Ruling May Eliminate Need for New State Spending on TennCare

A nod toward states rights within the U.S. Supreme Court’s health care decision Thursday raises the possibility that Tennessee’s state government may not need multiple millions of dollars stashed away in the state budget to cover potential costs of implementing the federal health care law.
While the court held that most of the Affordable Health Care Act constitutional, it declared that a provision requiring states to expand Medicaid coverage – known as TennCare in Tennessee – is invalid.
The $32 billion state budget for the fiscal year beginning July 1, enacted by the Legislature in May, leaves about $225 million in surplus revenue from the current year unspent. Gov. Bill Haslam and Finance Commissioner Mark Emkes said they wanted the money on standby in case it is needed to cover potentially increased costs for states because of the federal law.
Though cautioning that they still need to fully review the ramifications of the Supreme Court decision, Haslam and Emkes said Thursday that it appears the prospective mandate – which Emkes had estimated to run $200 million per year or more – will not materialize.

“What was unanticipated is the section of the opinion that says states cannot be forced to expand their Medicaid program. This particular portion of the ruling is significant, but it is premature to know the exact ramifications,” the governor said in a statement.
Emkes said in an interview that, while the decision is still being analyzed, “We do feel a little bit better about the fact we’re going to have more control over the Medicaid piece.”
He said there will be a “thoughtful process” of “finding the right balance” between using more state dollars to enhance TennCare coverage for Tennesseans and using the stashed funds for “a lot of other great causes out there.”
“Let’s see what makes sense. Those type decisions aren’t easy,” he said. “It takes time to discuss and think through and finally in the end make a decision in that regard.”
Republican state legislators, meanwhile, said the high court’s decision should spur further consideration next year of a proposed “Health Care Compact,” which envisions the federal government turning over to states all operations of Medicaid, Medicare and other federal health care programs – along with the federal funding that goes with it. The state Senate approved Health Care Compact legislation in the past session, but the bill failed in the House.
“The Court’s remarkably expansive read on the federal government’s authority to tax is alarming. But the Court also recognized States’ rights to resist a further reach into our pockets,” said Senate Majority Leader Mark Norris, R-Collierville. ” Perhaps next year our efforts to enact the Health Care Compact will finally succeed.”
Emkes declined to embrace the Health Care Compact, saying,”I would like to research that a little bit more.”
Otherwise, reaction to the ruling in Tennessee generally fell along partisan lines – Democrats hailing the decision and Republicans lamenting it. Republicans, including Haslam, also declared the decisionn emphasizes the need to defeat President Obama in November.
“By electing Mitt Romney, we can be sure the entire law will be repealed,” Haslam said.
State Democratic party Chairman Chip Forrester said the decision established that the law is “a constitutionally appropriate response to the health care crisis facing Tennessee families.”
“We should all come together and work in a bipartisan fashion, as did the Supreme Court, in order to ensure that all Tennesseans can take advantage of the provisions in the law that provide health and financial security,” said Forrester.
“Today’s Supreme Court decision will increase the determination of Tennessee Republicans to defeat President Obama and put an end to his reckless policies that have failed to address the economy and are only making things worse,” said state Republican Chairman Chris Devaney.

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