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Tennessee has had the biggest premium rate increases of any state for individual health insurance plans under Obamacare exchanges over the past four years with the price for one of the most popular plans jumping nearly four-fold from $161 a month in 2014 to $610 a month next year.
But as consumers began Wednesday enrolling in health exchange plans for 2018, U.S. Sen. Lamar Alexander, R-Tenn., said he hopes Congress will soon adopt a bipartisan plan he helped author to give Tennessee consumers more choices, entice more people to buy health insurance and limit future rate increases while Congress develops a better replacement for Obamacare.
Without such changes, Alexander said consumers face "a great big sticker shock" in their premiums, especially if they are among those buying individual plans without any government tax credits for low and middle-income families.
Alexander, the chairman of the Senate health panel that oversees Obamacare, said the measure he developed with ranking Democrat Sen. Patty Murray of Washington would restore the subsidies to health insurance companies that the Trump administration cut off last month because of court challenges to the legality of such payments.
Known as cost-sharing reduction payments, the subsidies were expected to total $9 billion in the coming year and nearly $100 billion in the coming decade. Such payments are designed to cover the extra costs for insurers of covering all persons and
"Our proposal helps the hardworking Tennesseans who are really getting hammered – those without subsidies," Alexander said. "Because of these skyrocketing premiums, too many Tennesseans find themselves without a way to purchase health insurance."
BlueCross BlueShield of Tennessee plans to raise its individual insurance rates next year by an average of another 21 percent while Cigna plans to boost its individual rates by an average of another 36.5 percent next year. BlueCross, which is the only insurer left providing individual plans under the health exchange market in Chattanooga, said about two thirds of that increase is due to the cutbacks in the cost sharing payments.
The Alexander-Murray bill is co-sponsored by 24 senators and has "a good chance" of passage if President Trump will support the measure, Alexander said. President Trump recently praised the measure during a Senate Republican Caucus meeting, telling Alexander it was "great work on health care Lamar."
"Every day more and more members of Congress are coming to the conclusion that we have to do something to stabilize this market by the end of the year," he said. "This most likely will be included as part of a larger piece of legislation in the next month."
Alexander said "the prospects are good" for his proposal "and I think something will pass" because many of the Trump voters are being hit the hardest when the go into the individual marketplace to try to buy health insurance and find that premiums are priced too high for them to afford.
But Trump has yet to endorse the Alexander-Murray plan and critics call the cost sharing payments "a bailout" for health insurance companies that are already reporting healthy profits.
After losing nearly $500 million in its first three years of operation under Obamacare, Tennessee's BlueCross plan is making money on its individual plans this year following double-digit rate increases every year since 2014, company spokeswoman Mary Danielson said.
More than 233,000 Tennesseans get their health insurance through the health exchange markets and will have to sign up for 2018 coverage by Dec. 15. More than 80 percent of those signing up for individual health insurance coverage through the health exchanges qualify for some type of federal subsidy, which are offered for those making up to four times the poverty rate, or up to $94,200 in annual income for a family of four.
Although the state insurance department has approved and authorized such rates for 2018, Alexander said his bill to restore cost sharing payments would provide a rebate next year to enrollees to offset most of the increases in rates. The Alexander-Murray bill also would authorize a new higher deductible plan to offer another cheaper alternative coverage option.
Alexander said he drafted his cost sharing payment plan to offer states more flexibility as a transition method over the next couple of years until Congress develops a better alternative to Obamacare. Alexander said state insurance regulators will ensure that federal payments to insurers help offset the rise in premiums for individuals even though the premium rates for such plans are already set for 2018.
With the president's support, Alexander said he is optimistic his measure could be approved by the Congress as an interim step toward the GOP pledge to repeal and replace what Alexander called an "unworkable" Obamacare health program. Some health plans in 2018 in Tennessee will be as much as 58 percent higher than current rates, Alexander said.
The bipartisan bill Alexander is backing permanently amends the Affordable Care Act to give new flexibility for states to create insurance policies that have a larger variety of designs and lower costs. Such plans would still have to cover essential health benefits prescribed in the Affordable Care Act and can't exclude anyone because of pre-existing health conditions.
Alexander has said the legislation is the "first step to avoiding chaos that could occur during 2018 and 2019 if premiums continue to skyrocket and millions of Americans find themselves without a way to purchase insurance."
"Tennesseans are seeing their plans disappear," Alexander said. "Tennesseans had an average of 59 health plans to choose from when the exchanges opened in 2014, but will have just six in 2018."
Contact Dave Flessner at email@example.com or at 757-6340
This story was updated Nov. 1 at 11 p.m. with more information.