Tennessee’s Medicaid demonstration fails patients

Prior to its departure from office, the Trump Administration approved Tennessee’s request for a demonstration to change how the state’s Medicaid program operates, and more importantly, how vulnerable patients access the health care they need.

This dangerous demonstration greatly restricts how the state’s Medicaid program – TennCare -- provides care to the state’s most vulnerable patients, including children and those with serious diseases. To make matter worse, it gives the state broad authority to determine what treatments are covered for the 1.4 million recipients of TennCare. The approval of the demonstration comes at a time when many are facing increased health and economic challenges due to the COVID-19 pandemic – challenges which would be further exacerbated by this demonstration.

PhRMA strongly opposes Tennessee’s Medicaid demonstration. Here’s why:

• The demonstration fails to protect the vulnerable patients who rely on TennCare. It jeopardizes access to lifesaving medicines and treatments for the nearly 1.4 million vulnerable people who rely on TennCare – including children and those with serious diseases. Putting patients access to care at risk only exacerbates the challenges people are facing as a result of the COVID-19 pandemic.
  
  
• The demonstration violates federal law and the Medicaid statute. States already have significant flexibility to manage costs. Instead of using that flexibility, this demonstration alters the careful balance between pharmaceutical manufacturers’ obligation to provide rebates on medicines and the state’s to obligation ensure patients’ access to most FDA-approved medicines.
  
  
• The demonstration could have unintended consequences. Spending on medicines makes up just 4.1% of total Medicaid spending in Tennessee. Limiting access to medicines in Medicaid is proven to increase costs in other health care services that are a far greater strain on state budgets than prescription medicines, such as emergency care and hospitalizations.

Tennessee’s demonstration fails to ensure robust access to care, including medically necessary treatments, and raises serious concerns about the long-term impact on some of the state’s sickest and most vulnerable people. The Biden Administration has already made clear that strengthening Medicaid is a top priority through its recent executive order, which includes a call to review demonstrations and waivers that may reduce coverage under Medicaid. To protect TennCare patients’ access to the health care they need and stop this disastrous precedent from going forward, Tennessee’s Medicaid demonstration should be at the top of the list for the administration’s review.