Tennessee Approves Dramatic Health Insurance Hikes, Hoping Insurers Will Stay On The Exchange

The state has approved substantial rate hikes for insurance plans offered to Tennesseans on the federal marketplace next year, and Tennessee’s insurance commissioner says she has “serious concerns” about its future.

People buying insurance on the federal exchange will pay an average of 44 percent to 62 percent more next year, under plans provided by Cigna, Humana and BlueCross BlueShield of Tennessee. That compares to rate increases of between 5 percent and 37 percent in 2016.

“I absolutely hate to approve increases of this magnitude, but I really don’t feel like I have much of a choice,” says 
Julie Mix McPeak, commissioner of the Tennessee Department of Commerce and Insurance.

She says the state double-checked the companies’ data and, in some cases, even brought in senior management to defend their requested rate hike.

At a press conference Tuesday, McPeak reiterated an argument that the state has been making throughout the summer: These companies are
 losing money on Tennesseans
who buy insurance through the marketplace, and if the state doesn’t allowed the insurers to raise their rates so much, they might stop offering it altogether.

“I know that we are talking about significant dollars to Tennessee families, and I don’t take that lightly at all,” McPeak says. “But I think it is a worse situation not to have any option available.”

Already, UnitedHealthcare backed out of the marketplace this year, leaving behind about 40,000 people who will have to find new coverage next year. 
As a result, consumers in more than half of Tennessee counties will now have only one option if they want to purchase insurance on the exchange, meaning they won’t be able to compare prices. 

“I do have very serious concerns about the viability going forward,” McPeak says. “Any one insurer or two insurers that decide to pull back or withdraw from the Tennessee marketplace can have a substantial impact.” 
 

The state’s goal in allowing these higher premiums is that insurance companies will break even next year — and therefore, not leave the marketplace.
 

The actual price for consumers will vary based on their location, age and the plan they select, among other factors. 

How Much Will It Cost?

According to the Department of Commerce and Insurance, a 45-year-old living in Middle Tennessee will pay, on average:

• BlueCross BlueShield of Tennessee: $612.50 per month in 2017, compared to $
  393.32 in 2016.
• Cigna: $500.63, compared to $314.63.
• Humana: $564.95, compared to $395.90.

How Much More Are They Charging?

Assurant, Community Health Alliance and UnitedHealthcare have all dropped off the federal exchange. The remaining three insurance companies have to take on even more high-cost consumers — part of the reason for the high rate increase next year, according to the state.

BlueCross BlueShield of Tennessee:

• 2015: 19% increase, on average
• 2016: 36.3%
• 2017: 62%

Cigna:

• 2015: 7.5% increase, on average
• 2016: 0.4%
• 2017: 46.3%

Humana:

• 2015: 14.4% increase, on average
• 2016: 5.6%
• 2017: 44.3%