A Health Insurer Steps Up in Tennessee, Averting Possible Obamacare Crisis

A Health Insurer Steps Up in Tennessee, Averting Possible Obamacare Crisis
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Blue Cross Blue Shield of Tennessee said Tuesday it would re-enter the marketplace in a region of the state with no other option for individual health insurance, but that policies might cost more because of political uncertainty.

Calling the move “an extension of our mission,” while noting the company appeared to be turning a corner in Tennessee after three tough years financially, BCBS President and CEO J.D. Hickey said the decision was an effort to lower risk as Congress and President Trump continue their efforts to repeal Obamacare.

“Given the potential negative effects of federal legislative and/or regulatory changes, we believe it will be necessary to price-in those downside risks, even at the prospect of a higher-than-average margin for the short term, or until stability can be achieved. These risks include but are not limited to the elimination of Cost Sharing Reduction subsidies (CSRs), the removal of the individual mandate and the collection of the health insurer tax,” Hickey said in a letter to Commissioner Julie Mix McPeak of the Tennessee Department of Commerce and Insurance.

BCBS’s move comes just three months after Humana announced plans to pull out of Obamacare’s insurance exchanges starting in 2018. The greater Knoxville area, home to more than 800,000 people, had borne the brunt of the insurer’s departure. At the time, about 40,000 residents were left with no insurance options for next year.

Republican supporters of the American Health Care Act pointed to Knoxville as a prime example of the need to repeal Obamacare. “There’s a right way and a wrong way — the Affordable Care Act was not working,” Tennessee Representative Marsha Blackburn recently said. “It has run up the cost for individuals in the marketplace.” But McPeak told the Tennessean that she considers the return of Blue Cross Blue Shield of Tennessee to metro Knoxville a “first glimmer of hope” for a stabilizing market.

But Larry Levitt, senior vice president at the nonpartisan Kaiser Family Foundation, marked up the letter on Twitter, saying the Affordable Care Act is not in such dire straits.


Tennessee Senator Lamar Alexander applauded the move, but cautioned that it could be just a temporary fix.

“This is welcome news that should give some peace of mind to 34,000 residents in the Knoxville area that they may be able to use their subsidies to buy insurance next year. But if Blue Cross Blue Shield of Tennessee does ultimately offer plans next year it is only a temporary solution — premiums and copays will be higher and there’s no guarantee there will be insurance in the marketplace in 2019, 2020 and beyond,” he said in a statement.

Hickey said Blue Cross Blue Shield of Tennessee had remained in rural parts of Tennessee to avoid leaving much of the state without an insurance option. This past summer, BCBS had also agreed to step in at the last minute to replace Aetna in Pinal County, Ariz., to ensure nearly 10,000 people had an option. The insurer, though, increased premiums by 51 percent.

“There’s less uncertainty than there was a day ago. Residents will be better off with one alternative than zero,” said Matthew C. Harris, assistant economics professor at the University of Tennessee, Knoxville. “I don’t think this will change people’s feelings politically going forward. But people in this area will be better off now.”


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