TennCare

TennCare is the state Medicaid program in the U.S. state of Tennessee. TennCare was established in 1994 under a federal waiver that authorized deviations from the standard Medicaid rules. It was the first state Medicaid program to enroll all Medicaid recipients in managed care. When first implemented, it also offered health insurance to other residents who did not have other insurance. Over time, the non-Medicaid component of the program was significantly reduced.

TennCare was started in the early 1990s under Governor Ned McWherter as a health care reform initiative that had the twin goals of controlling rising Medicaid costs and increasing public access to affordable health care. Tennessee sought and obtained waivers from the federal Health Care Financing Administration that allowed the state to conduct a five-year demonstration program. Plans called for eliminating the Medicaid fee-for-service payment method by instead enrolling the state's Medicaid recipients in managed care programs administered by private-sector organizations. Additionally, other state residents who lacked healthcare coverage, particularly those who could not obtain medical insurance because of pre-existing medical conditions, could pay sliding-scale premiums to enroll in the same programs; the cost of their coverage would be subsidized by savings from the Medicaid program. The waiver that Tennessee received was one of the nation’s first Medicaid waivers, with the overarching requirement that the program be "budget neutral", or require no greater federal funding than the previous Medicaid program.

The program was launched January 1, 1994. The state contracted with 12 statewide managed-care organizations that were established to implement the program through a competitive bid process. The state shifted more than 800,000 individuals from standard Medicaid coverage to coverage through a managed care company, and extended program benefits to 500,000 more people who were not Medicaid-eligible, but were uninsured or deemed uninsurable due to pre-existing conditions.

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