Budget Roundup: TennCare Needs $118 Million More to Cover Drugs Like Ozempic

Last week, the state's many departments sat before Gov. Bill Lee and his staff to ask for millions of dollars to use in fiscal year 2026.

Whether these departments get the money will be decided later, but the Scene listened in on requests from the Department of Health, the Department of Disability and Aging, the Division of TennCare and the Department of Mental Health and Substance Abuse Services.

Below are some takeaways from the presentations.

TennCare needs $118 million more to cover GLP-1s

The highest requests came from the Division of TennCare. Just behind TennCare's largest budget item — $165 million total for the cost of doing business — is $118 million to pay for GLP-1 drugs ($41.5 million from the state and $76.8 million from the federal government). The state's Medicaid program is federally required to cover such drugs — commonly known by brand names Ozempic and Mounjaro — for diabetes and heart disease, and expects to be covering more prescriptions in the coming fiscal year.

It's been three years since the insurance program switched to the TennCare III waiver system. Tennessee is given more flexibility in Medicaid rules while promising to save the federal government money (claiming $1 billion in the past three years). It is also one of eight states that has not expanded Medicaid coverage.

While the first year of the waiver focused on adding children, pregnant women and parents to the roll and the second year focused on behavioral health and rural health, the third year thus far has focused on hurricane relief — giving $100 million.

Lee thanked TennCare deputy commissioner Stephen Smith for the "innovative idea."

"There is no question that these funds will impact the health of the people we serve," Smith says. "What is more basic to health than water and wastewater systems?"

Paying support professionals more

The newly minted Department of Disability and Aging, which combined the Department of Intellectual and Developmental Disabilities with the Tennessee Commission on Aging and Disability in July, asked its highest amount (just over $20 million) to support its Tennessee Early Intervention System. The program is for young children with developmental delays or disabilities.

The money is broken down into $13.4 million for more applicants and $6.7 million for rate increases for its staff. An additional $17.9 million would increase wages for direct support professionals in the department's various programs.

In addition, the Department of Mental Health and Substance Abuse Services asked for $11.5 million to pay addiction treatment providers more and $4 million to assist in retaining staff for the behavioral health safety net program.

Providing support for kids

The Department of Mental Health and Substance Abuse Services asked for $5.9 million in recurring funding to support school-based behavioral health liaisons, which would add 85 positions.

"We know through our work with [state program] Safe Schools that if kids are bullied, there's a high likelihood of becoming that kid that turns around and wants to hurt someone else," said commissioner Marie Williams.

The Department of Disability and Aging asked for a total of $11.6 million to support a joint program with the Department of Children's Services that serves children with intellectual or developmental disabilities in the foster care program. The funding would add additional beds for medically fragile children under DCS care in an effort to keep them out of hospital settings as well as pay for positions supporting these children.

When the Department of Disability and Aging opened up applications for inclusive playgrounds in the state, they received 86, and were able to fund only seven of them with $2.5 million. A requested $6.3 million would fund 14 more.

The Department of Health also requested to use $2.6 million of its settlement with electronic cigarette manufacturer Juul to make a media campaign and offer vape cessation programs for teens.

Establishing the Tennessee Memory Assessment Network

Much of the Department of Health's presentation focused on Alzheimer's, one of commissioner Ralph Alvarado's passions as a physician. The department requests $7 million in recurring state funding to establish the Tennessee Memory Assessment Network to improve early diagnosis and treatment. An additional $3.7 million would offer grants for the network to stand up five assessment clinics in rural areas to connect to a research center in Nashville. He anticipates 300 participants in the first year and 2,000 to 3,000 in the second year.

"Now if a patient would come in to a doctor, they could get referred to a specialist and it might be a year or 15 months before they get seen," Alvarado says. "In that time the disease has progressed so far that there's no point. They've missed that magic window."

Both the Department of Health and the Department of Disability and Aging asked for money to support the state's dementia navigator program, requesting $3.1 million and $1.6 million, respectively.

Clearing wait lists

The Division of TennCare claimed challenges to getting people off the state's Employment and Community First CHOICES wait list, which offers at-home care for people with disabilities. The current wait list is 1,500 people long. A requested total of $74.7 million ($26.2 in state funding and $48.5 in federal funding) would clear that wait list.

In addition, there are 3,500 on the Department of Disability and Aging's senior nutrition program wait list. They're asking for $8.4 million to fix that. In addition, there are 4,500 people on the wait list for its OPTIONS home care program — $8.2 million would address half of it.