Despite record increases in premium rates for individual plans by major health insurers, 81 percent of Tennesseans should be able to buy individual health insurance coverage under the health exchanges of the Affordable Care Act for $75 per month or less, according to government figures released Monday.
The U.S. Department of Health and Human Services said Tennessee consumers will have an average of seven plans to choose from for their health care coverage in 2017 through the health insurance exchanges. HHS estimates 83 percent of those plans will cost the consumer $100 or less after government subsidies are provided to those signing up for such plans.
"Thanks to financial assistance, the large majority of current Marketplace consumers in Tennessee will be able to find plans with premiums between $50 and $100 per month," Health and Human Services Director Sylvia M. Burwell said in a statement. "Many uninsured Tennesseans could also qualify for financial assistance, as could 79,000 Tennesseans currently paying full price for off-Marketplace coverage."
The Affordable Care Act, or ObamaCare, provides financial subsidies for those making up to 400 percent of the poverty level, or up to $97,200 for a family of four, if a person doesn't have an employer-sponsored health plan where he or she works.
Health insurance premiums for individual plans next year are going up by an average of 62 percent for plans offered by BlueCross BlueShield of Tennessee, the state's biggest provider of ACA plans. Cigna Healthcare is raising its individual premiums by 46.3 percent and Humana individual rates are going up by 44.3 percent in 2017, according to rate increases approved this summer by the Tennessee Department of Commerce and Insurance.
HHS said Monday that before taxpayer-provided subsidies, premiums for a midlevel benchmark plan will increase an average of 25 percent across the 39 states served by the federally run online market.
Moreover, about one in five consumers nationwide will only have plans from a single insurer to pick from, after major national carriers such as UnitedHealth Group, Humana and Aetna scaled back their roles.
"Consumers will be faced this year with not only big premium increases but also with a declining number of insurers participating, and that will lead to a tumultuous open enrollment period," said Larry Levitt, who tracks the health care law for the nonpartisan Kaiser Family Foundation.
Republicans pounced on the numbers as a warning that insurance markets created by the 2010 health overhaul are teetering toward a "death spiral."
Most of the premium increases will be paid by the government, which is subsidizing coverage for many low- and moderate- income families who don't participate in group plans at work. Tax credits increase dollar for dollar with the cost of a consumer's benchmark plan so most of the premium increases for low- and moderate-income families buying individual plans will be absorbed by the federal government.
In fact, in some instances, some Chattanoogans with plans by United Healthcare which left the market this year may end up with comparable plans by BlueCross for the same or even less money next year, according to Bobby Huffaker, president of American Exchange, an online broker for Affordable Care Act plans. "The costs for the government are obviously going up, but for most individuals there are still affordable options for people to choose from with the tax credits available."
Huffaker said he is doubling his company' staff to gear up for the open enrollment period for the individual ObamaCare plans, which begins Nov. 1. Huffaker said 83 percent of his clients qualify for some type of subsidy and he expects to sign up 15,000 to 20,000 enrollees across the country this year for one of the individual health exchange plans.
A 27-year-old in Chattanooga with an income of $25,000 would qualify for $351 per month in premium tax credits to help buy the most popular health insurance coverage next year, according to the healthcare.gov website. That should offset most of the costs of such coverage and keep premiums up only a few dollars from last year.
HHS said the share of Tennesseans without health insurance now stands at 10.3 percent, down 28 percent since 2010 when Congress adopted ObamaCare.
HHS urged those returning to the ObamaCare program and re-enrolling during the open enrollment period to shop around for the best plan. If every returning consumer in Tennessee selected the lowest-cost plan available within their current level, average premiums would decrease by $37 per month, or 28 percent, from 2016 to 2017, HHS said.
But the number of plans available will be down for 2017 after United Healthcare withdrew from the market, Community Health Alliance of Knoxville was forced to shut down, and BlueCross scaled back its participation in the Obamacare program and ended its coverage in the state's three biggest cities.
U.S. Sen. Lamar Alexander, R-Tenn., said this summer after BlueCross announced its decision to limit its participation and raise rates again that "Obamacare is falling apart" and should be replaced with a more sustainable and affordable substitute plan.
But HHS said in spite of higher premiums and more limited coverage options for Tennessee consumers in 2017, ObamaCare is still working. Through 2016, rates for individual health insurance plans in the exchange marketplace remained below initial projections from the independent Congressional Budget Office, and below the cost of comparable coverage in the employer market.
The Chattanooga-based BlueCross plan for Tennessee estimates it has lost nearly $500 million over the first three years of its participation in the ObamaCare program on its individual health exchange plans, which were initially priced among the lowest in the country.
Some of the ACA's programs designed to support the new market in its early years are ending this year. Tennessee also opted not to expand the Medicaid program, which designers of ObamaCare envisioned as a means to help ensure more persons were covered by health plans so hospitals and physicians wouldn't have to continue to shift the burden of uncompensated care on those with insurance.
Last year even after the average rate on individual health plans jumped by 23 percent in Tennessee, the average premium for the 85 percent of Tennessee consumers with tax credits went up by only $2, or 2 percent, HHS said.
Open enrollment for persons to sign up for coverage in 2017 starts next Tuesday, and plan information is now available at www.healthcare.gov.
The Associated Press contributed to this report