Haslam announces Insure Tennessee Plan

Governor Haslam announced yesterday his Insure Tennessee plan, a two year pilot program to provide health care coverage to Tennesseans who currently do not have access to health insurance or have limited options. This plan will need to be approved by the state legislature under HB937, with a special session expected as soon as January 2015. Insure Tennessee would offer two main options of coverage for individuals below 138 percent of poverty ($16,100 for an individual and $27,300 for a family of three). Tennesseans 21 to 64 years old will be offered a choice of the Health Incentives Plan or the Volunteer Plan.

The Volunteer Plan provides a health insurance voucher to participants that would be used to participate in their employer’s health insurance plan, valued at slightly less than the average TennCare per-enrollee cost. The administration expects half of the newly eligible would qualify as it is estimated that half of this population is employed but simply cannot afford the employer’s group plan.

Participants in the Healthy Incentives Plan may choose to receive coverage through a redesigned component of the TennCare program, which would introduce Health Incentives for Tennesseans (HIT) accounts, modeled after Health Reimbursement Accounts (HRAs), which can be used to pay for a portion of required member cost-sharing. The thinking here is that having participants contribute towards their health care costs through premiums and co-pays will encourage more efficient use of the coverage. HIT accounts attempt to strike a balance between off-setting costs for hospitals associated with indigent care by expanding coverage, on the one hand, and curbing spending on the participant side through cost-sharing measure (premiums and co-pays) on the other. Additionally, the HIT counts will build value in correlation with preventive services received. While the details remain unclear, essentially a participant would increase the value of her HIT for every preventive service, such as a screening, thus off-setting cost to that participant.

The Haslam administration has received approval from HHS for this program. It would be the first of its kind among the states. The unique combination of cost-sharing and incentives for preventive care is certainly a creative solution to a difficult problem. It will be exciting to watch the legislature debate this unique plan in 2015.