Policy and Regulation News

BCBS Moves into Vacant TN Health Insurance Exchange

Blue Cross Blue Shield will offer healthcare plans for the individual ACA health insurance exchange in the abandoned Knoxville marketplace.

BCBS returns to empty ACA market

Source: Thinkstock

By Jesse Migneault

- Blue Cross-Blue Shield (BCBS) has announced its plans to offer coverage options on Tennessee’s Affordable Care Act health insurance exchange in 2018.  The separate rating area consists of 16 counties in the greater Knoxville area.

The region was left without an insurer when Humana pulled out of the individual health insurance exchanges for 2018.

BCBS made the announcement as the first 2018 deadline for the individual Marketplace in Tennessee approached.

After three difficult years, and losses totaling more than $400 million, the decision by BCBS to expand into the market was based on better-than-expected 2017 results. 

“BlueCross’s journey to get and keep people covered under this program has proven challenging, “ said JD Hickey, President & CEO of BCBS Tennessee in a recent letter to Tennessee Insurance Commissioner Julie Mix McPeak.

“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.”

Tennessee has had a long history of volatility in the individual health insurance marketplace. 

In 2016, BCBS announced it would be leaving three of the state’s most populous regions, including Knoxville.  That added to a departure by United Health Group which pulled out entirely for 2017 plans. This was preceded by a collapse of the state’s Community Health Alliance co-op in 2015.

BCBS maintains that the decision was not politically motivated, or a statement of affirmation on the individual marketplace in general. “In fact, we can’t justify doing so based solely on current political uncertainty,” said Hickey.  “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.”

The re-entry to the Knoxville region does come with some stipulations from the insurer.  Rates are subject to temporary increases.  BCBS stated that in the current regulatory climate it will price-in the downside risks until stability in the marketplace becomes clearer.   

Additional risks identified by the insurer include Cost Sharing Reduction subsidies (CSRs), the future of the individual mandate, and the health insurer tax.

In a request to the state insurance commission, BCBS asked for flexibility related to the requirement by Tennessee to serve a majority (51 percent) of the state’s rating areas year over year.  There are eight rating areas in the state. By including the Knoxville expansion, BCBS will be offered in six of them.  But there are no guarantees for any.

“And, while we hope this is unnecessary, we reserve the right not to sign our QHP agreement in September in the event of any post-bid changes that destabilize the market and affect our risk exposure,” said Hickey.

“We believe this fiscally conservative approach to limit our risk profile in this market continues to be in the best interest of all the members BlueCross serves across all lines of our business.”