By Paul C. Barton, Gannett Washington Bureau
WASHINGTON -- Responding to governors including Tennessee's Bill Haslam, the Obama administration said Friday it would allow states to experiment with alternative approaches to the Medicaid expansion called for by the 2010 health care reform law.
The administration offered states guidelines under which alternative or "demonstration programs" could be established as a way of "providing flexibility in pursuit of our shared goals," Cindy Mann, deputy administrator of the Centers for Medicare and Medicaid Services, said in a statement.
The health care law is scheduled to take full effect in 2014, and Medicaid is the federal-state health program for the indigent, indigent elderly and disabled. Close to 1.6 million Tennesseans are enrolled.
The administration's move comes on the heels of proposals from governors of several states to use the additional Medicaid funds under the Patient Protection and Affordable Care Act in ways other than a expansion of traditional Medicaid, something seen as politically tricky for those in conservative states.
The federal government is offering the additional money -- up to an extra $400 million in first half of next year alone for Tennessee -- as way of getting states to cover individuals with incomes up to 133 percent of the federal poverty level. Washington will pay for 100 percent of the expansion the first three years.
Up to 180,000 additional Tennesseans could be covered.
Haslam, a Republican, announced earlier this week he was refusing the expansion because he hadn't received federal approval for a program that would allow new Medicaid recipients to use the funds to buy coverage from health insurance companies through the health care exchanges or marketplaces being established in each state.
Because of the state holiday Friday, the governor was not available for comment, his office said.
In its announcement, the Centers for Medicare and Medicaid Services, part of the Department of Health and Human Services, made clear that such "premium assistance" programs are legal under existing Medicaid statutes.
"A state may pursue premium assistance as a state plan option without a waiver," the agency said.
But it added that under premium assistance, recipients would still be considered part of Medicaid and that plans offered by the private-sector would have to meet certain coverage guarantees and protections provided to typical Medicaid recipients, such as extremely low or no copayments in some circumstances.
Further, the private-sector plans must be "cost-effective," meaning their cost to the Medicaid program must be in line with what Medicaid would otherwise pay for such services.
Lastly, the department said the demonstration projects would be re-evaluated after 2016.
Health care advocacy groups in Washington said they can support programs like Haslam's or that of Arkansas Gov. Mike Beebe, a Democrat, so long as certain protections and guarantees available to traditional Medicaid recipients were maintained.
"I think it can be done," said Ron Pollack head of Families USA.
Pollack said the Obama administration recognizes the politics of the situation, especially in the South, where the Affordable Care Act is derisively called "Obamacare."
"That's why the secretary appears to be open to considering this," Pollack said of Kathleen Sebelius, head of Health and Human Services.
Similarly, Judy Solomon, health care analyst at the Center on Budget and Policy Priorities, a liberal think tank, said she too could support premium assistance under the guidelines announced Friday.
"I feel a lot better today than I did yesterday," Solomon said.
Haslam, Tennessee congressional aides said, has been involved in high-level discussions with HHS for several week.
Members of the delegation themselves were tentative in their remarks.
"It's good everyone agrees that expanding health coverage is the right thing to do, but I really can't comment without seeing details of the state's proposal to use federal money to buy private insurance," said Rep. Jim Cooper, D-Nashville.
And Rep. Scott DesJarlais, R-Jasper, said: "Above all, we must ask ourselves how this proposal would fit into the larger goal of fully repealing the president's health care law. Additionally, as with all federal programs, we must view in the context of reigning in out of control deficit spending and reducing our national debt."
Contact Paul C. Barton at firstname.lastname@example.org