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Humana to Stay in TN Obamacare Marketplace

Health insurance carrier participation in the Tennessee health exchange is sparse in 2017. Well-established carriers have come and gone, one Tennessee-based insurance co-operative no longer offers health plans, rate hikes are common year-to-year, and insurers have lost money in in the first two years. It is too early to see if any insurers will profit in 2017. In spite of the instability, Humana chose to stick around on the Tennessee Obamacare exchanges for 2017.

Since 2014, Humana has been a pillar of Tennessee’s health care exchange. The nation’s 5th largest health insurer currently sells plans in the Knoxville, Nashville and Memphis markets. This means that thousands will not be looking for new health coverage.

Humana Gives Tennesseans More Health Insurance Options

Blue Cross Blue Shield health plans won’t be the only coverage option for many Tennesseans. While Blue Cross offers health plans in every corner of the state, the health insurance giant will face competition from Humana and Cigna in select markets.

Cigna and Humana both offer health plans in the Nashville and Memphis areas. Humana also offers health plans to Knoxville residents. Folks in these poleis are the lucky ones, for in these areas, residents will have two to three health insurers from which to buy plans.

Humana did say that they will raise rates. It is unclear what those rate increases will be.

Last year, Humana proposed raising the prices on its PPOx plan by over 18 percent. The Tennessee Department of Commerce and Insurance only approved a 5.8 percent increase.

Will Humana’s persistence pay off?

Humana stuck it out when other health insurers called it quits in Tennessee. It hasn’t seen a drastic rise in a customer base.

Most recently, United Healthcare decided to pull out of the Tennessee exchange. United Healthcare’s presence on the Tennessee exchange was short-lived, but the nation’s largest health insurer acquired over 40,000 new customers in its only year of operation on the exchange. United Healthcare entered the Tennessee marketplace just as one other health insurance company went belly up.

Community Health Alliance set up shop in 2014 to offer low-cost health plans to Tennessee’s residents. It managed to build a modest subscriber base of 1,588 members at the end of 2014. As other carriers increased their rates, Tennesseans flocked to Community Health Alliance as it offered the lowest-cost health insurance on the state exchange in 2015. CHA’s membership quickly soared to 27,000 members–a Golaith-sized number for a David-sized insurer. In the end, the David-sized company could not win the Goliath-sized fight to show the federal government that it was solvent enough to continue operations.  Community Health Alliance was able to pay out 100% of its claims out of its cash reserves.  Even still, regulators in Tennessee were not willing to keep the co-op intact. Thus, the fledgling insurer folded.

Who’ll compete with Humana, Blue Cross?

United Healthcare won’t offer health plans in 2017 in Tennessee. Community Health Alliance is long-gone. This leaves Blue Cross Blue Shield and Cigna as Humana’s competitors.

Competition from three insurers will only happen in two Tennessee markets. Other than this, Blue Cross Blue Shield will be the clear winner in terms of members.  Tennessee is fortunate to have such a well-run organization in the state to help keep premiums low and Tennesseans protected.  They have continued to stand by their members in the three years since competing on the federal exchange in Tennessee.

Will another insurer take a leap of faith and enter the Tennessee exchange? It could happen. 39 health insurers left the public health exchanges last year while 40 made their debut.

But it isn’t an easy task. The nation’s largest health insurer decided to leave the Tennessee exchange after one year. Blue Cross totals its marketplace losses at around $300 million in Tennessee since it began operating in the exchange market. With a 36% increase for 2016 it is hard to believe that profitability is not around the corner.  Rumors of another 30+% rate increase are circulating for 2017, but only time will tell.

Aetna has a positive outlook on its exchange business nationwide. CEO Mark Bertolini stated that the company will most likely break even in selling health plans on the ObamaCare exchanges.

There is ample opportunity for health insurers to expand operations in Tennessee. It will be interesting to see if Cigna will expand state-wide operations. Who knows? Aetna could also ride in on a white horse to compete with Blue Cross Blue Shield.

Philip Strang is an insurance agent and on-the-side copywriter. He enjoys helping others make sense of the complicated health insurance industry.

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