Tenn. insurance commissioner: Obamacare exchange 'very near collapse'

The Obamacare meltdown continues apace, with bad news rolling in from all over the country.

In Tennessee, the insurance commissioner declared the state exchange "very near collapse" as massive premium increases were approved as a desperate, last-ditch effort to save it.

Here are a few of the rate increases:

The Tennessean: 

“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.”

Tennessee’s exchange could still see changes. Insurers now apply with the U.S. Department of Health and Human Services to be federally qualified health plans on the exchange, and BCBST said Tuesday it is weighing all of its options.

Chattanooga-based BCBST, the only insurer that's sold statewide in the first three years of the federal exchange, is estimating that, by the end of 2016, it will have lost close to $500 million in three years. Such losses are unsustainable, said Roy Vaughn, chief communications officer of BCBST.

The insurer, which has previously underscored its support for the individual market, is still weighing what its presence in 2017 will look like. At this point in the process, the insurer only has to notify the state if it decides to make changes to where it will sell plans, McPeak said. It’s too late for another insurer to come onto the 2017 market.

“We agree with the assessment of the ACA marketplace in Tennessee. We appreciate the support of our request to close the gap between our rates and medical expenses for ACA marketplace plans. Beyond rates as we’ve discussed with the (TDCI), we continue to have concerns about uncertainty with the ACA at the federal level," Vaughn said to The Tennessean. "Due to these concerns, we are keeping all of our options open at this point about participating in the 2017 marketplace. We anticipate making a final decision in mid-September.”

Meanwhile, in Arizona, Pinal County will have no insurers offering Obamacare policies.  This is the first time a significant area in the United States will not be able to cover residents with Obamacare.

Business Insider:

After Aetna's announcement that it will roll back 70% of its offerings in public exchanges, Pinal County appears to be the only county in the US with a public exchange but zero insurersoffering Affordable Care Act plans in 2017.

This leaves people that need insurance through the ACA in Pinal County with limited options. Currently, Blue Cross Blue Shield of Arizona is participating in the county, but it has plans to pull out in 2017.

According to Cynthia Cox of the Kaiser Family Foundation, a nonpartisan healthcare-focused think tank, convincing BCBS to stick around seems to be the easiest option.

"Plan A is to try and work with the Blue Cross Blue Shield in that state or another provider in the state to get them to move in," Cox said. "The question is if there is any plan B."

The plan B could simply be that there is no exchange offering and people have to buy insurance on their own, but that presents issues as well.

"If that's the case, it's mostly going to be unaffordable for those who are already receiving subsidies," Cox told Business Insider. "They're no longer going to be eligible for the subsidies, and it is likely that private coverage is not going to be affordable without the subsidies."

Cox said that these people would not be subject to any penalties under the individual mandate, but if they were injured or got sick during the year, they "could be faced with significant medical bills."

To be fair, even before Obamacare, many areas of the country had limited options when it came to health insurance, but that probably isn't much relief for people in Pinal County and other places around the US.

Even if BCBS stays in Pinal County, the situation will be far from ideal.

Pinal County is the tip of the iceberg.  According to a recent report in the New York Times, a good slice of the country will be down to one insurance carrier to choose from on the exchanges by 2017:

According to an analysis done for The Upshot by the McKinsey Center for U.S. Health System Reform, 17 percent of Americans eligible for an Affordable Care Act plan may have only one insurer to choose next year. The analysis shows that there are five entire states currently set to have one insurer, although our map also includes two more states because the plans for more carriers are not final. By comparison, only 2 percent of eligible customers last year had only one choice.

A similar analysis by Avalere Health, another consulting firm, also highlighted the increase in areas with only one insurance carrier.

And those numbers are accurate only if there aren't any more companies that abandon the Obamacare exchanges.  Many of those states may find themselves, like Pinal County, with no options at all.

What can be done?  Expect the administration to employ a full court press to shame companies into remaining on the exchanges, or simply threaten them.  The administration is very good at that.

The individual mandate can now be considered meaningless.  You can't fine someone who wants to obey the law but can't because there are no insurance carriers. 

There is no "Plan B."

The Obamacare meltdown continues apace, with bad news rolling in from all over the country.

In Tennessee, the insurance commissioner declared the state exchange "very near collapse" as massive premium increases were approved as a desperate, last-ditch effort to save it.

Here are a few of the rate increases:

The Tennessean: 

“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.”

Tennessee’s exchange could still see changes. Insurers now apply with the U.S. Department of Health and Human Services to be federally qualified health plans on the exchange, and BCBST said Tuesday it is weighing all of its options.

Chattanooga-based BCBST, the only insurer that's sold statewide in the first three years of the federal exchange, is estimating that, by the end of 2016, it will have lost close to $500 million in three years. Such losses are unsustainable, said Roy Vaughn, chief communications officer of BCBST.

The insurer, which has previously underscored its support for the individual market, is still weighing what its presence in 2017 will look like. At this point in the process, the insurer only has to notify the state if it decides to make changes to where it will sell plans, McPeak said. It’s too late for another insurer to come onto the 2017 market.

“We agree with the assessment of the ACA marketplace in Tennessee. We appreciate the support of our request to close the gap between our rates and medical expenses for ACA marketplace plans. Beyond rates as we’ve discussed with the (TDCI), we continue to have concerns about uncertainty with the ACA at the federal level," Vaughn said to The Tennessean. "Due to these concerns, we are keeping all of our options open at this point about participating in the 2017 marketplace. We anticipate making a final decision in mid-September.”

Meanwhile, in Arizona, Pinal County will have no insurers offering Obamacare policies.  This is the first time a significant area in the United States will not be able to cover residents with Obamacare.

Business Insider:

After Aetna's announcement that it will roll back 70% of its offerings in public exchanges, Pinal County appears to be the only county in the US with a public exchange but zero insurersoffering Affordable Care Act plans in 2017.

This leaves people that need insurance through the ACA in Pinal County with limited options. Currently, Blue Cross Blue Shield of Arizona is participating in the county, but it has plans to pull out in 2017.

According to Cynthia Cox of the Kaiser Family Foundation, a nonpartisan healthcare-focused think tank, convincing BCBS to stick around seems to be the easiest option.

"Plan A is to try and work with the Blue Cross Blue Shield in that state or another provider in the state to get them to move in," Cox said. "The question is if there is any plan B."

The plan B could simply be that there is no exchange offering and people have to buy insurance on their own, but that presents issues as well.

"If that's the case, it's mostly going to be unaffordable for those who are already receiving subsidies," Cox told Business Insider. "They're no longer going to be eligible for the subsidies, and it is likely that private coverage is not going to be affordable without the subsidies."

Cox said that these people would not be subject to any penalties under the individual mandate, but if they were injured or got sick during the year, they "could be faced with significant medical bills."

To be fair, even before Obamacare, many areas of the country had limited options when it came to health insurance, but that probably isn't much relief for people in Pinal County and other places around the US.

Even if BCBS stays in Pinal County, the situation will be far from ideal.

Pinal County is the tip of the iceberg.  According to a recent report in the New York Times, a good slice of the country will be down to one insurance carrier to choose from on the exchanges by 2017:

According to an analysis done for The Upshot by the McKinsey Center for U.S. Health System Reform, 17 percent of Americans eligible for an Affordable Care Act plan may have only one insurer to choose next year. The analysis shows that there are five entire states currently set to have one insurer, although our map also includes two more states because the plans for more carriers are not final. By comparison, only 2 percent of eligible customers last year had only one choice.

A similar analysis by Avalere Health, another consulting firm, also highlighted the increase in areas with only one insurance carrier.

And those numbers are accurate only if there aren't any more companies that abandon the Obamacare exchanges.  Many of those states may find themselves, like Pinal County, with no options at all.

What can be done?  Expect the administration to employ a full court press to shame companies into remaining on the exchanges, or simply threaten them.  The administration is very good at that.

The individual mandate can now be considered meaningless.  You can't fine someone who wants to obey the law but can't because there are no insurance carriers. 

There is no "Plan B."