Some health insurance shoppers in Tennessee will see pre-subsidy premiums fall even as insurers plan for fewer healthy people to enroll.

Updated on July 11 at 9:30 p.m. CT to reflect Centene’s filing and on July 12 to reflect a Cigna statement.

Insurers angling to sell on the Tennessee individual health insurance market in 2019 filed their premium requests with the state July 11 — and some premiums will fall even as insurers plan for fewer healthy people to enroll.

Even though the U.S. Department of Health and Human Services surprised insurers over the weekend with news it would delay risk adjustment payments, BlueCross BlueShield of Tennessee and Cigna both asked for average premium decreases  — notwithstanding variation among their offerings.

Risk adjustment

Julie Mix McPeak, Tennessee’s insurance commissioner, said on July 10 the department was open to insurers getting a bit of flexibility if they needed more time to file for 2019 given the surprise announcement from HHS over the weekend. (For a wrap-up of McPeak’s comments, scroll down)

But, BCBST — one of the insurers in the U.S. with the most payments on the line, according to Axios — filed its request on the deadline: It requested an average 10.9 percent decrease although it had planned for an 18 percent decrease until the HHS announcement.

The insurer has been expecting $75.8 million in estimated payments from HHS in relation to the individual and small group plans it offered on the federal exchange for 2017 and 2018, said Danielson.

“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.”

Federal regulations

Insurers are expecting HHS regulations regarding short-term and association plans to strip out some of the shoppers who are younger, healthier, and therefore lower cost, according to filings.

“The change in regulations is anticipated to cause some young and healthy, lower cost members to migrate from the ACA individual market. Therefore, a larger proportion of higher cost people will remain in the overall risk pool of the ACA individual market, generating increased adverse selection and morbidity,” new entrant Bright Health wrote in its TDCI filing.

McPeak said there’s been “mild interest” regarding association plans and the agency is in “very early stage” discussions with entities interested in forming an association.

More » Competition shakes up Tennessee ACA exchange: Highlights urban-rural divide, ups interest in cost impact

Ambetter (Centene)

  • Selling: New Entrant. Greater Chattanooga and Memphis
  • 2019 request: Premiums from $294 to $2,028; avg. $704
  • Comments:

Centene wrote “rates were developed assuming steady funding of Advanced Premium Tax Credits (APTCs) and no funding of cost-sharing reduction (CSR) subsidy payments. The continuity of this funding approach will impact whether rates are sufficient and not excessive.”

These are the issues that Centene is watching regarding stability of the exchange:

“Changes include, but are not limited to, any legislative or regulatory amendment, court decision, 1332 waivers bringing reinsurance or other such programs to a state; or a decision by Congress, the Health and Human Services Secretary, or the Centers for Medicare and Medicaid Services director to fund cost-sharing reduction subsidies, alter advance premium tax credits, or further modify the individual mandate requirement and penalty.”

 

 

BlueCross BlueShield of Tennessee

  • Selling: Everywhere but greater Memphis and Nashville
  • 2019 request: Avg. decrease of 10.9%; premiums from $182.91 to $3,109.32; avg. $768.87
  • Comments:

BCBST wrote to the TDCI that “the proposed decrease is primarily driven by better than expected claim experience, the removal of Health Insurer Tax, a reduction to the margin target, and removal of out of network benefits” … “as the coverage basis shifts from PPO to EPO.”

In 2019, BCBST is moving to an exclusive provider network—a defined network of providers that frequently limits out-of-network coverage.

In this case, the change will mean that members won’t be covered out-of-network for services other than emergent care, said Danielson.

Bright Health

  • Selling: New entrant. Greater Knoxville, Memphis and Nashville
  • 2019 request: Premiums from $196.87 to $2,780.54; avg. $693.50
  • Comments:

Bright expects people to buy “less rich plans than the market average” because of its EPO, or narrow network structure.

According to its filing, Bright plans to pay commissions to insurance agents. Insurers stopped paying commissions in the enrollment period leading up to 2017.

Cigna

  • Selling: Expanding into Knoxville while keeping its Nashville, Memphis and Tri-Cities presence
  • 2019 request: Avg. decrease of 4.8%; premiums from $243 to $2,966; avg. $694
  • Comments:

Cigna wrote “the increasing cost of medical and pharmacy services and supplies accounts for a sizeable (sic) portion of the premium rate increases” and that it “anticipates that the cost of medical and pharmacy services and supplies in 2019 will increase over the 2018 level because of prices charged by doctors, hospitals, and other providers, in addition to more frequent use of medical services by customers.”

Cigna is taking into account the elimination of the penalty as well as the impact from new association and short-term plan regulations.

Statement from Cigna:

“We work closely with regulators to ensure that our products and rates offer a competitive, sustainable combination of quality and value. Our 2019 rate filings are based on our customers’ historical claims experience, expected medical costs trends, product changes, and overall market performance. While every population is different, in Tennessee we designed unique local solutions that allowed Cigna to reduce medical cost trends that create savings for our customers while still providing the best combination of access to quality care and overall value.

The long-term success of the individual health insurance market starts with rational, competitive pricing, as reflected in our recent filing.

We look forward to continuing to work constructively with the Department of Commerce & Insurance to deliver a healthy and sustainable individual health plan marketplace that benefits the health, well-being, and sense of security of their citizens.”

Oscar Health

  • Selling: Expanding into Memphis while maintaining its Nashville presence
  • 2019 request: Avg. increase of 10.84%; premiums range $487.25 to $1,240; avg. $718.21
  • Comments:

Oscar Health wrote in its filing that “the average morbidity of the individual market for Tennessee is anticipated to increase from that assumed in 2018, largely due to the repeal of the individual mandate penalty.”

The company incorporated “other potential future healthcare reform” into its rates and it expects “changes will cause overall market morbidity to increase as healthier members exit the market.”

Julie Mix McPeak’s July 10 comments: