TennCare
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TennCare

TennCare is the state Medicaid program for the state of Tennessee.  TennCare was established in 1994 under a federal waiver that authorized deviations from the standard Medicaid rules.  It was the first state Medicaid program to enroll all Medicaid recipients in managed care.  When first implemented, it also offered health coverage to other residents who did not have other health coverage.  Over time, this non-Medicaid portion of the program was significantly reduced.

TennCare was started in the early 1990s under Governor Ned McWherter as a health care reform initiative that had the twin goals of controlling rising Medicaid costs and increasing public access to affordable health care.  Tennessee sought and obtained waivers from the federal Health Care Financing Administration (HCFA) that allowed the state to conduct a five-year demonstration program.  Plans called for eliminating the Medicaid fee-for-service payment method by instead enrolling the state's Medicaid recipients in managed care programs administered by private-sector organizations.  Additionally, other state residents who lacked health insurance - particularly those who could not obtain insurance because of pre-existing medical conditions, could pay sliding-scale premiums to enroll in the same programs.  The cost of their coverage would be subsidized by savings from the Medicaid program.  The waiver that Tennessee received was one of the nation’s first Medicaid waivers, with the requirement that the program be "budget neutral" - require no greater federal funding than the previous Medicaid program.