Health Care and the Poor

Tennessee slashes its health care program for the impoverished, TennCare, which benefitted over 100,000 of the poorest in the state. It's a tough prospect. Something's got to be done. The system bloated out of control, right? So it's time to cut the benefits.

Sitting hunched at their kitchen table strewn with papers, Loren and Shirley Ellis consider a grim choice: their home or their medicines.

The couple could sell their brick home in Columbia, Tenn., a rural town south of Nashville, and Mr. Ellis, a former restaurant owner, could return to work. That would provide enough cash for healthcare for his wife, diagnosed with ovarian cancer and bipolar disorder. Or Mrs. Ellis could give up chemotherapy and the eight medicines she takes daily. That's the prospect they face if Mrs. Ellis is dropped by TennCare, Tennessee's health plan for the poor and uninsured.

"You walk around your house and ask yourself, 'How long? How long am I going to be here?' " she says.

Many Tennessee households face a similar cutoff as the state proceeds with removing some 191,000 residents from its expanded Medicaid plan.

Across the country, states are working to rein in healthcare costs under the crush of medical inflation and anticipated federal cuts to Medicaid. Tennessee's struggles have drawn national attention, partly because TennCare was hailed as a model when it was launched a decade ago, and partly because, according to critics, the cuts are the most comprehensive ever to a state health plan.

Before the cuts, 1.3 million Tennesseans received $8.7 billion in benefits - more per capita than any other state plan. Tenn-Care achieved this by using federal matching funds and managed-care organizations, which cut state costs while covering more Tennesseans than the state Medicaid plan it replaced.

But TennCare spun out of control, most observers agree, because of myriad structural, financial, and management problems. By last year, the program consumed one-third of the state budget. Costs would have jumped $650 million - or about 7.5 percent - this fiscal year, which started July 1, says Marilyn Elam, a TennCare spokeswoman. That's why Gov. Phil Bredesen (D) ordered the cuts, arguing the program's benefits were just too generous.

Clearly this program has become bloated, and much of it due to the state's mismanagement of the system. And clearly, the ones who will lose out because of this cut will be those who need it due to their wealth status; but also the rest of the insurance paying citizens of the state, who will still have to support the uninsured and underinsured as their premiums go up. Some studies point out that having uninsured costs us all more in health care costs, taxes, and insurance rates because the uninsured don't do preventative care, and thus end up requiring much more drastic emergency care, which we all pay for in the end.

This is a no-win.

Except, of course, for those companies that are really holding us down in terms of health-care costs. Those guys continue to make huge bucks, while people are literally having to choose between $100 pills and their homes.

Something has to be done about this problem. It is obscene.