NCPA - National Center for Policy Analysis


December 16, 2008

Unemployed Tennesseans are now receiving taxpayer-subsidized insurance benefits as a result of Gov. Phil Bredesen's (D) decision to expand the state's "Cover Tennessee" program to include unemployed and "underemployed" residents, says Health Care News.

Cover Tennessee was established in 2006 to reduce the number of uninsured adult Tennesseans, which then stood at 715,000:

  • The program, which provides coverage of no more than $25,000 per year through Blue Cross Blue Shield of Tennessee, is paid for by enrollee premiums, employer fees and state tax dollars.
  • Individual's premiums vary based on age, medical history and behaviors judged by the state to affect health, such as tobacco use.
  • In its 3 years of existence, Cover Tennessee has cost taxpayers $251 million.
  • According to the University of Tennessee's Center for Business and Economic Research, the number of uninsured in the state has fallen to roughly 566,000, a decrease of 149,000, but only 15,000 of those are enrolled in Cover Tennessee.

In response, Bredesen proposed the new eligibility category, called "Tennesseans Between Jobs," earlier this year.  It was approved by the state General Assembly in May and went into effect in late September:

  • Tennesseans Between Jobs opens Cover Tennessee eligibility to individuals who have worked at least one 20-hour week in the last six months and earned $43,000 or less in income annually.
  • New enrollees are expected to pay two-thirds of the normal Cover Tennessee premium, with the remaining one-third being added to the state taxpayers' share of the cost.

Analysts and legislators criticized the move as an expensive expansion of an already ineffective program, implemented in hopes of increasing its currently sparse enrollment.  Instead, they say, a better idea would be to implement market-based reforms that decrease onerous mandates and regulations and allow the costs of health care to come down, says Health Care News.

Source: Joe Emanuel, "Tennessee Expands Welfare Benefit Eligibility to Include New Taxpayer-Funded Health Care," Health Care News (Heartland Institute), December 2008.


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