A report released by the Urban Institute in October estimates that 2.3 million people would gain health coverage in 2024 if 10 states were to expand Medicaid eligibility. Tennessee is among those 10 states.
This report estimates that if Tennessee were to expand Medicaid, it could result in a 22.6 percent increase in insurance enrollment, which means more than 300,000 people could potentially gain access to affordable health insurance.
Currently, the following populations are eligible for Tennessee’s Medicaid Program, which is called TennCare, according to the state’s website:
- Children under the age of 21;
- Women who are pregnant;
- Parents or caretakers of a minor child — the child must live in the same household and be a close relative;
- Individuals who need treatment for breast or cervical cancer;
- People who get a Supplemental Security Income (SSI) check;
- People who have gotten both an SSI check and a Social Security check in the same month at least once since April 1977 and who still get a Social Security check;
- A person who lives in a medical institution (like a nursing home) and has an income below $2,742 per month OR gets other long-term care services that TennCare pays for.
According to an Urban Institute report, Tennessee has the highest parent eligibility thresholds. Specifically, Tennessee parents are likely eligible for Medicaid/TennCare when they meet 82 percent of the federal poverty level. Most other non-expanded states hover around 50 percent or less. This is important because people with incomes below 100 percent of the federal poverty level are ineligible for marketplace premium tax credits under the Affordable Care Act. This means there is a coverage gap in Tennessee for poor people who are just not poor enough to be eligible for TennCare.
Medicaid expansion became available on Jan. 1, 2014, under the Affordable Care Act, which allowed states the option to expand Medicaid to non-elderly individuals with incomes up to 138 percent of the federal poverty level. That income would just be over $20,000 for an individual, in 2023 dollars.
As you can imagine, Medicaid is a complex issue and I am not knowledgeable enough to go in-depth about it. But I think it’s worth talking about Medicaid expansion (or the lack thereof) because it is an issue that is brought up whenever homelessness providers in Nashville talk about the need for increased support services, especially if we want to implement permanent supportive housing programs. The main problem we seem to have is that any available dollars for support services are temporary.
Funders, regardless of whether they represent the government or private sectors, generally do not wish to invest in one program that serves the same people with very low turnover in perpetuity. That’s why any added service cost would go a long way to help supplement support services costs.
At this point, you may have two main questions. The first may be: how does Medicaid expansion affect state budgets? And secondly, how can states use Medicaid to address homelessness?
According to a 2021 report published by the Center on Budget and Policy Priorities, the fact that the federal government pays a vast majority of the cost of expansion coverage has resulted in net savings for many states that expanded Medicaid. In general, uncompensated hospital care costs fall. Some states help cover these uncompensated health care costs. Therefore, this could result in cost savings or cost avoidance for states with Medicaid expansions.
In addition, states with expanded Medicaid coverage spent less on programs for people with mental and/or behavioral health conditions. Savings were also achieved in correctional facilities since federal Medicaid funds paid more for inpatient hospital costs of inmates who were enrolled in Medicaid. States that tax managed care plans and health care providers that serve Medicaid beneficiaries also saw higher revenue gains. All these factors together showed an overall four percent reduction in states’ spending compared to their traditional Medicaid programs.
All these are financial reasons why Tennessee should seriously consider Medicaid expansion. But the main reason, which I have not even mentioned yet, is the health benefit to uninsured Tennesseans. Homelessness significantly reduces life expectancy by as much as 25 years, according to some studies. This shows the significant connection between homelessness and health. A lack of access to housing means people live in unhealthy environments and often have no means to manage health issues properly. That’s why health providers have long listed housing as a social determinant of health.
The American Rescue Plan includes a large financial incentive that would make expansion an even better deal. Not being a health insurance expert, I’ll refrain from trying to explain the additional benefits to Tennessee would the state expand Medicaid under this incentive. But it sounds like most states would receive full coverage of the non-federal share of expansion costs for several years.
Not only would Medicaid expand health coverage for thousands of Tennesseans who otherwise cannot afford insurance, Medicaid expansion could also allow the state to negotiate a waiver that could provide specific housing assistance and expanded support. Keep in mind, Medicaid is and remains a health program, so it is unlikely to cover all expenses of an evidence-based, best practice supportive housing program.
I recently had a conversation with an expert from CSH, also known as the Corporation for Supportive Housing, a national leader that works to strengthen communities’ approaches to ending homelessness. My big takeaway from that conversation was that if Tennessee (and politically speaking that is a big “if”) were to expand Medicaid, the benefit to utilize Medicaid dollars to address homelessness would depend on the type of waiver it would negotiate with the federal government. Even then, we need to understand that Medicaid typically covers between 30 and 50 percent of a support services budget that is necessary to implement permanent supportive housing programs. In other words, Medicaid would likely not cover all of it, but it could potentially cover a significant chunk of it. That means we would still rely on raising supplemental funding through local dollars (government and/or the private sector), other federal (HUD programs) or state dollars, etc. But, as established earlier in this column, Medicaid expansion would increase insurance coverage in Tennessee and therefore assist more people experiencing homelessness.
Evaluations of Medicaid expansion pilot programs in other states have shown that improving systems coordination is a key factor we must have in place in order for any expansion effort to be successful. This includes strengthening collaboration between health care and homeless services providers.
And finally, none of this matters much if we do not find a way to resolve the housing supply. In other words, if we cannot ensure that we have housing units that are accessible to people experiencing homelessness, we cannot build a permanent supportive housing program that works.
So, while we dream about future Medicaid expansion in Tennessee, we have work to do. And for me, the conversation of solving homelessness will not be successful if we do not wholeheartedly combine it with the affordable housing conversation.
My call for the O’Connell administration is as follows: help improve the understanding of the roles of the different departments and the expectations of what goals they achieve when addressing homelessness. In other words, the Office of Homelessness cannot solve homelessness alone. What exact role will a new Office of Housing take on in regard to homelessness? What are the roles and responsibilities of the Metropolitan Development and Housing Agency (MDHA)? What about Metro Social Services, the Metro Action Commission, the Health Department, Metro Schools, the Police Department, etc.?
We need these questions answered for Metro to function at its best for some of the city’s poorest residents. And doing so, will also get us closer to being ready if Tennessee politicians ever choose to take advantage of Medicaid expansion.