The state is limiting first-year enrollment to the new Cover Tennessee health insurance program so it will have a stronger base before opening the doors to other low-income adults the following year, state Finance Commissioner Dave Goetz said.
Only workers employed by participating small businesses — those with no more than 25 workers, at least half of whom earn less than $41,000 per year — will be eligible when the program gets under way next year.
The plan calls for the state, employers and workers to each pay one-third of the average monthly premium of $150. The premium will vary based on such factors as age, weight or tobacco use.
Goetz said that by going through employers first, commercial insurers administering the plans will have an accustomed set of payment functions, including automatic payroll deduction for employees and electronic funds transfers from businesses.
And since employers will have to offer the plan to all their employees, Goetz said, “the hope is that the healthier 30-year-old will join in as well as the less healthy 50-year-old.”
Getting healthy workers to sign up is key because insurance plans depend on the premiums of enrollees who don’t need much medical care to cover the costs of those who do.
The state has set minimum standards for commercial insurers to meet and will then select the top two bids. The plan is scheduled to start signing people up by the end of the first quarter.
The state has also created incentives for insurers to sign up as many people as possible. The first of the two companies to enroll 10,000 people within the first six months will be eligible for a $500,000 cash prize, and the second company will receive $250,000 if it reaches that goal.
The same prize is offered for the next 10,000 people over the second six months, and a $1 million prize is available to the insurer that signs up 20,000 people the following year.
“If after one year of our plan operation we were able to get to 40,000 people, we then we would have the size of a program that makes this much more likely to be successful,” Goetz said. “That’s why we put this incentive out there.”
Starting in January 2008, the program will be opened to people working at ineligible businesses or at those companies choosing not to participate, as long as the workers agree to shoulder the employer’s portion of the premium, Goetz said.
“Think of it as the difference between wholesale and resale,” Goetz said. “We’re starting with a wholesale level and moving to retail in January 2008.”
Businesses with as many as 50 workers will also be allowed to participate in the second year, he said.
Officials are being careful not to repeat the mistakes of TennCare, the state’s expanded Medicaid program from which 170,000 people were cut last year because of out-of-control costs.
“TennCare was up and running in 60 days from approval,” Goetz said. “And a lot of decisions in order to get that done built disabilities into the program that carry through to today.
“We want to get this right, we want the private sector to get involved in this and running it as much as possible. It is insurance and has to operate like insurance.”
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On the Net:
Cover Tennessee: http://www.covertn.gov
Topics Tennessee
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