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TennCare proposes 4-year "Pathway to Independence" pilot offering up to $2,000 in premium assistance
Summary
TennCare Director Steven Smith told the Senate Commerce and Labor Committee a proposed four-year pilot would provide up to $2,000 in 12-month private insurance premium assistance to parents who lose TennCare because of increased income, with participants paying $15 a month. The pilot aims to reduce churn back onto Medicaid and is limited to those at or below 250% of the federal poverty level.
Steven Smith, TennCare director, told the Senate Commerce and Labor Committee that the agency wants to test a new approach to reduce churn from Medicaid by helping families transition into private coverage. "We will provide 12 months of insurance up to $2,000 total limited to those who do not exceed 250% of the federal poverty level," Smith said, adding that participants would be required to pay $15 per month unless their premium is lower.
Smith said the pilot — called Pathway to Independence — is intended to encourage longer-term private coverage and to reduce short-term re‑enrollment in TennCare, which he said drives higher costs when former members return uninsured and then seek care. "If this pilot is successful, if it works, it will be transformational," Smith said, while acknowledging no Medicaid program in the country has attempted this exact model and the outcome is uncertain.
The program would reimburse remaining premium costs up to the $2,000 cap or, if the full amount is not used, reimburse verified cost-sharing medical expenses up to the remaining balance. Smith said the pilot targets individuals at two points: while they are still on TennCare, to remove barriers to accepting higher-paid work, and after they leave TennCare to help them navigate the private market.
Committee members pressed Smith on how shared-savings funds and the waiver timeline affect the pilot's long-term sustainability; Smith said many shared-savings items were designed as nonrecurring pilots and that the existing waiver runs through calendar year 2030, with uncertainty about renegotiation.
