The whole story about how the Risk Adjustment (RA) program, what the lawsuit is about and why the funds were frozen gets pretty wonky, but the bottom line is...
“Our rate reduction would have been larger, but we had to account for added uncertainty in our rates due to indefinite suspension (the U.S. Centers for Medicare and Medicaid Services) placed on risk adjustment transfers between insurers,” said , said Mary Danielson, a BCBST spokeswoman. “Again, we were planning a larger reduction – around 18 percent – but needed to factor in the prospect of greater costs for 2019.”
Holy guacamole. I've noted repeatedly that unlike last fall, when average rate increases of 20-30% or more were commonplace for ACA individual market policies (due mainly to Trump cutting off CSR reimbursement payments), the preliminary rate requests for 2019 are actually averageing quite a bit lower than originally expected; of the 20 or so states I've crunched the numbers for so far, the weighted average for unsubsidized premium hikes is hovering around the 10% mark.
At first glance, it may sound like Democrats have been overplaying their hand when it comes to the "individual mandate repeal/short-term plan expansion is causing massive hikes!" attack. However, the rate increases from deliberate sabotage are happening...they're just being partly cancelled out by other factors, including:
Insurance Commissioner approves rates insurers filed for 2018; Cost to cover CSRs has been added to silver plan premiums
On September 20, the Tennessee Department of Insurance and Commerce (TDIC) announced that the state had approved the rates that insurers had filed for 2018. However, the announcement indicated that Cigna’s approved average rate increase was 42.1 percent, which was based on the filing Cigna submitted in June 2017. An updated filing, with an average rate increase of 36.5 percent, was submitted in August, and TDIC confirmed by phone on September 21 that the updated filing was approved. The slightly smaller rate increase is due to Cigna’s decision to terminate some existing plans and replace them with new plans).
The following average rate increases were approved for 2018 individual market coverage:
This year, to the best of my estimates, Tennessee's total individual market consists of roughly 300,000 people, around 2/3 of whom are enrolled via the federal ACA exchange. Humana is dropping out of the state next year, meaning roughly 79,000 enrollees will have to shop around.
To my knowledge, there are actually 6 individual market carriers in Tennessee this year: Aetna, TRH (Tennessee Rural Health), Blue Cross Blue Shield, Cigna, Humana and "Freedom Life" (which, again, is basically a phantom carrier with no enrollees). Aetna and Humana are out, so that leaves TRH, BCBSTN and Cigna. TRH doesn't appear to have submitted an official 2018 rate filing as of yet, but they only had 3,500 enrollees this time last year anyway, so likely won't have much impact on the overall weighted average rate hikes.
Julie McPeak is the Tennessee Insurance Commissioner. She was appointed by a Republican Governor, Bill Haslam, and while the position itself appears to be nonpartisan, I've found several links indicating that yes, she's a Republican herself. This is hardly surprising in Tennessee, of course, and there's nothing wrong with it...but it's noteworthy given that Tennessee is among the 19 states which has been fairly hostile towards the ACA in general over the years (no state exchange, no Medicaid expansion, total GOP control and so forth).
We appreciate getting to meet with you and your team yesterday to update you on BlueCross’s position relative to the individual Marketplace for Tennessee as the first deadline for 2018 approaches.
As most people know by now (well, most people in Tennessee, anyway), Humana decided a full two months ago to bail on the entire individual market, across the board--every state, both on and off the exchange, the works. This stung in quite a few counties across 11 different states, but the one which everyone is freaking out about is Tennessee...because there are 16 counties where Humana was the only carrier participating on the ACA exchange. Here's the list of Tennessee counties Humana is available in this year; note that there's an additional 14 counties where there's one other carrier available at the moment.
As noted a few weeks ago, Humana has already decided that regardless of what actions Donald Trump, Tom Price or Congressional Republicans end up doing (or not doing), they expect the 2018 individual market to be a big mess they want no part of...either on or off the exchanges:
...based on its initial analysis of data associated with the company’s healthcare exchange membership following the 2017 open enrollment period, Humana is seeing further signs of an unbalanced risk pool. Therefore, the company has decided that it cannot continue to offer this coverage for 2018. Through the remainder of 2017, Humana remains committed to serving its current members across 11 states where it offers Individual Commercial products. And, as it has done in the past, Humana will work closely with its state partners as it navigates this process.
Again, it's important to stress that Humana isn't just bailing on exchange participation, but to the best of my knowledge, they're pulling up stakes off-excahnge as well.
Regarding the company’s individual commercial medical coverage (Individual Commercial), substantially all of which is offered on-exchange through the federal Marketplaces, Humana has worked over the past several years to address market and programmatic challenges in order to keep coverage options available wherever it could offer a viable product. This has included pursuing business changes, such as modifying networks, restructuring product offerings, reducing the company’s geographic footprint and increasing premiums.
