Key Takeaways from Tennessee’s FY25-26 State Budget Hearings: Focus on TennCare and the Department of Health

Governor Bill Lee has officially kicked off the FY25-26 budget hearings, marking the start of critical discussions around funding priorities. This week, TennCare and the Tennessee Department of Health presented their proposed budgets, each highlighting significant achievements and outlining requests to address pressing healthcare needs.

At TPCA, we’re keeping a close eye on these updates, as the budget decisions made in the coming months will directly influence Tennessee’s community health centers and the individuals they serve. Below, we’ve highlighted the most relevant points from these presentations.

TennCare’s FY25-26 Budget Overview

On Tuesday, November 5, TennCare presented its proposed budget to Governor Lee and his team, emphasizing past successes and future plans. Notably, the department spotlighted the TennCare III waiver’s impact through shared savings.

Successes and Current Projects:

• TennCare III Waiver: The department celebrated three years of the TennCare III waiver, which has generated $900 million in shared savings. A notable portion of this—$100 million—has been allocated to a loan program that supports water, wastewater, and debris removal in areas affected by Hurricane Helene.

New Funding Requests

• Office-Based Addiction Treatment Model: TennCare is seeking over $4 million for a new office-based model to create a program modeled after the BESMART program, broadening the structure to apply to substance use beyond opioids. This step aims to increase access to effective, community-based treatment options for individuals battling substance use disorders.

For more details, watch TennCare’s full budget hearing or view the budget presentation slides.

Tennessee Department of Health’s FY25-26 Budget Overview

On Wednesday, November 6, the Tennessee Department of Health (TDH) presented its budget proposal. The department emphasized the continued success of the Health Care Safety Net program but did not request additional funds for FY25-26, recurring funding for the Health Care Safety Net will be $31.1M. Instead, TDH outlined several new funding priorities aimed at improving healthcare access and outcomes across the state.

Highlighted Funding Requests:

• Healthy Smiles Initiative: TDH requested $24 million to make its current dental pilot program permanent. This initiative aims to expand dental school class sizes, enhance access to dental care in rural and underserved areas, and provide essential services through the Smile 65+ program.