Blue Cross Blue Shield steps in as lone exchange insurer in some Tennessee markets

Blue Cross Blue Shield (BCBS) of Tennessee plans on selling individual market plans next year in the Knoxsville area, which had been in danger of having no participating insurer on the Affordable Care Act exchanges for 2018.

In a letter to Tennessee Insurance Commissioner Julie Mix-McPeak dated May 9, BCBS of Tennessee said its 2017 performance on exchange plans has been an improvement over the first three years, when it said it lost a combined $400 million. Now, a “better claims experience and more sustainable rate structure” means they’re willing to serve a region where a 16-county region where 40,000 customers would’ve been left with no exchange options, a situation which the ACA doesn't address. 

“I want to stress that our openness to this action is in no way a political decision, wrote the insurer’s president and CEO Bill Hickey. “Nor is it a reflection of our perspective on the stability of individual Marketplace overall. In fact, we can’t justify doing so based solely on current political uncertainty, but instead we believe it is an extension of our mission to serve our fellow Tennesseans, especially those who do not have other options for coverage.”

Their participation does come with some conditions. BCBS said it will “price-in” the risks of the potential legislative and regulatory changes to the ACA markets, particularly the uncertainty around cost-sharing reduction subsidies to insurers and the elimination of the individual mandate which fines customers who don’t purchase health insurance. Its rate request is due July 1.

The insurer is also requesting “flexibility” on rules regarding how much of a state’s rating areas it must cover. Regulations require plans to cover 51 percent of rating areas in the previous year in an effort to stop frequent exits and returns into markets.

McPeak said the department hasn’t made any decisions on those requests from BCBS, while praising their decision as a “huge win” for Knoxville customers. What will help lock down the insurer’s  participation, McPeak said, is some clear signals from Congress and HHS on the ACA markets for 2018.

“The most certainty that we can provide around funding levels, reinsurance programs or any flexibility in Obamacare terms and conditions for participation on the exchange will only add to the certainty that Blue Cross Blue Shield will participate in the Knoxsville area in 2018,” she said.