December 11, 2003

Achieving a Critical Mission in Difficult Times TennCares Financial Viability

Launched in 1994, TennCare represents an historic effort to implement managed care for Tennessee's entire Medicaid population and expand insurance coverage to the states uninsured and uninsurable residents. The programs budget is growing rapidly, from $6.1 billion in fiscal year 2002 to $6.9 billion in fiscal year 2003, with the state paying $2.1 billion of the latter amount. While this increase is not unique to Tennessee (Medicaid expenditures are rising everywhere), the program's growing costs represent a very serious situation for TennCare and those who depend upon its services. The state has taken several steps to address TennCares costs, but many stakeholders are still very concerned about the programs financial viability. Given that concern, Governor Philip N. Bredesen asked BlueCross BlueShield of Tennessee, Hospital Corporation of America, the Farm Bureau, 22 hospitals within the Tennessee Hospital Association, and Vanderbilt University to fund an independent study to determine the extent of the problem and potential ways to address it.