First announced last month, Insure Tennessee would provide insurance coverage to Tennesseans earning less than 138 percent of the federal poverty level — roughly $16,000 for an individual and $27,000 for a family of three. The special session is set to start at 4 p.m. Feb. 2.

State lawmakers and federal health official must approve of Haslam's proposal before it can take effect. Haslam has already said he has a "verbal" agreement with federal officials on the deal; legislative approval during the special session could be tougher.

Although Haslam gave an overview of the plan in December, members of his own party have criticized him for not releasing specifics before now. In his release, Haslam calls his plan a "critical first step to fundamentally changing health care in Tennessee."

"There are few challenges facing us today as great as those presented by our broken health-care system," Haslam said in a news release.

"The Insure Tennessee plan is a conservative approach that introduces market principles to Medicaid, provides health-care coverage to more Tennesseans at no additional cost to taxpayers, and leverages a payment reform initiative that is working to control health-care costs and improve the quality of care."

Specifics of the plan

Haslam plans to use federal funds for his program that other states have used to expand income eligibility requirements under Medicaid, an option made possible through the controversial Affordable Care Act — also known as "Obamacare." The administration is adamant this is not an extension of Obamacare, nor "traditional" Medicaid expansion.

The plan requires the state to submit a "waiver" for approval to federal health officials. The waiver outlines two specific plans and different options for different ages. People who are 19 or 20 and considered children by Medicaid will be enrolled in TennCare, the state's version of the federal system. People ages 21-64 will have a choice of plans, the Volunteer Plan and the Health Incentives Plan.

A major component of the Volunteer Plan revolves around how much of the costs Insure Tennessee will cover and how much an employer will cover. The plan says employers must cover at least 50 percent of coverage, but the state's part isn't clear yet: Haslam spokesman Dave Smith said TennCare is working with an actuary to determine an amount for the state's "defined contribution." Smith said they hope to have updated information before the special session.

The governor's proposal is a performance-based plan that encourages healthy decisions from patients, as well as care quality and efficiency from providers. It includes financial incentives for providers to reduce costs while improving care.

Hospitals in Tennessee agreed to put up the matching funds to receive the federal dollars rather than continue to bear the cost of treating uninsured patients. The federal match is a generous one: 100 percent of the costs of insuring new people brought onto state Medicaid rolls through 2016. It then phases down to a permanent 90 percent matching rate in 2020.

Financial impact

Tennesseans will pay an estimated $7.8 billion in federal taxes that are earmarked for Medicaid from 2013 to 2022, according to a 2014 report from the Urban Institute, a policy think tank based in Washington, D.C. Advocates supporting Haslam argue the plan brings some of that tax money back to the state, rather than it only going to states that have already implemented Medicaid expansion or waiver plans. Without a waivered program or Medicaid expansion in Tennessee, those dollars are spent for Medicaid programs in other states such as Massachusetts and Vermont, supporters note.

"The comfortably insured are paying for this (via taxes and premiums that cover stranded costs at providers) but only getting sub-optimum care for neighbors, friends," said Stephen Corbeil, president of TriStar Health.

Haslam's plan is unlike structures in other states and is wholly individualized to the state, according to hospital executives and business leaders.

"Many of us (in the health care and business community) were impatient. The governor wanted to do what Tennesseans wanted," said Mike Schatzlein, CEO of Saint Thomas Health.

Critics argue the plan could end up costing the state "billions." The Beacon Center of Tennessee, a conservative policy think tank, immediately blasted the governor's plan after his December announcement. They argue "traditional" Medicaid expansion would cost Tennessee more than $3 billion, and Haslam's plan isn't sufficiently different.

Business community's support

The business community supports Insure Tennessee because of the jobs it will keep in the state and the federal money it will redirect to the state.

"We are very excited to support him in this. As business people this is a win-win," said Charlie Howorth, executive director of Tennessee Business Roundtable in Nashville.

Hospital executives are behind Insure Tennessee because it will bring more people into physicians' offices for routine care rather than using the emergency room for non-emergency issues.

Corbeil told The Tennessean that affiliate hospitals in states with expanded Medicaid programs such as Utah and Colorado saw fewer uninsured patients coming in for care. Increased access to primary care means less ER traffic for non-emergency situations.

Howorth and Corbeil are cognizant that the plan will meet pushback from opponents of the Affordable Care Act.

Insure Tennessee, however, should not be likened to ObamaCare, according to Howorth, because it has a unique plan structure and puts an emphasis on personal accountability.

"If you substituted 'highway' or 'roads' for 'health care,' you couldn't find a legislator that wouldn't vote for it," Howorth said.

Writer Tom Wilemon contributed to this story.

Reach Holly Fletcher at 615-259-8287 or on Twitter @hollyfletcher. Reach Dave Boucher at 615-259-8892 and on Twitter @Dave_Boucher1.

The Two Plans

Volunteer Plan: Tennessee will use federal funds to help working people afford insurance offered by their employers. Employers must cover at least half of the premium cost. The state will also use the federal funds to help cover part of deductibles and co-pays owed by workers receiving medical services.

The waiver says there will be a "defined contribution" through Insure Tennessee that covers the rest of the costs for coverage to a point. That point isn't clear: The waiver says the contribution is "still to be determined in accordance with the recommendations of independent actuaries."

Healthy Incentives Plan: Participants will be charged a premium of about $20 a month. Their co-pays will be $75 per hospital admission and $4 per outpatient service. They will have to pay $8 for non-emergency use of an ER. Pharmacy co-pays are $1.50 for generics and $3 for brand name drugs. The Managed Care Organizations that already contract with TennCare to administer services will supervise the program. Participants who take preventive health measures will receive credits put into Healthy Incentives for Tennesseans accounts to help them with co-pays and other costs.

Insure Tennessee - Waiver Amendment

Link to original article from The Tennesseean