NCPA - National Center for Policy Analysis

PUBLICLY FUNDING HEALTH INSURANCE BALLOONS TENNESSEE BUDGET

December 7, 2004

TennCare, a program where the state of Tennessee provides health insurance to its citizens, is about to be dismantled after suffering a decade of mismanagement, lawsuits and bloated budgets, according to the Wall Street Journal.

In 1994, Tennessee adopted a government-managed health care system similar to the one Hillary Rodham Clinton pitched to the nation. Ostensibly, the program was designed to reduce costs and cover more of the uninsured. After 10 years, however, both political parties concede the program is not viable:

  • TennCare now accounts for one-third of the state's entire budget.
  • About 1.3 million of the state's 5.8 million people are covered, including some six-figure income earners.
  • Prescription drug costs increased by 23 percent last year, and there are effectively no limits on the number or types of drugs the system will pay for.
  • Three of the 11 firms that insure TennCare patients have gone into bankruptcy; even Blue Cross Blue Shield has all but refused to participate in the program.

Attempts at reform have failed, as social activists have sued the state with impunity to underwrite the cost of nearly unlimited care. Also, fighting each appeal for denying claims to care costs the state as much as $1,600 in legal fees and there are about 10,000 appeals filed each month, says the Journal.

Source: Editorial, "HillaryCare in Tennessee," Wall Street Journal, December 6, 2004.

For WSJ text (subscription required)

http://online.wsj.com/article/0,,SB110229351771491609-search,00.html

 

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