Letter to the Hon. Stephen Smith, Deputy Commissioner and Director of TennCare - Congressman Cohen Expresses Concern about TennCare Block Grant to Public Forum

Letter

Dear Director Smith,
I write to express my grave concerns regarding the TennCare Demonstration. Proceeding with
the implementation of a block grant waiver for Tennessee's Medicaid program would be a
devastating blow to Tennesseans who rely on Medicaid to meet their most basic health needs.

As you know, the Medicaid program is designed to be jointly funded by the federal government
and the states. For every dollar Tennessee spends on Medicaid, the federal government matches
it with $2.64. The section 1115 waiver that Tennessee is working to implement would enact an
aggregate cap on federal funding for Tennessee's Medicaid program, which could mean the State
gets less federal money and bears more financial risk in exchange for less oversight and more
flexibility. Additionally, the program allows Tennessee to direct unused federal Medicaid funds
toward other "policy priorities," which creates a perverse incentive for the State to cut health
care for elderly, disabled and low-income Tennesseans as a means to divert the funds to their
preferred projects rather than supporting Tennesseans with their most essential needs.

A shift in Medicaid implementation without oversight and with an incentive to shrink health care
spending could mean a fundamental restructuring of who and what TennCare covers. The state
could decide what prescription drugs are covered and cut benefits without consulting the Centers
for Medicare and Medicaid Services (CMS). It could also change the scope and duration of the
program without federal approval. The entire program could change based on the "policy priorities" of the state's administration rather than prioritizing the 1.4 million Tennesseans who
already rely on this critical program. All of these components defy the fundamental purpose of
Medicaid.

I am also alarmed that this waiver was approved for a ten-year demonstration. This would mean
a decade during which Tennessee could completely restructure its Medicaid program without
federal oversight, despite it being a federally funded program.

The block grant waiver may not be so concerning if the state did not already have an unfortunate
history of wrongfully terminating coverage for TennCare recipients including children, seniors
and adults with serious disabilities.1 There is no evidence the state has an ability to responsibly
allocate the federal funding it already receives. The state administration has repeatedly failed to
be competent stewards or good-faith actors with the federal funding they already receive,
especially considering it withheld over $700 million dollars in TANF funding and failed to
distribute school meal cards as the state's residents faced one of the most dire economic
circumstances in history.

The previous CMS Administrator Seema Verma referred to this approval as an "experiment." To
experiment with people's lives and health care, especially amidst a public health crisis and
economic recession, is unconscionable. To allow a state to direct these programs with no
accountability or oversight is unacceptable.

We know what works to lower health care costs in states. I was proud to vote for the Affordable
Care Act and I have repeatedly encouraged Tennessee to expand Medicaid under the program
ever since. The decision not to expand Medicaid has become even more unreasonable following
the passage of the American Rescue Plan, which further incentivizes Medicaid expansion by
offering non-expansion states more than four times the cost of expanding Medicaid for two
years. Expanding Medicaid lowers costs, expands access to care, and helps keep hospitals open.
There is no quantitate evidence that a block grant would aid those that the Medicaid program was
designed to support.2

Given the concerns outlined, I urge the state to undo this dangerous TennCare Demonstration.
As always, I remain,
Most sincerely,

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