The Biden government, however, must oppose the 10-year approval. While new employees may reverse the decision, the state may request a hearing to challenge that determination. Revocation of approvals rarely, if ever, happened.
Funding for Medicaid, which covers more than one in five Americans, is now unlimited, with the federal government paying more than 60% of Medicaid’s total costs and states paying about 40% of the bill.
Conservatives complain that the formula encourages states to spend more so that they can secure more federal funding, while a block grant would lead them to better control costs. Consumer advocates, on the other hand, say that block grants would lead states to reduce their Medicaid programs to stay below spending limits, hurting vulnerable residents.
What Tennessee can do now
Tennessee’s resignation changes federal funding for its TennCare program to a fixed amount, which will increase annually based on Medicaid spending growth rates projected in the president’s budget. If enrollment increases or decreases by more than 1%, the block grant is adjusted accordingly. TennCare currently covers about 1.5 million low-income residents.
If the program is under budget and meets certain quality metrics, the state can share the savings. Among the priorities for the extra funds, officials said, are addressing maternal health, caring for individuals with intellectual and developmental disabilities currently on the waiting list to receive services and dealing with other state-specific public health crises.
“Our approved plan will create an unprecedented opportunity for Tennessee to be rewarded for its successful TennCare management and further improve the health of TennCare members and Tennessee communities with that reward,” said Gov. Bill Lee, a Republican .
The state can only complement, not reduce, the current coverage and benefits of beneficiaries, said CMS administrator Seema Verma.
The exemption also gives the state more flexibility in administering its program, including limiting the number of prescription drugs covered and changing optional benefits – such as prescription drugs and physical therapy – provided without federal approval.
Tennessee is one of a dozen states that have not expanded Medicaid for low-income adults under the Affordable Care Act.
Opponents of the bloc concession, however, say the deal could lead Tennessee to reduce enrollments or benefits to increase its potential savings and remain below the threshold. They point out that approval of the waiver does not prohibit the state from taking such measures.
“It just creates a significant incentive for Tennessee to cut back on its program,” said Hannah Katch, senior policy analyst at the Left Budget and Political Priorities Center.