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Gov. Haslam's 'third way' on ObamaCare is just what the doctor ordered — for the nervous GOP

Deal and No Deal


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Now that Gov. Bill Haslam finally has rejected billions of dollars in federal money to expand Tennessee's Medicaid program, relieved Republicans are turning the page and preparing to end this year's session in a few weeks. 

The governor might cling to the seemingly naïve hope of reaching an improbable grand bargain with the Obama administration and opening the floodgates to the cash — "whether that's a week from now or three months from now or a year from now," as he put it. But legislative leaders show no enthusiasm for any deal. They are delighted they didn't have to make what many saw as a choice between backing a governor of their own party and betrayal of their Republican principles, and they'd rather not confront that dilemma at any point in their future. 

"I absolutely think the Republican caucus supports the governor's decision" not to expand Medicaid, House Speaker Beth Harwell says. "Getting into a program with the federal government is tricky business. We've all seen how things can go wrong. They simply don't have the answers in Washington, D.C."

Where does that leave the state's hospitals? The Affordable Care Act phases out billions of dollars in Medicaid payments for caring for the uninsured. If most people are covered, Congress reasoned in passing the law, hospitals won't need that money anymore. Except in Tennessee, because of Haslam's decision, they won't be covered. Without the money, some hospitals could close, particularly in rural areas where they already are struggling financially.

Harwell and her Senate counterpart, Ron Ramsey, agree that's a shame. The free market's a bitch sometimes.

"There may be hospitals that will have to close," Ramsey says. "But look, if you want to operate in a free market, things like that happen." 

"There are some rural hospitals that will be hurt," Harwell agrees. "There's no doubt about that. You know, the health care industry is a changing industry and those that can't keep up, they just simply can't." 

State Rep. Glen Casada, the House's No. 3 Republican, voices the opinion of many in the GOP when he says he's against expanding Medicaid under any foreseeable circumstances. Casada complains even about the lopsided cost-sharing in the law — the feds cover the entire bill for the first three years and never any less than 90 percent. 

"It's not like it's all paid for," he says. "We've got to come up with the 10 percent." 

Given the political realities, it's not clear the governor really wants to make a deal anyway. The talks collapsed — supposedly at the 11th hour — with the governor making demands that Democrats call a political ploy to dodge responsibility. Haslam asks for the moon, they argue, then throws up his arms, blames that evil Obama administration and claims he's the only reasonable one at the bargaining table.

The governor says he wants to do what Arkansas is talking about doing: Use Medicaid money to send people to the Affordable Care Act's health insurance exchanges to shop for private plans, along with Americans who qualify for subsidies under the law. 

But that's not all Haslam wants. To curtail state costs in the cash-strapped entitlement program, he wants to force these new beneficiaries to accept whatever plans are available on the exchange — even if they offer less comprehensive benefits and charge higher co-pays than Medicaid.

"We'd like it to be very much like the commercial product that's on the exchange to the greatest extent possible. We think that makes sense," TennCare director Darin Gordon said.

That's against strict Medicaid rules, which require that beneficiaries receive the same cost-sharing and benefit packages in private plans as they would in the public program. Haslam should have known Washington wouldn't go for what he was proposing.

To health care advocates, the governor is simpleminded or cynical, and it hardly matters which. They see no hope for Haslam working out an arrangement on his take-it-or-leave-it terms. One health care insider who asks not to be named for fear of pissing off Haslam gave this account of the so-called negotiations with the Department of Health and Human Services:

"HHS said, 'We're always willing to talk. We want to be as flexible as we can and work with the states, but these items that you have put out here, some of them we can talk about, and some of them are absolute non-starters.' At which point, the state folks broke it off and said, 'It's all or nothing.' That's not a serious negotiation."

In becoming the 18th Republican governor to say no to expansion, Haslam insisted that he wasn't doing it to avoid fighting with Republicans in the legislature.

"If we were driven by the politics of it, we would have just said no three months ago," Haslam said. "I really do think this is a better path. This isn't just, 'Oh, I'm going to come up with a third way and that'll get us out of the box for now.' "



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