Rather Than Expand Medicaid, Tennessee Lawmakers Look To Insure More People Through A State-Based Exchange


Posted by Americans for Tax Reform on Tuesday, March 30th, 2021, 9:12 AM PERMALINK

The American Rescue Plan Act (ARPA), the $1.9 trillion spending bill recently enacted by President Joe Biden, with its provision blocking states from cutting taxes, is likely to be ruled by a judge to be an unconstitutional violation of state sovereignty. A number of state Attorneys General are now suing to overturn this unjust encroachment on states’ power to set their own fiscal policy.

At a time when politicians in Washington are pursuing a historic violation of state sovereignty, lawmakers in Tennessee and other states are looking to reassert state sovereignty when it comes to setting health care and other key policies within their borders. That is the goal of Tennessee House Bill 875, legislation introduced by Representative Bryan Terry (R) that would move Tennessee off of the federally-run health care exchange and set up a state-based exchange. Currently 14 states and the District of Columbia run their own health care exchanges.

The ARPA increases the financial incentive for states to expand Medicaid in accordance with Obamacare. This will escalate the near decade-long debate over whether impose Obamacare’s Medicaid expansion in Tennessee and the 11 other states that have yet to go along with the expansion. In this context, Rep. Terry’s bill is seen by some as alternative to expanding Medicaid, instead increasing coverage through private insurers via a state-based exchange.

Proponents of HB 875, which will get a subcommittee hearing this week, tout the greater flexibility that comes from having a state-based exchange versus relying on the federally operated exchange. State-based exchanges provide greater flexibility when it comes to setting open and special enrollment periods. State-based exchanges also provide for more funding and greater regulatory flexibility, permitting premium-cutting reinsurance pools and lighter requirements for small businesses.

Imposition of Obamacare’s Medicaid expansion would have disastrous consequences for Tennessee taxpayers, increasing the cost of state government by billions of dollars annually. The states that have implemented Obamacare’s Medicaid expansion have seen massive cost overruns, which taxpayers are on the hook for. In addition to putting more able-bodied adults in a taxpayer-supported entitlement program that was already crowding out other state spending priorities, Obamacare’s Medicaid expansion has also stoked a wave of fraud.

“Millions of people enrolled as a result of Medicaid expansion were almost certainly ineligible for the program—either because their incomes were too high or because they were not lawful residents,” writes Brian Blase, a senior fellow at the Galen Institute and former Trump administration health care advisor. “The Inspector General at HHS estimated that one- quarter of newly-eligible enrollees in California and New York did not meet eligibility requirements.”

It would behoove Tennessee lawmakers to reject calls to expand Medicaid in accordance with Obamacare. In contrast, seizing greater control of health care policy from the federal government through passage of HB 875 is a reform that deserves lawmakers’ consideration.

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