Covering the Uninsured through TennCare: Does It Make a Difference
Covering the Uninsured through TennCare: Does It Make a Difference?
By: Lorenzo Moreno and
Sheila D. Hoag
Date: January—February 2001
Source: Moreno, Lorenzo and Sheila D. Hoag. "Covering the Uninsured through TennCare: Does It Make a Difference?" Health Affairs 29, no. 1 (January—February 2001): 231–239.
About the Author: Lorenzo Moreno is a senior researcher and Sheila Hoag is a researcher at Mathematica Policy Research in Princeton, New Jersey.
In every state's health care system, there are several categories of people who receive services. A significant percentage of the population is privately, or commercially, insured by third-party payers—these people participate in a variety of different plans, most of which reflect at least some significant aspects of managed care. In these cases, medical and behavioral health-care coverage is paid, at least in part, by the employer, and the insured employees generally work full time. Such individuals, and their families, are usually considered to be adequately insured, though they may choose to obtain supplemental medical care policies. People who are adequately insured typically have a personal health care practitioner, whom they see for routine medical care. They go to specialists as necessary, and only use emergency and urgent care services when the situation warrants such usage.
At the other end of the socioeconomic spectrum are those who are not typically able to be employed and who depend upon public assistance to help them meet their financial and personal-care needs. They may be significantly or fully disabled (either physically, cognitively, or due to behavioral health disorders), in which case they probably receive state and federal government benefits supplementing or providing their income, and they benefit from governmentally sponsored health-care plans. They probably see a specific primary care provider and have a medical and behavioral health care plan in which they receive a menu of services. In addition, they are likely to have the ability to exercise some degree of choice in the planning and execution of their health-care programming.
Within the category of the unemployed or unemployable, there are those who receive temporary governmental financial assistance, such as Temporary Assistance to Needy Families (TANF) or other programs falling under the general heading of what has historically been called welfare. If they are children or youth, welfare recipients may be in state custody and reside in foster care or some type of residential or group care setting. If they are adults, they may be currently unemployed and residing in some type of institutional setting, such as a rehabilitation or treatment center or a correctional facility. If they are elders, they may be living in skilled nursing facilities or in assisted-living settings. They may also reside in their own private dwellings, retired and no longer receiving the more traditional types of services, such as commercial health-care plans. A significant group will simply be unemployed and temporarily unable to provide for the financial and health-care needs of their families. For that significant segment of the population, there are governmentally sponsored financial assistance programs, including various types of physical and behavioral health-care programs.
Finally, there is the subpopulation typically referred to as "the working poor." They are employed, but they do not work enough hours or earn enough money to be able to obtain commercially available health-care coverage. Because they are employed, they are unlikely to receive financial assistance from the state or federal government, or perhaps they would obtain minor benefits, such as food stamps. They are not eligible for assistance or state or federal sponsorship of their medical care, but they cannot afford coverage on their own, so they are generally uninsured. Some may be able to afford a minimal plan that provides for catastrophic care, for example, but leaves them significantly underinsured. For that segment of the population, the options have traditionally been few. In the past, they would have had to rely on emergent-care settings to get basic needs met, or they might have gone to free or sliding-scale clinics. Now, many states have created plans to provide low-cost or supplemental health-care coverage for the marginally employed or the working poor. Prior to that development, states generally had to absorb the costs for the health care of the uninsured, creating considerable financial chaos.
Tennessee created TennCare in 1994 to address the needs of the "hundreds of thousands of poor and uninsured citizens…excluded from the health care system."
Under TennCare, Tennessee implemented managed care in its Medicaid program and used savings anticipated from the switch to managed care to expand insurance coverage to uninsured and uninsurable residents. Many policymakers and the press have criticized TennCare over the years, but it has provided coverage to thousands of persons who otherwise would lack insurance.
We examine whether TennCare's expansion program makes a difference in beneficiaries' access to and satisfaction with care compared with that of their uninsured or uninsurable peers. This is critical to study now, since Tennessee, faced with financial difficulties, is considering revamping TennCare. Alternatives range from closing enrollment to new uninsured and uninsurable persons to carving out the expansion program as a state-funded high-risk insurance pool.
Initially, the TennCare expansion offered health insurance coverage through fully capitated managed care organizations to uninsured and uninsurable Tennesseans, known as the "expansion group." This expansion offered subsidized coverage to all uninsured and uninsurable Tennesseans with annual family incomes below 400 percent of the federal poverty level, while those above 400 percent of poverty could receive unsubsidized coverage. This expansion is considerably more ambitious than those of other states (such as California, Delaware, Hawaii, Massachusetts, Minnesota, Oregon, Vermont, and Washington), which targeted persons with incomes at 100–200 percent of poverty. Enrollment in the expansion group has fluctuated over the years; Tennessee closed enrollment in late 1994 to uninsured persons, mostly adults, because of budget problems. Expansion-group enrollment increased steadily since 1997, peaking at 517,607 persons in October 1999.…
Effects of Expanding Coverage
Barriers to care.
For the majority of measures of barriers to care we examined, expansion group-members scored significantly better than uninsured persons did (Exhibit 2). For instance, more than 92 percent of expansion-group members had a usual place of care, compared with fewer than 74 percent of uninsured persons. Also, more expansion-group adults and children always visited the same provider at their usual place of care than did their uninsured counterparts, signaling better continuity of care. Compared with uninsured persons, expansion-group members were about 30 percent more likely to have paid nothing out of pocket for care and about half as likely to have spent more than $100 in the past year.
Unmet need and delays in receiving care.
These measures are important indicators of the match between people's expectations and the care they actually receive. Expansion-group adults reported significantly lower unmet need and service delays on all six measures we examined (not shown). For example, uninsured adults were nearly twice as likely as expansion-group adults were to not see a doctor when they needed one (63.8 versus 33.6 percent), to delay seeing a doctor when needed (53.2 percent versus 32.4 percent), and to take a needed prescription drug less often than recommended (21.9 percent versus 11.3 percent). Uninsured children scored similarly. Uninsured persons reported that the main reason for their unmet need was unaffordability, while transportation and scheduling topped the list for expansion-group members.
Use of services.
TennCare appears to have increased access to care, as measured by intensity of service use, the traditional indicator of access to care. On four of the five measures we examined, expansion-group adults used more services than uninsured adults used, while expansion-group children used more services than their uninsured counterparts did on all five measures examined.
An alternative interpretation of these estimates— that the uninsured are simply healthier and less in need of care—is not consistent with other evidence from our survey. When the need for various services (including hospitalization) was measured by either receipt of the service or reported unmet need for it, the expansion and comparison groups appeared to have quite similar care needs. This finding, together with the uninsured persons' primary reason for not getting needed services (unafford-ability), provides strong confirmation that the greater service use among TennCare enrollees is the result of their greater access to care.
Use of preventive services.
Nearly three-quarters of expansion-group women who should have received a Pap smear in the past year reported that they received one, compared with half of those in the uninsured group. Similarly, nearly three-quarters of children in TennCare's expansion program received well-child visits on schedule, compared with 55 percent of uninsured children.
Satisfaction with care.
Adults and parents or guardians of children in TennCare's expansion group were more satisfied than their uninsured counterparts were with their access to care and the care they received, but our findings are statistically significant for only five of the twelve aspects of care we measured for each group (Exhibit 3). Expansion-group and uninsured persons were about equally likely to rate as very good or excellent the number of doctors they had to choose from, the time spent waiting for and with the doctor, and the courtesy of their doctors. Since the percentage of expansion-group adults who rated specific aspects of care as very good or excellent rarely exceeded 50 percent, our findings suggest that either the managed care organizations or the providers have room to improve various aspects of care under TennCare.
Discussion and Lessons Learned
Tennessee implemented TennCare with the ambitious goals of controlling costs while increasing access to care, improving quality of care, and encouraging use of preventive care for Medicaid-eligible and uninsured/uninsurable Tennesseans. Our findings suggest that TennCare accomplished those goals. This conclusion is corroborated by two recent studies.
Implications for children.
Tennessee's success in expanding coverage to uninsured and uninsurable children is particularly relevant right now, as coverage for children is expanding nationwide through the implementation of the State Children's Health Insurance Program (SCHIP). As a precursor to SCHIP, TennCare demonstrates the feasibility of implementing a coverage expansion for children that is popular and improves access to care. TennCare, as the largest family-based expansion of health insurance coverage for low-income persons in recent history, corroborates the findings from dozens of studies that have addressed whether providing insurance coverage to the uninsured makes a difference. Although our findings are specific to Tennessee, they demonstrate that a Medicaid expansion model, the model that twenty-six states plus the District of Columbia have adopted for their SCHIP programs, can greatly improve children's access to care.
Implications for adults.
Our findings also have important policy implications for adults. Since the requirements for gaining or maintaining Medicaid eligibility are so stringent, the consequences of losing health insurance coverage can be devastating for this population. Although Tennessee's expansion of coverage initially included uninsured and uninsurable adults, subsequent enrollment closures made it nearly impossible for uninsured adults to enroll in TennCare unless they qualified as uninsurable. Moreover, because TennCare entered the year 2000 with financial problems, Tennessee is proposing that uninsured and uninsurable adults bear the brunt of the intended reduction in TennCare coverage.
Our findings indicate that although drastic changes such as dropping the adult expansion entirely or severely cutting it back might help TennCare to regain financial health and stability in the short term, the long-term implications for the health of uninsured and uninsurable adults are likely to be considerable. Less drastic alternatives, such as revising the incentives to participating managed care plans to really manage care or revising the cost-sharing policies for uninsured and uninsurable adults, might ensure that TennCare's coverage expansion could be maintained.
There are several state and federally funded health-care programs for those who live in poverty and are unemployed, or for those who are temporarily unable to work. The most common among these are Medicaid, for children, youth, adults, and families in temporary need of assistance; and Medicare, for elders and those who are significantly disabled. Those who served in the Armed Forces as a career, or were disabled through the course of their military service, receive or are eligible for veteran-related health care. Members of these subpopulations typically have some form of managed-care coverage, see a regular provider, and generally use urgent or emergent care services on an as-needed basis. This type of coverage for such citizens only became the norm at the end of the twentieth century, when government-sponsored medical-care programs were reorganized into a managed-care model. Prior to that time, physical and behavioral care for those who were not privately insured was quite fragmented. Typically, people in that group did not have primary-care coverage and relied upon the emergency room or urgent-care settings in order to get virtually all of their physical and behavioral health-care needs met. Such practices placed a huge drain on both the medical and financial systems, as such settings are typically far more expensive than standard medical office settings and clinics. It also resulted in overcrowded emergency settings, particularly on nights and weekends, placing the care of those in truly emergent situations in jeopardy.
The working poor, who do not have commercial health care, but who earn too much to be able to avail themselves of government-sponsored programs, have the fewest options of all. In the past, they often went without health-care coverage and relied on emergency medical systems in times of crisis. Many attempted to locate free or low-cost clinics, resigning themselves to very long waits and the inability to develop a relationship with a regular provider who would be familiar with their health-care histories and needs. Alternatively, some used various state-sponsored free programs such as public health-sponsored immunization and well-care clinics. Sometimes, the working poor were able to find settings in which they could tap into county indigent funds, or they could benefit from special programs created for specific disease or disorder categories, such as publicly paid and grant-funded programs for children needing speech or physical therapy for certain types of disorders, like cerebral palsy or premature birth. Such health care was typically spotty and difficult to locate, often had long wait lists, and was almost always inadequate to meet the broad range of health-care needs for the individual and family.
With the advent of Medicare and Medicaid reform and the broadened use of the managed-care paradigm for those whose health care is paid by the government has come another new form of health-care coverage, designed to ease the burden for the underinsured, uninsured, and uninsurable segments of the population. The State Children's Health Insurance Program, or SCHIP (usually called S-Chip), was created in 1997 as an outgrowth of Title XXI of the Social Security Act. SCHIP is designed as a long-term roll-out program designed to meet the needs of lower-income working families. It is geared for those who earn too much money to be eligible to receive Medicaid coverage, but who do not earn enough to be able to afford commercial coverage. There is considerable flexibility in the ways in which the various states can choose to structure their SCHIP programs—some use them only for children, some for children and families, and some have even opened SCHIP up to working adults without children who meet certain (state-determined) poverty standards. Because there is not yet a general level of awareness about these programs, states create means of public education and consciousness-raising in order to bring them to public attention. One way of doing this is by providing educational materials to employers who commonly use large numbers of itinerant, seasonal, or part-time help, so that they can hand out pamphlets and brochures to such workers. Another is through health fairs or by handing out information in public settings such as grocery stores and shopping malls, or by erecting informational kiosks at such places.
Many states are creating new health-care options for the uninsured, underinsured, and uninsurable through waiver programs that combine the flexibility of Medicaid and SCHIP funds, under legislation allowing the development of Health Insurance Flexibility and Accountability Demonstration Initiatives (commonly called HIFAs) that target health services to the poorer segments of the general population. HIFAs allow the states to exercise considerable creativity in sculpting health-care coverage to meet the needs of their individual demographics, designing programs for serving their poorer citizens. One of the most beneficial aspects of the HIFA programs, from the perspectives of state government, is that they provide a degree of federal funding to supplement the costs of health care for this population, reducing the budget strain on the states and, ultimately, making the coverage and care more affordable for those who need it most—the working poor. In many areas, the government funds are being supplemented by grant funds from philanthropic organizations such as the Robert Wood Johnson Foundation (among many others), providing for greater expansion of programming and the development of community-level health care resources and providers.
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