A TALE OF TWO STATES

ARIZONA AND TENNESSEE REINVENT MEDICAID, BUT NOT WITHOUT PAIN AND PERILS

NO MATTER WHOSE PLAN WINS in Washington, the current Medicaid program is history. And in 11 states its future has arrived. While still collecting federal money, these states have designed their own health-care systems for their poor and elderly populations. A close look at two of them illustrates the difficulties of the job. Arizona's plan, in place since 1982, is hailed as a model of managed care, while TennCare, started in 1994, is still locked into a troubled and controversial infancy. Both offer visions of what may be facing all states in the lean times ahead. Their stories:

When Dr. Mabel...

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