Insurers win chance to seek higher Obamacare premiums

In an effort to prevent more insurers from abandoning the Obamacare exchange in Tennessee, the state's insurance regulator is allowing health insurers refile 2017 rate requests by Aug. 12 after Cigna and Humana said their previously requested premium hikes were too low.

Cigna and Humana filed to increase last year's premiums an average of 23 and 29 percent, respectively, on June 10. But in the interim, both insurance companies have told state regulators that the requests would not cover the expected claims, said Kevin Walters, spokesman for the Tennessee Department of Commerce and Insurance.

If granted, the higher requests would mean bigger jumps in monthly premiums for many people.

"In an effort to balance affordability and availability, the department will allow insurers to refile rate requests on the marketplace in order to prevent possible withdrawal," Walters said. “This is not an easy decision and Tennessee is not alone in choosing to allow insurers to refile their requests."

Spokespeople for Cigna and Humana could not immediately comment on the intent to refile.

Neither have yet submitted a revised request. If companies file revised requests, they will be required to have representatives meet with state staff to explain the increase, Walters said.

Why Obamacare rates are skyrocketing in Tennessee

BCBST tops hefty Obamacare proposals with 62% request

Given that the state has lost several insurers from the exchange in recent years, the loss of Cigna and Humana would imperil access to coverage in several parts of the state. BlueCross BlueShield of Tennessee is the only insurer planning to sell state-wide. BCBST asked for a 62 percent average rate request increase.

"We do not plan to amend our rate request from the original submission in June," said Roy Vaughn, chief communications officer for BCBST in Chattanooga.

Arizona allowed insurers to refile requests and five insurers, including Aetna and Cigna asked for higher rates. Cigna's request increased from 8.7 percent to 19.2 percent.

The number of insurers selling in Tennessee has decreased as companies rack up significant losses.

UnitedHealthcare opted to not sell plans in 2017 after being on the Tennessee market for a few months this year. Community Health Alliance, a co-op based in Knoxville, entered into voluntary run-off in the fall of 2015 and no longer sells insurance.

The future of the exchange in Tennessee is uncertain as insurers struggle to find a level where premiums are not outstripped by medical claims. The people buying insurance on the exchange have been sicker and heavier users of health care services than expected.

BCBST saw an increase from 2014 to 2015 in the prevalence of several diseases in exchange members:

• 52 percent increase in major congenital heart disorders.
• 31 percent increase in end-stage renal disease.

Walters said the factors behind the costs are frequent utilization of services, chronic disease, prescription costs – particularly specialty drugs – and age. Half of the people who buy plans on the exchange are over 45 years old.

He said the state officials thought further exits to be "too great a risk" to not allow insurers to revise proposals.

Humana said in July it would leave most of the areas in 2017 in which it sells plans. At that time, Humana planned to keep its presence in Tennessee.

The deadline for the state to approve rate requests is Aug. 23. The deadline will not change. The U.S. Department of Health and Human Services must approve the rates by the end of September.

Reach Holly Fletcher at 615-259-8287 or on Twitter @hollyfletcher. 

Corrected: A previous version of this story incorrectly reported information related to refiled requests from BlueCross BlueShield of Arizona. It requested 51.2 percent, down from 64.87 percent.

Insurers’ 2016 Market Share

• BlueCross BlueShield of Tennessee: 68.9 percent
• Cigna: 8.59 percent
• Humana: 6.74 percent
• UnitedHealthcare: 15.7 percent

Source: Decision Resources Group

2016 rate request approvals

• BlueCross BlueShield of Tennessee: 36.3 percent average increase.
• Cigna: 0.4 percent average increase.
• Humana: 15.8 percent average increase.
• UnitedHealthcare: First year on the exchange; no increase.