Tennessee health insurers request rates hikes of 21 to 42 percent for 2018

As Congress debates the future of the Affordable Care Act, Tennessee's biggest health insurers plan to boost health insurance premiums for individuals next year by 21 to 42 percent.

BlueCross BlueShield of Tennessee, the state's largest health insurer, asked state regulators Friday to grant another 21 percent increase in its individual rates for 2018. Cigna Healthcare, the state's second biggest health insurer, is asking for a 42.1 percent average increase in its individual plans under the Obamacare exchanges next year.

BlueCross said Friday it is making money this year from its individual plans offered on the Obamacare health exchanges for the first time in four years after increasing premiums by 62 percent in 2017 and 36 percent in 2016.

BlueCross spokeswoman Mary Danielson said the rate request for next year "is higher than what we would like to have filed but necessary to address the uncertainty at the federal level." The double-digit increase for another year is needed, she said, because of lingering questions over health care reform and whether the federal government will continue to fund cost-sharing reductions for low-income members.

"Our 2017 rates are allowing us to earn a margin for the first time in four years and would have enabled us to propose only a nominal increase for 2018 to cover expected changes in medical and operating costs," Danielson said. "However, we have to factor two significant uncertainties into our proposed rates for 2018 - whether the federal government will fund cost-sharing reductions and how the risk pool will change if the coverage mandate is not enforced."

Cigna spokesman Joe Mundy said the rate hikes sought reflect Cigna's experience under Obamacare this year and the uncertainty about the market in 2018.

"Our 2018 rate filings are based on our customers' historical claims experience, expected medical costs trends, product changes, overall market performance, along with the evolving rules, regulations and design of the marketplace," Mundy said.

U.S. Sen. Lamar Alexander, R-Tenn., said the BlueCross and Cigna rate hike requests "heap more bad news on Tennesseans who have already seen their premiums go up 176 percent over the last four years" under Obamacare.

"While the Senate is working on draft legislation to help slow these sky-rocketing premium increases and rescue the 350,000 Tennesseans who face the very real prospect of having zero options of insurance to buy in our collapsing Obamacare individual market, that will only be a first step in our work to create a healthier individual insurance market in Tennessee," Alexander said.

Cigna's pricing for 2018 assumes that the cost-sharing reductions are not funded, a factor that added an average 14.1 percent increase to its request.

Tennessee's only other insurance carrier, Oscar Health, is new to the market in 2018.

Humana, Aetna, United Healthcare and the Community Health Alliance all exited the individual market in Tennessee and are not proposing any plans on the health care exchange market.

The Tennessee Department of Commerce and Insurance will review the requests before deciding on the rate requests by August.

The state regulates insurance rates for individuals. Most Tennesseans are covered by employer-sponsored plans, whose rates are not directly set by the state, and the increases in premiums for group plans generally have not been as great in recent years as the rise in individual rates.

Among more than 2.6 million Tennesseans insured by BlueCross, for instance, only about 78,000 now are insured with individual plans through the health exchanges.

Chattanooga-based Blue- Cross initially offered some of the lowest cost Affordable Care Act plans in the country when the program began in 2014 "because we assumed a large number of young, healthy people would sign up for coverage," BlueCross spokesman Kelly Paulk said.

"Unfortunately, they didn't - and the medical services required by our new members were more expensive than we'd anticipated," she said. "The risk pool didn't get better. In fact, we lost $400 million over the course of three years because of the gap between our rates and the costs for medical services our members needed and our costs to operate the program."

If fewer people sign up for coverage, insurers complain that they usually are left insuring those who are sickest or need the most health care services and are therefore most likely to seek insurance.

In response to its early losses under Obamacare, BlueCross withdrew its individual coverage under the health care exchange market in 2017 in Tennessee's three biggest markets.

BlueCross plans to resume selling individual insurance plans under the exchange market in the 16-county Knoxville area next year when Humana plans to withdraw from the individual market. BlueCross won't offer coverage in Memphis or Nashville, however.

Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.

Upcoming Events