The Enormous Cost Of “Free Health Care” In Tennessee

There are a lot of things we can do to help reduce the cost of healthcare: tort reform, health care savings accounts, fighting price controls on American drugs in other countries, and streamlining the massive amount of rules and regs we have for bringing drugs to market.

But one thing we absolutely shouldn’t do is socialize our health care because as P.J. O’Rourke said,

“If you think health care is expensive now, wait until you see what it costs when it’s free.”

The good people of Tennessee had an opportunity to take up close a personal look at socialized medicine — a statewide version of Hillarycare — and the results were every bit as disastrous as you’d predict

“…In 1994, Tennessee passed what was then a very hot New Democrat idea–call it government managed care–a version of the reform the former first lady was also pitching nationwide. TennCare promised the impossible dream of politicians everywhere: Lower health-care costs while covering more of the “uninsured.” They got the impossible, all right. After 10 years of mismanagement and lawsuits, TennCare now eats up one-third of the state’s entire budget and is growing fast. Governor Phil Bredesen, a Democrat, is preparing to pull the plug and return the state to the less lunatic subsidies of Medicaid.

The TennCare concept was for the state to operate like an HMO, providing health insurance to those who needed it and paying the premiums for those who couldn’t afford it. The idea was even sold as a cost savings because it would provide “managed care” (volume discounts, preventative care, etc.). TennCare opened enrollment to hundreds of thousands of people who did not qualify for Medicaid, even to some six-figure earners. Costs quickly exploded, and despite attempts to tighten eligibility rules the program still covers 1.3 million of the state’s 5.8 million people.

…Left-wing legal activists have sued the state with impunity to underwrite the cost of nearly unlimited care. A Nashville non-profit called the Tennessee Justice Center has hamstrung reforms for years by suing to enforce a series of consent decrees, some of which predate TennCare.

Prescription drug costs alone increased 23% last year, as there are effectively no limits on the number or types of drugs the system will pay for. If a doctor prescribes aspirin, TennCare pays for it. Ditto for antacids for heartburn and other over-the-counter products. If TennCare denies a claim for a drug or any other type of care, an appeal can be filed for next to nothing. Fighting each appeal costs the state as much as $1,600 in legal fees. With 10,000 appeals filed every month, it’s often easier and cheaper to pay a claim, regardless of the merits.

TennCare is now in worse shape than it was a decade ago. Three of the 11 privately run Managed Care Organizations that insured TennCare patients and administered the program have fallen into receivership. Amid the legal wrangling, Blue Cross Blue Shield all but pulled out of the program. Today the state has assumed all the insurance risk and pays most of the premiums.”

So we have a program that only covers “1.3 million of the state’s 5.8 million people” & it eats up 1/3 of the state’s budget? Yep, that “free” health care is a real deal, isn’t it?

Share this!

Enjoy reading? Share it with your friends!

Send this to a friend