker, president of the Tennessee Hospital Association.

"We basically left over $800 million on the table in federal dollars, which is a lot of money that could've done a lot of different things," Becker says, referring to the new Medicaid money Tennessee turned away in 2014.

"Look, we're stressed," he says. "Each individual hospital has gone to [Haslam] and said, 'Look we're gonna have to lay people off.' We've seen layoffs here. We've seen hospitals close, and they're saying, 'We're not just crying wolf here.' "

The association will pay for the state's contribution under the deal — taking state taxpayers off the hook. It's not the first time the hospital group has helped finance the state's Medicaid program.

"I've heard from several of my counterparts, and they have all said the same thing — that they're really hopeful that perhaps their states will follow the lead of Tennessee," Becker says.

Tennessee's Senate leader, Ron Ramsey, who once fiercely opposed Medicaid expansion, now says it's an "opportunity that must be taken seriously."

Haslam heads the Republican Governors Association, and the hospital deal might be up to him to reassure other state leaders that accepting federal Medicaid money doesn't have to trigger a bitter partisan fight.

Other states have sought Affordable Care Act waivers, but Tennessee's approach stands out, says John Graves, who studies health care at Vanderbilt University.

"The state views itself as an innovator," Graves says. "They want to create a program that's amenable to not only the governor, but the legislature ... something with their own Tennessee spin on it."

Whether that spin will be enough to satisfy the state's Republican super-majority won't be known until lawmakers reconvene in January.