A major health insurer has announced its plan to exit three key Tennessee regions, and one politician has claimed the company is also telling agents in other areas of the state that they will not receive commission for enrollments.
The Blue Cross and Blue Shield system announced that it will no longer offer plans in the individual marketplace in the Nashville, Memphis and Knoxville areas.
The company cited continuing losses -- an estimated $500 million over three years since the Affordable Care Act (ACA) plans were first offered, to the end of 2016 -- as the reason for the withdrawal. Some 120,000 people will have to find a new plan.
For the 80,000 customers in other, mostly rural areas where the company will still operate, plans could be unavailable through agents, according to Rep. Cameron Sexton (R-Crossville), who chairs the state’s House Health Committee.
Sexton was told that no commission will be paid to agents by Blue Cross and Blue Shield. Customers can contact the company to renew their plans in the likely event agents refuse to work without commission, Sexton told Patient Daily.
“This is a lot worse than I initially believed,” he said. “Patients who have been served by their agents will lose them.”
In a question-and-answer section on its website, Blue Cross and Blue Shield said that since the ACA passed, the company has worked hard to “make the law work for Tennesseans who need health coverage and care.”
“By the end of 2016, we anticipate losses approaching $500 million on ACA plans,” a company representative said. “We are raising rates to address the gap between what we charge and what we pay for medical care, but those aren’t the only factors we considered. Uncertainties surrounding the ACA at the federal level also played a role.”
Sexton said the state’s insurance commissioner signed off on a rate hike for the company for an average of 62 percent less than a month ago.
“It’s a business and they have a right to pull out if they choose,” he said. “My issue is, the commissioner of insurance approved a rate hike of 62 percent.”
The company requested and received a rate hike then withdrew from major cities within 30 days, according to Sexton.
“The company should not have asked for that rate hike knowing this was going to happen,” he said.
Sexton believes the company wants to operate where there is no competition and that, he added, “brings up a lot of questions.”
When announcing the sharp rate hikes for the three insurance companies operating in the state, Blue Cross and Blue Shield, Cigna and Humana, Commissioner of Insurance Julie McPeak was downbeat about the future of the state's exchange market.
“I would characterize the exchange market in Tennessee as very near collapse ... and that all of our efforts are really focused on making sure we have as many writers in the areas as possible, knowing that might be one," McPeak told The Tennessean. "I’m doing everything I can to prevent a situation where that turns to zero.”
