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A View from the Cheap Seats Blog post by Garren Shipley
Posted August 21, 2009 | Copyright © The Northern Virginia Daily
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Health care, TennCare and other flamebait

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You have no idea how much I did not want to write about health care. Seriously, I loathe this subject. And not just because of the enlightened correspondence I get.

Writing about a highly emotion issue like this one is not unlike putting on a pair of chum-laden swimming trunks and jumping into a pool of starving Great White sharks.

But as a native Tennessean, I am contractually bound to tell people about one previous experiment with universal health care coverage -- TennCare, the Volunteer State's 1994-2005 experiment with reform.

On its face, it was simple. Tennessee's Medicaid program was bankrupting the state. So legislators got a waiver from the Clinton administration and radically restructured the program. Medicaid patients were served by a raft of HMOs, rather than a central state program.

Savings from the HMO program were then used to expand coverage to lower-income and "uninsurable" patients. And for a while, it worked. At least on paper. More people got health insurance, and the state saved money.

But then the federal share of those costs was slowly shifted back to Nashville, and costs began to skyrocket. Political leadership lacked the will to put serious cost controls in place -- aided in no small part by a raft of lawsuits banning even the most basic limitations on the program, including verification that participants were eligible, or even alive.

Loose prescription drug rules were even immortalized in song.

There were other problems, too. Some businesses quietly began dropping health insurance and encouraging employees to sign up for TennCare.

Skyrocketing costs created a political crisis, as the Republican governor tried to push an income tax through the legislature. Suffice it to say that move didn't go over well. In the end, the state wound up with a 9.75 percent sales tax to cover the tab.

And cover the tab it did until 2005, when a Democratic governor and former health care executive finally threw his hands up in exasperation and effectively killed TennCare. The 9.75 percent sales tax remains.

Having interviewed almost all of the actors involved over the course of two administrations, I can honestly tell you that no one in the entire TennCare fiasco acted with malice. But the state learned the hard way that real, serious cost savings have to be a part of any sort of universal health care program funded by the government.

It's the Costco principle: even if the Skittles are half the cost of Wal-Mart, you're still going to spend much more money if you buy 2 tons of them instead of a single pack.

I said all that to say this: health care and health insurance are complicated topics, and the potential for unintended and tragic consequences are enormous. All involved would be well served to tread with caution.

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