On Friday, the federal government officially approved Tennessee's request to transform funding for the state's Medicaid program, TennCare, into a block grant waiver system.
This would allow for more discretionary spending of health care dollars than would be possible through Medicaid.
Despite the approval, the block grant waiver health care funding system is at odds with President-elect Joe Biden's plans to focus on expanding Medicaid and could potentially be reversed under his administration.
Block Grant Waiver
Designed to provide health coverage to low-income Americans, Medicaid currently covers 1.4 million Tennesseans. Funded in part by both federal and state dollars, Tennessee's Medicaid system carries certain limitations as to its spending, however, the federal government can match state spending at around 66 percent with no upper-limit.
Dumping those same federal dollars into a block grant would grant state leadership far more flexibility in its usage, however, federal contribution to the grant would be far more limited under this system.
The Trump administration's approval
Tennessee leadership first made the request to move federal Medicaid funding into a block grant back in November of 2019, and as of Friday, has been the first and only state to see the request's approval.
In a statement, Gov. Bill Lee called the Medicaid financing system "ineffective," and said that the new block grant system will create "unprecedented opportunity" for the state's ability to improve its health care system.
"Today’s agreement represents a continuation of Tennessee’s commitment to innovate, lead and improve,” Lee said.
“We have sought to fundamentally change an outdated and ineffective Medicaid financing system that incentivizes states to spend more taxpayer dollars rather than rewarding states for value, quality and efficiency. Our approved plan will create an unprecedented opportunity for Tennessee to be rewarded for its successful administration of TennCare and further improve the health of TennCare members and Tennessee communities with that reward."
State Rep. Glen Casada has previously championed the block grant funding as a far more effective tool in insuring low-income Tennesseans.
"Medicaid expansion would be a financial burden on working families in Tennessee,” Casada previously told the Home Page. “Asking for a block grant from the federal government is the best decision. We can manage our resources better than Washington D.C. can.”
Despite Casada's and the governor's support of the block grant, several state leaders have condemned the measure, including state Sen. Raumesh Akbari, who represents parts of Memphis.
"The legislature should reject any last ditch effort by the lame duck Trump administration to endanger the health coverage of millions of Tennesseans," Akbari said in a statement.
"Instead lawmakers of both parties should be focused on working with President-elect Joe Biden to extend health coverage to every working Tennessean in the state. We have a workable plan and the need has never been greater."
Before going into effect, the Tennessee General Assembly will have to formally vote on its approval.