Why Tennessee’s Health Insurance Rate Hikes Could Be Lowered Before 2018

Health insurance companies have officially submitted their premium requests for next year — or how much they plan to charge on the federal marketplace in Tennessee. The numbers would be high, if the state approves them.

But depending on actions at the federal level, it’s still possible that rates will not rise by quite as much as proposed. 

BlueCross BlueShield of Tennessee is asking to raise premiums on the marketplace by an average of 21.4 percent across the state. Cigna is asking for a 42.1 percent increase on average. (At the high end, one Cigna plan would nearly triple in cost, although the state says only about a dozen people would be affected by that.)

“I was disappointed in the rate requests,” says Tennessee insurance commissioner Julie McPeak, whose department will decide whether to approve the new premiums. “I was really hoping to see that Tennessee consumers were going to see a much more moderate change in premium rates.” 

This is not the first time insurance companies have wanted to hike up their rates. In fact, last year, both of them requested

even larger increases, citing higher-than-expected costs.

This year, the problem they cite is federal uncertainty: It’s unclear whether the federal government will keep paying out an Obamacare subsidy that covers part of the cost of insurance on the marketplace. 

“If Congress were to appropriate that or if the administration would promise to pay those payments through 2018, the rate increases would go down,” says McPeak.

The companies’ numbers also assume that Congress will overturn the federal mandate that requires Americans to buy health insurance, McPeak says, which could decrease the number of healthy Tennesseans buying insurance.

In other words, insurance companies filed these rate increases assuming a worst-case scenario for their budgets. The scenario might play out to be less costly for them.

But if so, McPeak says, the federal government would have to act fast: Under the current timeline, all of the details about health insurance for 2018, including how much it will cost, have to be finalized by the end of September.

How Much Will It Cost?

If the Tennessee Department of Commerce and Insurance approves the companies’ requests, here’s how much a 35-year-old living in Davidson County and surrounding counties would pay for a “silver plan” on the federal marketplace in 2018:

• Cigna: $628.17 per month, on average, compared to $417.95 in 2017
• Oscar Health: $491.31 per month. Oscar has not offered insurance on the Tennessee marketplace before. 

How Much More Are They Charging?

Humana has dropped out of the federal marketplace, following the lead of Assurant, Community Health Alliance and UnitedHealthcare in previous years. Oscar Health has just joined. Here are the rate increase requests for the two insurance companies — Cigna and BlueCross — that have stayed on the marketplace in recent years. (Historical data is from the Tennessee Department of Commerce and Insurance.) 

Cigna:

• 2018: 42.1% increase, on average
• 2017: 46.3%
• 2016: 0.4%
• 2015: 7.5%

BlueCross BlueShield of Tennessee:

• 2018: 21.4% increase, on average
• 2017: 62%
• 2016: 36.3%
• 2015: 19%