White House Unsure How Closely Tennessee ‘Public Option’ Was Examined

By Fred Lucas | July 20, 2009 | 6:52 PM EDT

President Barack Obama attends a roundtable discussion with health care providers at Children's National Medical Center in Washington on Monday, July 20, 2009. (AP Photo/J. Scott Applewhite)

White House (CNSNews.com) – The Obama administration is looking more closely at the rising costs of health care than it is at states that have instituted health care reform programs, White House Press Secretary Robert Gibbs told CNSNews.com on Monday.

“I think a number of plans and proposals that have been instituted by states have not necessarily begun first by addressing the rising cost and how to turn the curve on what government spends on health care,” Gibbs told CNSNews.com. 

“I think that's why the president has decided, rightly so, to put his time and resources -- no pun intended -- into ensuring that we don't forget addressing cost even as we look to expand coverage for those that don't have care.”

Gibbs was responding to a question about a Tennessee health reform law that essentially established a “public option” to compete with private insurers – a focal point of the health care plan supported by President Barack Obama and congressional Democrats.

The Congressional Budget Office (CBO) estimates that the Senate health care plan with the public option will cost more than $1 trillion.

At a weekend gathering of the National Governors Association in Washington, Tennessee Gov. Phil Bredesen (D), who spent two terms trying to manage the TennCare program, said he feared the House health care reform bill would impose “the mother of all unfunded mandates” on the states, The New York Times reported.

“Medicaid is a poor vehicle for expanding coverage,” Bredesen was further quoted as saying in The Times, in reference to the public program that provides health care coverage to the poor. “It’s a 45-year-old system originally designed for poor women and their children. It’s not health care reform to dump more money into Medicaid.”

TennCare began in 1994 with the promise of increasing coverage and saving money. But the program went from 800,000 enrollees to 1.4 million in 2004 as people left their private plans to enroll in the more generous benefits package in TennCare.

Massive cuts had to be made and more than 300,000 people were removed from the rolls to keep the program. The budget has grown to nearly $8 billion, and the program has been mired in litigation. (See previous story)

“I don’t know the degree to which folks here have looked at TennCare or other [state] plans,” Gibbs told CNSNews.com. “I would note that the House bill fully funds additional benefits passed through its legislation on Medicaid. And as you know -- and as others have pointed out during the briefing -- the jurisdiction for that in the Senate is the Finance Committee. They have not yet acted. So I think the fears expressed by the governors, certainly as it relates to the House bill, are unfounded.”

Gibbs said it “would be a bit out of my policy depth” to say how similar the public option favored by the president is to TennCare. However, he said that the president has stressed that his plan would be deficit-neutral.

But Rep. Marsha Blackburn (R-Tenn.) was a state legislator through many of TennCare’s problems and said more people should take a closer look at the state’s problems.

Blackburn asked Secretary of Health and Human Services Kathleen Sebelius in June to explain what lessons the administration has learned from Tennessee’s experiment with the public option.

Sebelius gave a short response last Friday.

“We have learned many lessons from the TennCare experience and recognize its goals, but TennCare is not a traditional public option,” Sebelius said.

Blackburn called the statement inadequate.

“All the talk has been theoretical – ‘If we do this, it will save money,’” Blackburn told CNSNews.com.

“Show me an example where the government delivered care cost less. Every example, the government delivery, it has led to rationing and delays to access. In many cases, health care delayed is health care denied. It is unconscionable not to talk about the lessons learned from the TennCare experience.”