With Hospitals Under Stress, Tennessee’s Governor Pursues Medicaid Expansion

WASHINGTON — Under mounting pressure from financially strapped hospitals, Gov. Bill Haslam of Tennessee proposed on Monday an alternative plan for expanding Medicaid that he said would bring health coverage to tens of thousands more poor residents of his state without following traditional Medicaid rules.

Mr. Haslam, a Republican, made clear that he still opposed President Obama’s Affordable Care Act, which encourages states to expand Medicaid to everyone earning up to 138 percent of the federal poverty level, or $16,105 for a single person. Nonetheless, he proposed using federal Medicaid funds available under the law to cover some 200,000 low-income residents through their employer’s health insurance plan or the state’s Medicaid program.

Under the second option, some people would be charged co-payments that are not always required by Medicaid, along with premiums that are rarely required. But they could receive help paying those costs “by making healthy choices,” Mr. Haslam said in a news conference in Nashville, such as by getting preventive screenings.

Mr. Haslam said the Obama administration had informally agreed to the plan last week after months of negotiations. But it still needs an official federal waiver and the approval of the Republican-controlled Legislature — a potentially steep hurdle in a state where many lawmakers are aligned with the Tea Party and where opposition to Medicaid expansion has been strong.

Mr. Haslam said he would call a special session in January for lawmakers to consider the plan, adding, “I believe something this important to Tennesseans should have a full discussion and its own focus.”

Katie Hill, a spokeswoman for the federal Department of Health and Human Services, said it had had “productive discussions with Governor Haslam, and we look forward to the state submitting its plan.”

Ron Ramsey, a Republican who is the state’s lieutenant governor and Senate speaker, and who in the past has adamantly opposed Medicaid expansion, suggested in a statement that he was open to the plan.

“Governor Haslam has negotiated a deal which returns tax dollars back to Tennessee while using conservative principles to bring health insurance to more Tennesseans,” Mr. Ramsey said.

The state’s two United States senators, Lamar Alexander and Bob Corker, both Republicans, also issued supportive statements.

If Mr. Haslam’s plan receives the approval it needs, Tennessee will join 27 states that have expanded Medicaid under the Affordable Care Act, including nine with Republican leadership. Several other Republican governors have pushed for alternative forms of Medicaid expansion in their states since the November elections, partly a reflection of how badly hospitals and local communities want the federal funds that come with it.

“We now have several hospitals that have closed, and all the hospitals in the state are hurting to some extent,” said Michele Johnson, the executive director of the Tennessee Justice Center, an advocacy group. “It’s creating more and more pressure, especially in some of those really rural, far-right Tea Party districts, to understand this in a different way.”

The tide may also be shifting in states like Utah and Wyoming, where Republican governors proposed their own versions of Medicaid expansion this fall, and in Idaho, where a group formed by Gov. C. L. (Butch) Otter is revising an expansion plan in hopes of winning legislative backing. The conservative governors of North Carolina and, most recently, Alabama, have expressed openness to expanding Medicaid programs if they can fashion their own approach.

In perhaps the most unusual part of Mr. Haslam’s plan, the Tennessee Hospital Association has agreed to pay expansion costs beyond what the federal government covers. The Affordable Care Act calls for the federal government to cover all costs through 2016, with a gradually decreasing share thereafter, though never less than 90 percent.

Mr. Haslam described his proposal as a two-year pilot program that would need reauthorization.

Ms. Johnson said that some of the nation’s largest for-profit hospital chains, including Hospital Corporation of America and Community Health Systems, have headquarters in Tennessee and have watched the amount they spend on uncompensated care drop this year in states that expanded Medicaid while it has risen in states like Tennessee. “When they run the numbers, it’s dramatic,” she said.