Tennessee Stands Up for “Mini-Insurance”

Posted on | April 26, 2007 | Comments Off on Tennessee Stands Up for “Mini-Insurance”

Over the years, Tennessee has garnered respect from members of the public health community for taking on health insurance coverage for its citizens. Its TennCare program to cover the poor was not without controversy or challenges over the years, but at least the state acknowledged the problem.

Now it’s looking at a new approach aimed at state employers who are increasingly dropping health care benefits for their employees. This approach utilizes a methodology quite different than the one announced last year for Massachusetts. Tennessee’s Gov.Phil Bredesen, shaken by the death of his brother who lacked coverage, is throwing his weight behind what’s being called "minimedical" coverage.

B.U. health policy professor Alan Sager just calls it "flimsy insurance." In 2005, 14% of the state’s 5.9 million citizens were uninsured. The mini-plan can be had for as little as $50 to $100 a month (shared by the state, the employer and the employee) compared to the usual $300 or so a month of a comprehensive plan.

Here’s the catch. You’re covered for a maximum of $25,000 a year with only $15,000 allowed to go to a hospital bill. The average hospital stay in the U.S. in 2004 cost $20,455, not including doctors’ fees.The actuaries say that fewer than 2% will exceed that cap each year, but that 2% will account for a third of the overall medical spending of enrollees.

Who picks up that bill? One answer is the hospital. So far only 65% (89/138) of hospitals have signed up to participate because of financial concerns.

The governor, who formerly owned a managed care company, is unsympathetic. "I don’t have a problem with hospitals holding the bag…We know it’s not perfect and not as comprehensive as we would like. But it gets people into the system."

Maybe so. But it’s hard for me to see how our problem with a segmented, disconnected, under-funded, and job-dependent health care system can be resolved by a strategy that is segmented, disconnected, under funded and job dependent.