State Senate strikes blow to Cover Tennessee
Finance commissioner: Bill to make companies bear all risk ‘kills’ plan
By TOM HUMPHREY, tomhumphrey3@aol.com
May 16, 2006
NASHVILLE - Gubernatorial candidate Jim Bryson led fellow Republican senators Monday night in a vote depicted by supporters of Gov. Phil Bredesen as killing his “Cover Tennessee” plan for state-subsidized health insurance. The Republican-controlled Senate voted 17-14 along party lines for Bryson’s amendment, which declares that insurance companies would bear all risk of financial losses in operating the program.
“It kills Cover Tennessee,” said Finance Commissioner Dave Goetz after the vote. “Insurance companies will not bid and will not participate if they have to cover all the risk.”
In other action, a scheduled vote to establish a state minimum wage in Tennessee $1 above the federal level of $5.15 was postponed until next week in the Senate. The House is set to consider the bill Wednesday.
After Bryson’s amendment was adopted, further consideration of the overall bill was postponed until Wednesday.
Still pending are other Republican-proposed revisions opposed by Bredesen, including amendments by Bryson and Republican Caucus Chairman Randy McNally of Oak Ridge to put limits on damages that can be assessed against doctors and hospitals in malpractice lawsuits.
As proposed by Bredesen, Cover Tennessee would provide a $50 per month state subsidy toward group health insurance for people who have no coverage now and who earn less than 2.5 times the federal poverty level, which works out to $24,500 per year for a single person and $50,000 for a family of four.
The plan would be available to small businesses - those with less than 50 people - that do not offer coverage to employees now. Under the plan, the average employee would pay $50 per month, the state would pay $50 a month and willing employers would pay $50 per month. If employers decline, the individual would pay $100.
The state would solicit bids from major insurance companies and select the one offering the best available insurance package for $150 a month.
Bryson, widely regarded as frontrunner for the GOP gubernatorial nomination, contended that Bredesen’s plan as drafted could lead to taxpayers covering major losses in the program.
“This plan is going to be risky,” Bryson said. “This amendment says we’re not going to take on the risk. (Without it) we run the risk of having another TennCare situation. This will force the plan to be self-sustaining.”
Goetz, who came onto the Senate floor to defend the governor’s plan, said there are “already numerous controls built into the bill” to minimize risk to the state, including the ability to terminate the program if it becomes too costly.
He said insurance companies already will be at risk of losing the administrative fees they will receive under the contract.
Goetz said major insurance companies have told him that making them liable for any and all losses means they will not bid on the contract. That will be true especially in the startup year, he said, since there are some uncertainties in going with a new program of limited coverage at relatively low cost.
After the vote, Goetz called the vote “unconscionable” and said it amounted to saying “We’re not even going to try.”
Goetz said he is optimistic that the Democrat-controlled House will keep the program intact along the lines Bredesen proposed if the Senate vote stands. That would sent the bill into a House-Senate conference committee to resolve the differences if possible.
“We’re not done yet,” he said.
The vote marked the first time Republicans have united against a major Bredesen initiative in the Senate.
Tom Humphrey may be reached at 615-242-7782.
