Health insurance plans sold to individuals in Tennessee are dropping for a second year. State regulators have approved rate changes for 2020, and three of the five insurers are cutting their rates.
The average reduction for next year is 1.1%, a reversal of the wild increases during the early years of the Affordable Care Act marketplace.
Companies are now making enough money to balance out the relatively sick population they serve.
“Insurers couldn’t really justify raising rates again going into 2019 and now going forward because they’re making pretty healthy profit margins,” says Rachel Fehr, who studies the individual insurance market for the Kaiser Family Foundation.
The rules of participating in the marketplace also require companies to reimburse patients if they make too much profit over a three-year period. BlueCross BlueShield of Tennessee says it
expects to pay back $15 million to $20 million in the coming weeks.
Cigna is cutting rates nearly 6% on average. Oscar Health’s plans are going down more than 8%. (
Details here)
There’s also more competition statewide. While Tennessee doesn’t have any new companies on the marketplace, BlueCross BlueShield will resume offering plans in Nashville and Memphis. Celtic has also expanded to Nashville and Knoxville.
A few years ago, there were parts of the state at risk of having no plans offered on the individual marketplace, which serves roughly 221,000 Tennesseans this year.
While the rate decreases seems like welcome news, they may not help many customers who buy their own insurance in 2020. Roughly 90% qualify for some kind of subsidy, which
can move counter to rate adjustments.
The Centers for Medicare and Medicaid Services now has to approve rates. Open enrollment begins Nov. 1 and runs through Dec. 15.
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