CMS Administrator Seema Verma speaks in Arkansas during a ceremony making that state the third in the country to implement Medicaid work requirements under a Trump Administration waiver. Credit: courtesy Office of Gov. Asa Hutchinson

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The Tennessee legislature has designed a budget maneuver to pay for proposed rules around Medicaid. Republican states, including Tennessee, are adding requirements that Medicaid recipients have to work if they can. But enforcement is proving to be costly.



It’s been hard for Tennessee’s Medicaid officials to estimate the expense of making sure 1.4 million TennCare members are working, caring for family or in school. Their best guess is $38 million to start. They won’t even take a stab at the cost in future years.

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Read detailed cost projections for the TennCare work requirement



Projecting how many will lose coverage as a result has also been tough, but they’ve landed on 3,700. And critics have done the math for lawmakers.

“We’re going to pay $10,000 per person we’re dis-enrolling,” Michele Johnson of the Tennessee Justice Center told the Senate Health Committee. “We can’t afford that in our state.”

Johnson contends the program could easily cost more than it saves.

As the legislation nears final passage this week, debate has centered less on the merits of the idea and more on where the money will come from. Given the hefty price tag, the sponsors looked outside the general budget and found massive reserves in the state’s account for welfare payments.

The federal government gives Tennessee $191 million a year for temporary assistance to needy families, known as TANF. With a booming economy and historically low unemployment, only 61 percent of the funding is being used each year. The rest has been piling up, with reserves in excess of $400 million.

TennCare director Wendy Long said it’s up to the federal government to approve this use of the money.

“We don’t know of another state that’s done this yet,” she said. “But we do think that many of the things that we would be wanting to do for these individuals to help them gain employment, appear to be things that TANF funds can be used for.”

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Tennessee’s Next Governor — Should TennCare Beneficiaries Be Required to Work



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legislation only prompts TennCare to begin negotiations with the Centers for Medicare and Medicaid Services. If federal authorities deny the use of TANF money, TennCare would not move forward with the work requirements and likely come back to the legislature to either ask for state funding or suggest lawmakers reconsider the program. TennCare officials had no plans to introduce work requirements before House Speaker

Beth Harwell started pushing for it.

Sen. Kerry Roberts, R-Springfield, is sponsoring the legislation with Harwell and points out that TANF funds can be used for “promoting job preparation,” according to federal guidelines.

“Sometimes there are people that need just a little bit of nudge to get back on their feet, and this might be what’s needed for some people,” Roberts said.

But the state might also need the money during a downturn. Sen. Bo Watson, R-Hixon, is one of the few lawmakers to express concerns about diverting welfare funding, suggesting the state might regret it during the next recession.

“I just don’t want us to get into a position where we’ve got a program that we’re funding with dollars that weren’t intended for that purpose, and then we need those dollars for the purpose for which they are intended and we have to supplement one or the other by putting the state’s finances at risk,” he said.

Still Watson voted with Republicans to advance the measure in the Senate last week, and the full House approved it Monday, resulting in praise from the conservative lobbying group Americans for Prosperity. “Asking people who are able-bodied to earn for themselves is not a hardship, but a hand up,” the group said.

A final vote from the full Senate is scheduled for Thursday, and Governor Bill Haslam has indicated

he supports the idea.