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Medicaid Work Debate Gets a Tennessee Twist

Federal government would need to sign off on state proposal

Tennessee has proposed using federal dollars from the state’s Temporary Assistance for Needy Families program to pay for its Medicaid work mandate. (Bill Clark/CQ Roll Call file photo)
Tennessee has proposed using federal dollars from the state’s Temporary Assistance for Needy Families program to pay for its Medicaid work mandate. (Bill Clark/CQ Roll Call file photo)

A growing number of mostly Republican-led states are itching to create work requirements for people on Medicaid, but finding a way to pay for it could prove challenging.

In Tennessee, lawmakers want to add a Medicaid work mandate, but only if they can use federal — not state — dollars to make it happen. And they think there may be a way to do just that.

Republicans have proposed taking money from a different government program that provides cash assistance to poor families and instead using it to cover the multimillion-dollar cost of creating and monitoring work requirements in its Medicaid program, known as TennCare.

Consumer advocates have decried the move, saying money that’s specifically meant to help vulnerable Americans shouldn’t be used to fund a program that could end up doing the exact opposite. People could lose their health coverage because they can’t meet the new work rules or navigate the mass of paperwork necessary to prove they’re working, they argue.

Supporters say that work requirements are aimed at helping to lift families out of poverty and that using money from the state’s Temporary Assistance for Needy Families, or TANF, program makes sense because one if its core missions is to promote job preparation and work.

A bill making its way through Tennessee’s Legislature would require the state to ask the Centers for Medicare and Medicaid Services for special permission to implement work requirements for able-bodied, working-age adults without children under the age of six. In Tennessee, Medicaid doesn’t cover single adults without kids.

Such a move would cost the state more than $18.5 million annually, according to a state legislative fiscal analysis. And proponents want to pay for the program using reserve funds from its TANF program, which provides cash assistance and work supports to poor parents.

It’s unclear whether federal officials will approve of TANF funds being used for Medicaid work requirements, but state lawmakers say they’ve had promising early conversations with CMS and the Department of Health and Human Services.

A spokeswoman for Tennessee Speaker Beth Harwell, the Republican who introduced the work requirements legislation, said work supports are one of the key ways TANF funds can be used. Those dollars may be used for things like child care or transportation that make going to work possible for parents.

“TennCare originally estimated that case work and those supportive services would be the largest expense in implementing a work requirement, so it only makes sense to leverage the federal dollars the state already has for that purpose,” said Kara Owen, Harwell’s deputy chief of staff for communications and policy.

Another legislator helping to shepherd the bill through had “encouraging” discussions with federal health officials in Washington recently, she added.

HHS’ Administration for Children and Families, which oversees TANF, has not provided formal guidance to Tennessee on the issue.

If the state can’t use TANF or other federal dollars, then it wouldn’t move forward with work requirements.

Reserve dollars

Part of the 1996 welfare overhaul, the federal TANF program provides roughly $16.5 billion in block grants to states, territories and the District of Columbia.

It provides monthly cash assistance payments to poor families, as well as work supports.

Tennessee’s TANF reserve funds grew to more than $386 million in fiscal 2016, while the number of people it serves has fallen by two-thirds since 1996 to roughly 33,000, according to the left-leaning Center on Budget and Policy Priorities, which tracks TANF spending nationwide.

The state’s TANF program has a large reserve even as it has one of the lowest monthly cash assistance payments to families in the country, said Michele Johnson, executive director of the Tennessee Justice Center, an advocacy group that opposes the work requirements legislation.

Those extra dollars should be used to help lift more children out of extreme poverty, not on a program that could cause parents to lose their health care, Johnson said.

“It really violates the core purposes of TANF,” she said.

No other states have so far proposed using TANF money to fund Medicaid work requirements, a process that could cost tens of millions of dollars for new technologies to track hours, hiring more staff and other expenses.

That’s in part because many states don’t have large amounts of reserve funds like Tennessee.

States have a long history of using TANF dollars to help fund other programs, such as pre-K and even college financial aid, said Liz Schott, a senior fellow with the Center on Budget and Policy Priorities.

“States are essentially raiding TANF, as they are looking to do here,” Schott said. “It’s really been tremendously abused.”

Tennessee’s work requirements legislation has passed the state House of Representatives and is awaiting discussion on the Senate floor.

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