Thursday, July 23, 2009

Tennessee’s Troubled ‘Public Option’ – TennCare – Could Foreshadow Obama’s Health Care Plan

By Fred Lucas, Staff Writer,Monday, July 20, 2009,

A government-run health insurance plan is enacted on the promise of increasing competition and bringing down costs, but over the years, as more people leave their private insurance to take the “public option,” the cost to operate the government plan skyrockets.

Various litigation ensues, preventing the government’s attempt to reform or cut benefits. Eventually, dramatic cuts become necessary.

This is not a hypothetical scenario sketched by opponents of the health care overhaul plans working their way through Congress. Rather, it is the case of what happened with a state plan in Tennessee. (Read more)


If you are a Tennessean who pays any attention to public affairs you know about TennCare. If you are not, you should learn about it.

TennCare was enacted in 1994. The idea was to create a government health insurance option to compete with private insurance plans. The public option would save so much money that it could serve all of those then on Medicaid and all of the uninsured. Things did not work out that way.

What happened was that consumers shopped for insurance company denial letters so they would be "uninsureable" and could qualify for the cheaper TennCare. Small businesses no longer had an incentive to offer health insurance, they could dump their employees on the public plan. Cost skyrocketed. Enrollment grew to a point that almost a quarter of Tennesseans were on TennCare. To manage TennCare, massive new bureaucracies were created. Thousands of dead people were on the plan, ineligible people, and people from out of state. Litigation kept the state from removing ineligible enrollees or cutting benefits. The cost of the program mushroomed and grew by leaps and bounds and TennCare became the largest item in the state budget. There was no money to spend on anything else, because TennCare gobbled up any additional state revenues.

In 2005, Governor Bredesen overhauled TennCare, set limits on benefits and began reducing the rolls. We currently have something called TennCare but it now more closely resembles the old Medicaid program and is again manageable. If Tennessee could print money like the Federal Government, I suspect we would still have the unoverhauled version of TennCare and it would still be growing.

I do not agree with those who think the status quo is acceptable and we need to do nothing. We do need reform, but not just any reform. We need to take the time to get it right. The nation might could learn something from the Tennessee experiment.

Stumble Upon Toolbar
My Zimbio
Top Stories


  1. This article is very well written. Thanks for the contribution to the new web. :-)

    BDSM |

  2. I guess my question would be, if we can learn from Tennessee, why can't we learn from Canada, Western Europe, the Scandinavian countries, who's costs are half or less, sometimes much less, and whose results are better? Show me just one of the for profit insurance companies in this country, just one, that even comes close to the results of the worst of the above mentioned countries in terms of cost and results. I thought you Republicans were thrifty? Do you think that any of the citizens of above mentioned countries would vote to exchange health care systems with us?

  3. When you claim TennCare was akin to a "public option", you are lying. Nothing could be further from the truth. TennCare was a Medicaid privatization plan. That's the opposite of a public option.