Insurer Says It Will Fill Obamacare Carrier Hole In Tennessee For 2018

FILE - In this Oct. 6, 2015, file photo, the website, where people can buy health insurance, is displayed on a laptop screen in Washington. The Blue Cross Blue Shield Association said in a report released Wednesday, March 30, 2016, health insurers gained a sicker, more expensive patient population through the Affordable Care Act's coverage expansion. Its report offers an early glimpse at customers who have gained coverage in the past couple years. (AP Photo/Andrew Harnik, File)
Andrew Harnik/AP

Blue Cross Blue Shield of Tennessee announced Tuesday that it would enter a region in Tennessee where it was feared consumers on the Affordable Care Act exchanges would have no insurers to choose from. The company warned, however, that if the Trump administration halted crucial Obamacare subsidies to insurers, as President Trump has threatened, or otherwise took actions to destabilize the individual market, BCBS Tennessee would reverse its decision.

“Given the potential negative effects of federal legislative and/or regulatory changes, we believe it will be necessary to price-in those downside risks, even at the prospect of higher-than-average margin for the short term, or until stability can be achieved,” said a letter from J.D. Hickey, the chief executive at BCBS Tennessee, to Tennessee Insurance Commissioner Julia Mix McPeak.

The prospect that the Knoxville region of Tennessee would have no ACA insurer in the 2018 plan year, after Humana announced in January it was withdrawing, was a major talking point for Republicans as they seek to dismantle the Affordable Care Act. Roughly 30,000 Obamacare enrollees in the region would have had no plans on which to use their tax credits.

The letter said in addition to Blue Cross’ concerns that the Obamacare subsidies, known as cost-sharing reduction payments, would not be available in 2018, the insurer was also worried about the elimination of the ACA’s individual mandate and the implementation of its health insurer tax.

The announcement was notable in how explicitly BCBS Tennessee described the dynamics it has been facing:

As we discussed, BlueCross’s journey to get and keep people covered under this program has proven challenging, with three consecutive years of volatility and losses totaling more than $400 million. I’m pleased to report that, though still very early, our 2017 performance has improved due to a combination of better claims experience and a more sustainable rate structure based on the medical needs of the members we’re serving.

Tuesday’s letter said Blue Cross’ decision was “in no way a political decision,” nor was it a “reflection of our perspective on the stability of individual Marketplace overall.”

“In fact, we can’t justify doing so based solely on current political uncertainty, but instead we believe it is an extension of our mission to serve our fellow Tennesseans, especially those who do not have other options for coverage,” Hickey said.

The company’s calls for more certainty about the subsidies and the individual mandate mirror similar sentiments expressed elsewhere in the insurance industry.

McPeak, who has been critical of the Affordable Care Act, said the BCBS Tennessee decision was a “glimmer of hope” for Obamacare enrollees.

“Time is of the essence for Congress to act and provide some level of indication of what the market regulatory perspective will be for 2018,” she said. “The more certainty we can provide around funding levels, reinsurance program or any flexibility in Obamacare terms and conditions and participation on the exchange will only add to the certainty that BlueCross BlueShield will participate in the Knoxville area for 2018.”

Sen. Lamar Alexander (R-TN), who chairs a committee with partial jurisdiction over the health care legislation, also welcomed the news while calling it “a short term solution”

“One of the most urgent things we need to do and the reason we’re working is to try to solve the problem of rescuing millions of American who may be without insurance in 2018 unless we act,” he told reporters at the Capitol.

Asked about Hickey’s call for more certainty about the subsidies, Alexander said that “we might be able to in a bill that we develop.” As to Trump’s ability to clear up their fate, he said, “We’ll see.”

Read Hickey’s letter below:

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