Tennessee Ordered to Cover Uninsurables Under State Plan

The US District Court, Middle District of Tennessee, issued a temporary injunction barring state administrators from denying medical coverage to the uninsured and uninsurable under the state's Medicaid program.

On Oct. 1, 2001, the Tennessee commissioner of finance and administration amended the state's TennCare plan to exclude uninsurables, such as those living with HIV/AIDS, from its medical coverage. Officials said the decision was not subject to federal regulations requiring review by a Medical Care Advisory Committee.

The officials noted that the program was suffering serious financial difficulties, and uninsurables still had access to acute care through other public and private programs. By extending coverage to the uninsured and uninsurable, the state had encouraged a "contraction of the private health insurance market," officials said. State officials also noted that an extraordinary growth in the TennCare population placed its rolls dangerously close to its stated maximum capacity of 1.5 million enrollees, therefore justifying the immediate exclusion of uninsurables. The exclusion was implemented without prior notice or hearing for those labeled uninsurable.

TennCare Director Marc Reynolds projected cost overruns of $37.5 million and noted that the state could save $7.5 million by excluding uninsurables.

Attorneys for the plaintiffs in the class action countered the state's claims. They said that while excluding the uninsured and uninsurable from coverage would save the state $155 million in expenditures, it would lose $435 million in federal funds for the program. The attorneys further noted that the Ryan White program had run out of money for drugs. Other federal programs, like Social Security disability, have a longer waiting period, meaning that HIV patients denied medication would develop AIDS sooner, resulting in an even greater drain on the state and federal systems.

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