TN health insurance plans stop enrolling needy

Shortfall could leave low-income adults, kids without coverage By Christina E. Sanchez and Janell Ross • THE TENNESSEAN • December 2, 2009 RX FOR CHANGE: Part of an occasional series As state funds run dry, Tennessee has cut off enrollment for two health insurance programs for low-income people, leaving the state at risk of a crisis, advocates say. Tennessee became the only state in the nation to have frozen enrollment for a children's health insurance program funded largely with federal money, according to the liberal Center on Budget and Policy Priorities in Washington, D.C. The state stopped accepting new CoverKids applicants on Monday. At the same time, the state stopped enrolling adults in CoverTN, an insurance program designed for the self-employed and working poor. "This is a perfect storm for Tennessee families," said Michele Johnson of the Tennessee Justice Center, an advocacy group for low- and middle-income families. The changes come at a time when the state's unemployment rate is above 10 percent, and a federal subsidy to help laid-off workers pay for health insurance is expiring. "In the midst of an economic crisis putting so many middle-class families on the brink, our state's policy decisions push them over," Johnson said. "The citizens of this state will be paying for these cuts in fiscal and human terms for decades." No extra money With a projected $1.5 billion shortfall in the state's $29 billion budget and every department facing cuts, there is no extra money to go around. To stay within their budgets, CoverKids and CoverTN had to stop signing up new people, said Joe Burchfield, spokesman for the programs. No one currently enrolled will lose coverage, but new people can't enroll until more funding is found or until spaces open up from attrition, Burchfield said. "From the beginning, we knew there would come a time when enrollment would reach the maximum allowed by the budget and, if no additional funds were available, we would suspend enrollment accordingly," Burchfield said. "Given the state's current financial situation, these programs are performing exactly as intended." State lawmakers will look at what can be done for CoverTN and CoverKids when the session reconvenes in January. State Sen. Jim Kyle, a Memphis Democrat and the Senate minority leader, said he would wait for Gov. Phil Bredesen's proposals before deciding what should be reopened. Kyle said he is sympathetic and aware of the growing need for social safety net programs. "But it takes more than just being sympathetic — it takes the ability to draw some priorities and come to some consensus around those priorities," Kyle said. 'Scary place for babies' In the meantime, Sandra Neely of Spring Hill wonders what will happen to her granddaughter, Kamie, who is currently covered by the state Medicaid program, TennCare. Kamie's mother works part time and does not get benefits. Her father had a full-time job that did not offer insurance. When both parents worked, Kamie was insured by CoverKids, but when her father was laid off, she was moved to TennCare because of the family's lowered income. TennCare generally serves the poorest and sickest kids. The 3-year-old's health insurance proved helpful when she hit a tooth on a swing set, and the tooth was saved. But families must prove eligibility for the program every year. Neely isn't sure what the family will do without CoverKids if the family's income goes up again past TennCare limits. "This is a scary place for babies if CoverKids is gone," Neely said. "Without CoverKids, there will be no insurance out there for children who are on the borderline of poverty, for the people in the middle who work but don't have or can't afford insurance." Timing questioned The adult plan, CoverTN, closed Monday with about 22,000 enrollees, though applications were still being processed. The program provides limited benefits to working adults, with the state, employee and employer sharing the cost in equal parts. CoverKids enrollment closed Monday with about 44,000 children enrolled. It is open to children through age 18 whose families earn too much money to be on TennCare but not enough to afford private insurance — generally between 200 percent and 250 percent of the federal poverty level. The program is funded largely through the federal Children's Health Insurance Program, or CHIP. Other states have frozen enrollment in their CHIP programs in the past. Most recently, California stopped accepting new applicants in June but reopened enrollment in September after more funding was found. Some states, including Wyoming, say they will stop accepting applications once they reach a certain number of covered children, but that has not happened yet, said Donna Cohen, director of outreach for the Center on Budget and Policy Priorities in Washington. Susan McKay, spokeswoman for the Tennessee Health Care Campaign, a nonprofit consumer advocacy group, wonders why Tennessee would close its programs to new enrollees at a moment when unemployment has reached historic proportions and more people than ever lack health insurance. In October, the U.S. Census Bureau released data showing that nearly 110,000 Tennessee residents had lost their health-care coverage in the past year, due largely to increased unemployment. Some residents who were laid off were able to take advantage of a temporary COBRA aid program, in which the federal government paid 65 percent of the premiums to continue health benefits formerly provided by the employer. However, the COBRA subsidies began to expire Tuesday. Federal money available More federal dollars are available for CoverKids, but Tennessee would have to pony up more state money for the program. For each state dollar, the federal government will chip in $3. "Since this is a program and a problem to which federal dollars have been assigned, we should be trying to draw down those funds, not turn them away," McKay said. Advocates say the state should dip into reserve or rainy-day funds, which sit at about $7.9 million for CoverKids and $19 million for CoverTN. Meanwhile, TennCare has a reserve of about $350 million. State officials said that money is not for situations that would require recurring funds. "These reserve funds are not viable for keeping enrollments open, as they are nonrecurring dollars and would not sustain increased enrollment in either program above current budget levels," Burchfield said. McKay countered: "If this isn't a rainy day, what is? And why do we continue to boost the rainy-day (fund) if we don't use it?"