Despite record increases in premium rates 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 today.
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 once government subsidies for low- and moderate-income families 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 today. "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 most of the so-called working poor or middle-income families with children who don't qualify for Medicaid or don't have employer-sponsored health plans where they work.
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.
But most of those 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.
For example, 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. That should offset most of the costs of such coverage and keep premiums up only a few dollars from last year.
Open enrollment for persons to sign up for coverage in 2017 starts next Tuesday, Nov. 1 and plan information is now available at www.healthcare.gov.
HHS said the share of Tennesseans without health insurance now stands at 10.3 percent, down 28 percent since 2010 when Congress adopted ObamaCare.
"This year's Open Enrollment offers the chance to build on that progress and further improve access to care and financial security for Tennesseans," Burwell said.
HHS also 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 metal 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.
"This is more evidence that Obamacare is falling apart," U.S. Sen. Lamar Alexander, R-Tenn., said this summer after BlueCross announced its decision to limit its participation, raise rates and not offer its individual health plans in all 95 counties. "Short term, we need to give families the opportunity to use their Obamacare subsidies to buy a policy for 2017 outside of the exchange. Longer term, regardless of who the new president is, we need to replace Obamacare with insurance choices that allow Tennesseans to select low-cost insurance that fits their budget and their health care needs."
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.
"Even though average Marketplace premiums are increasing more than they have the past two years, premiums in 2017 will remain roughly in line with projections issued by the Congressional Budget Office during the debate over the Affordable Care Act (ACA)," Burwell said. "Tennessee has made historic progress under the ACA, and now we want to build on that progress to further improve affordability, access, and quality."
But 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 that 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.
"Before the ACA, up to 2.8 million Tennesseans with pre-existing conditions were at risk of having no coverage options at all, and the individual market offered no easy way to shop and compare plans," said Kevin Counihan, CEO of the Health Insurance Marketplace. "Now, consumers can shop around to find coverage that fits their needs and get tax credits to help pay for it. Thanks to shopping and financial assistance, consumers will continue to have robust options for quality, affordable coverage."
HHS said its new Plan Compare 2.0 will offer a simpler, step-by-step sign-up process that integrates improved physician and drug look-up tools directly into the shopping experience to help improve how consumes buy their plans.