Updated at 7:08 p.m. on Wednesday, August 22, 2018, with more information.
Where insurers are offering individual plans
* BlueCross will be in 81 counties and all markets except Memphis and the Nashville area
* Ambetter by Celtic is a new entrant to the Tennessee market next year with plans in Memphis and Chattanooga
* Cigna is expanding into Knoxville and continuing plans in Nashville, Memphis and Tri-Cities
* Oscar Health is expanding into Memphis and keeping its coverage in Nashville
* Bright Health is a new entrant next year with coverage in the Knoxville, Memphis and Nashville markets
Source: Tennessee Department of Commerce and Insurance
Health insurance rates for individual coverage in Tennessee will decline next year after four consecutive years of double-digit annual rate increases.
State regulators Wednesday approved lower rates for individual insurance policy charges in 2019 for the biggest health exchange plans offered in Tennessee under the Affordable Care Act, or Obamacare. At the same time, regulators granted permission for two new insurers to offer individual coverage plans in parts of Tennessee next year, adding new competition in Chattanooga and other major cities in the state.
"This year's approved rate filing requests are positive developments for Tennessee and our working families," Tennessee Insurance Commissioner Julie Mix McPeak said in a statement after approving the new rate schedules. "Two carriers are entering Tennessee markets for the first time in 2019, and another is expanding its coverage area, resulting in more options for more Tennessee consumers. Tennesseans will see competition that currently does not exist in many parts of the state, including in and around Chattanooga."
Health insurers said the individual market has tended to stabilize after four years of Obamacare experience and after worries about some cuts in government payments have been allayed by recent fixes in how the government pays insurers.
Tennessee's largest health insurer, BlueCross BlueShield of Tennessee, will cut its individual plan rates by an average of 14.9 percent next year, with premiums for differing individual plans ranging from $175.12 and $2,971.6 per month, according to the rates approved by the Tennessee Department of Commerce and Insurance.
Cigna Healthcare, which offers individual health plans in Nashville, Memphis and the Tri-Cities and is expanding next year to Knoxville, said it will cut its rates next year by an average of 12.9 percent, with premiums ranging from $243 to $2,966 per month for different individual plans.
Bobby Huffaker, CEO of the Chattanooga-based insurance broker American Exchange, said "the market is now healthy" and should be more affordable for more individuals next year.
"The individual market is profitable and we're getting new competition because more insurers want a piece of that market," said Huffaker, who created his company in 2013 to help market individual plans under the Affordable Care Act. "At first, carriers came in with rates that were too low and, by insuring people who may not have previously been covered, they ended up with a sicker and costlier population. But the market seems to have stabilized and is healthy now."
BlueCross had initially filed for a 10.9 percent rate cut this spring and increased its rate cut request to 14.9 percent last month after the Trump administration made changes in the risk adjustment rule for compensating insurers for the increased risk of taking on previously uninsured or under-insured people without regard to pre-existing health conditions.
"We're pleased we're able to lower rates beyond our original proposal after evaluating the impact of risk adjustment," BlueCross spokeswoman Mary Danielson said Wednesday.
BlueCross is the only health insurer offering individual health plans under Obamacare in Chattanooga this year. But next year Celtic Insurance plans to offer individual coverage in Chattanooga with premiums ranging from $294 to $2,028 per month, commerce and insurance department spokesman Kevin Walters said.
BlueCross nearly tripled its initial Obamacare premium rates over the past five years of Obamacare after those signing up for such coverage tended to be sicker and more costlier to cover than originally expected and some of the government payments promised by President Obama were not granted under President Trump and the Republican Congress.
BlueCross, which had lost more than $400 million during the first three years of Obamacare in the individual market, reported $113 million in net income in the individual market last year and anticipates additional profits this year.
Cigna also further cut its rates for 2019 from an initial 4.8 percent to 12.9 percent after the Trump administration made changes in the risk adjustment payments to insurers under Obamacare this summer. Cigna spokesman Holly Fussell said the company's rate proposals for next year "are based on updated medical cost trend data, our customers' historical claims experience, product changes, and overall market performance."
Oscar Health, which entered the Tennessee market in 2018, will continue its individual plans next year in Nashville and expand in 2019 into Memphis. But unlike its bigger competitors, Oscar Health is proposing to raise its rates next year from 7.2 percent to 10.84 percent under the rates authorized today by state regulators.
U.S. Sen. Lamar Alexander, chairman of the Senate health subcommittee that oversees Obamacare, called the rate cuts in Tennessee "welcome news."
But Alexander said rates would be even lower if Congress had adopted a bipartisan plan Alexander helped author earlier this year to give states more flexibility with the plans they could allow and if the federal government guaranteed cost-sharing payments to insurance companies.
"Even though for the first time since Obamacare took effect Tennessee is experiencing a rate decrease, the news for next year could have been even better had Democrats accepted the bipartisan proposal in March to lower premiums by up to 40 percent next year," Alexander said. "I will continue to encourage the administration to do everything they can to keep health care costs down as much as possible in the coming years."
Open enrollment for consumers to sign up for one of the individual plans under the health care marketplace for 2019 will be from Nov. 1 to Dec. 15.
Contact staff writer Dave Flessner at email@example.com or at 423-757-6340.