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Tennessee health insurance

Bright & Celtic joining Tennessee's exchange; Cigna & Oscar expanding coverage area; Rates — and subsidies — decreasing for 2019

Tennessee overview

Tennessee can be counted among the states with higher uninsured rates and a bit more resistance to the Affordable Care Act. As such, it opted for a more hands-off approach with a federally facilitated exchange and has not yet expanded Medicaid. The state has also allowed non-ACA-compliant Farm Bureau plans to continue to be sold to healthy residents, resulting in an ACA-compliant risk pool that’s sicker than average states.

Health insurance premiums in Tennessee’s individual insurance market are decreasing for 2019, but that’s following two years of sharp increases. In August 2016, Tennessee’s insurance regulator called the state’s exchange “very near collapse” after she approved 2017 health insurance rate increases averaging 44 percent, 46 percent and 62 percent for Humana, Cigna, and Blue Cross Blue Shield, respectively.

And options in the individual health insurance market in Tennessee dwindled for 2017. BlueCross BlueShield of Tennessee left the state’s three major metro areas where it covered a majority of individual enrollees, although they re-entered the exchange in the Knoxville area for 2018, because Humana’s departure in that area would otherwise have left 14 counties with no insurance options at all. The Tennessean reported that Nashville General Hospital at Meharry, Saint Thomas Health, and Vanderbilt University Medical Center would not be in-network for in plans sold through the state’s exchange in 2017, thereby placing those who were unaware of the change at risk for “hefty out-of-network bills.”

And for 2018, average premiums spiked again in Tennessee’s individual market, increasing by an average of 28.5 percent (most of which was due to uncertainty caused by the Trump Administration).

So the influx of new insurers to Tennessee’s market in 2019, and the overall average rate decrease, has to be viewed in conjunction with the fact that insurers left the exchange in past years, and the ones that stayed implemented hefty rate increases in 2017 and 2018.

But for 2019, Bright Health and Celtic are joining the Tennessee exchange, and Oscar and Cigna are expanding their coverage areas. And overall average premiums are decreasing by more than 12 percent. But enrollees who receive premium subsidies (90 percent of all on-exchange enrollees in the state) need to pay close attention to how their after-subsidy rates will change for 2019. The combination of new insurers in some areas and varying rate changes means that the average benchmark premium in Tennessee will be 26 percent lower than it was in 2018.

Since premium subsidies are based on benchmark premiums (specifically, the subsidies are calculated to be sufficient to get the after-subsidy benchmark premium down to an affordable level relative to the person’s income), average subsidies will be smaller in Tennessee in 2019. And the reduction in subsidy amounts will be more significant than the overall reduction in rates, making it particularly important for enrollees to shop around during open enrollment and consider a different plan if it presents a better value.

Tennessee’s uninsured rate has dropped, but would be lower if the state expanded Medicaid

Despite an overall aversion to the Affordable Care Act, Tennessee’s population continues to see improved health insurance coverage under the healthcare reform law. The uninsured rate for children in Tennessee had dropped to 4 percent by 2016, which was lower than the national average of 5 percent. And the state’s overall uninsured rate has dropped from 13.9 percent in 2013 to 9.5 percent in 2017.

But although that’s an improvement, it’s still higher than the national average of 8.7 percent. That’s due in large part to the fact that Tennessee has refused to accept federal funding to expand Medicaid under the ACA, leaving 163,000 residents without any realistic access to health coverage.

The number of people who would gain coverage under Medicaid expansion is much higher than this, because people with income between 100 and 138 percent of the poverty level are currently eligible for subsidized coverage in the exchange (not all are enrolled, however), and they would switch to Medicaid eligibility if it were to be expanded.

2019 Tennessee rates and carriers

Five insurers are offering plans in Tennessee’s exchange for 2019, including newcomers Celtic and Bright.

Blue Cross Blue Shield of Tennessee and Cigna, which have the bulk of the market share in Tennessee in 2018, are both reducing their premiums for 2019. Oscar is increasing their average rates, but they only have about 14,000 members:

  • Blue Cross Blue Shield of Tennessee: Average premium decrease of 14.9 percent
  • Cigna: Average premium decrease of 12.8 percent
  • Oscar: Average increase of 7.2 percent to 10.84 percent
  • Bright: New to the market for 2019
  • Celtic: New to the market for 2019

Tennessee Lawmakers generally opposed to the ACA

Donald Trump, who campaigned on a promise to repeal and replace the ACA, easily won Tennessee in the 2016 election.

In 2010, Tennessee’s U.S. Sens., Lamar Alexander and Bob Corker (both Republicans), voted against the ACA. In the House, four Republican representatives voted no while five Democratic representatives voted yes. Alexander and Corker are both still in the Senate, (although Corker is retiring from the Senate and is not seeking re-election in 2018), and the U.S. House now has just two Democratic representatives from Tennessee, and seven Republicans.

The current congressional delegation from Tennessee is largely opposed to the ACA. This includes Rep. Marsha Blackburn, who has been very vocal in her opposition to the law, and who shepherded the American Health Care Act (an attempt to repeal the ACA) through the House as part of her Budget Chair duties. Blackburn is running for Senate in 2018, to fill the seat Corker is vacating. Her challenger, Phil Bredesen, has been more critical of the ACA than many of his fellow Democrats.

Bredesen was governor of Tennessee when the ACA was enacted, although he was term-limited and left office before the bulk of the ACA’s provisions were implemented. His successor is a Republican, and has overseen ACA-implementation in Tennessee since 2011. But Governor Bill Haslam has not been as outspoken against the ACA as many other Republican governors. The state opted to let HHS run the exchange and has not yet expanded Medicaid, but Haslam worked with the Obama Administration to try to gain approval for his modified version of Medicaid expansion, and he met with then-Secretary of HHS Sylvia Matthews Burwell in July 2014 to continue the discussions he had been having with Secretary Sebelius.

Haslam has said he would like to expand Medicaid to cover another 161,000 low-income Tennessee residents, but he wanted higher co-payments than the Obama Administration HHS would allow, and no compromise was reached.

The Trump Administration is allowing states to impose work requirements on their Medicaid populations, which was a non-starter under the Obama Administration. Tennessee enacted a law in 2018 that directs the state to seek federal approval for a TennCare (Tennessee Medicaid) work requirement, although the state had not submitted a waiver proposal as of late 2018. Several other states have received, or are seeking, federal approval for Medicaid work requirements in 2018.

Tennessee has allowed non-ACA-compliant Farm Bureau plans to continue to be sold to healthy Tennessee residents, which has resulted in a less healthy risk pool for the ACA-compliant market in the state. Tennessee has long regarded Farm Bureau plans to be separate from the insurance industry, so they’re not regulated by the state’s rules that apply to insurance. By opting to continue that practice in 2014 and beyond, Tennessee allowed those plans to continue to be sold to healthy applicants. They were the only state in the country that allowed this for the first few years of ACA implementation, but Iowa is joining them in 2019.

Enrollment in qualified health plans

At the start of the first open enrollment period, the Kaiser Family Foundation estimated that 645,000 residents in Tennessee could potentially utilize the exchange to purchase qualified health plans, and that 387,000 of them would be eligible for premium subsidies.

By mid-April 2014, when the first open enrollment period ended, 151,352 people had finalized their plan selections in the Tennessee exchange, and 78 percent of them received subsidies to lower their premiums.

268,867 people enrolled during the 2016 open enrollment period. Effectuated enrollment for 2016 had dropped to 231,705 by March 31.

234,125 people enrolled in private plans through the Tennessee exchange during the 2017 open enrollment period. This was about 13 percent lower than the total enrollment the year before. And as of early 2017, effectuated enrollment stood at 200,401 people.

As of early 2018, effectuated enrollment in Tennessee’s exchange had increased to 209,499. Of those enrollees, 90 percent were receiving premium subsidies that averaged almost $791/month — far larger than the $520/month average premium subsidies across the whole country. Subsidies are based on the income of the enrollee and the average pre-subsidy cost of the plans. And states that have not expanded Medicaid also see higher average premium subsidies, since people with income between 100 and 138 percent of the poverty level receive substantial subsidies in those states (including Tennessee) instead of Medicaid. So the higher average premium subsidies in Tennessee are a result of larger overall average premiums, lower average income, and the state’s refusal to expand Medicaid.

Does TN have an Obamacare CO-OP?

The ACA included a provision to fund Consumer Oriented and Operated Plans (CO-OPs), and 22 states participated in the program, receiving a total of more than $2 billion in federal funding.

In Tennessee, Community Health Alliance Mutual Insurance Company received $73,306,700. The CO-Op had been one of Tennessee’s five exchange carriers in 2015, but in October 2015, the Tennessee Department of Commerce and Insurance announced that Community Health Alliance would discontinue operation at the end of the year.

Several CO-OPs closed at the end of 2015 — including Tennessee’s — due in large part to the fact that the federal government was only able to pay out a fraction of the money insurers were owed under the risk corridor program.

Medicaid/CHIP enrollment

The ACA called for Medicaid for all Tennessee residents with incomes up to 138 percent of poverty. In 2012 however, the Supreme Court ruled that states could opt out of Medicaid expansion, which Tennessee has done so far.

Tennessee is currently one of 19 states that have not expanded Medicaid (Virginia will expand coverage as of January 2019, and Maine is expected to expand Medicaid once Gov. LePage leaves office, as voters in Maine approved expansion in the 2017 election and LePage has been delaying the implementation). Because Tennessee has not expanded Medicaid, there are an estimated 163,000 impoverished residents in the coverage gap, with no access to financial assistance for their health coverage.

Exchange subsidies for private plans are not available for those who earn less than poverty level, and non-disabled childless adults are not eligible for Medicaid in Tennessee, regardless of income (although parents with dependent children can get Medicaid in Tennessee if their household income is up to 101 percent of poverty – a more generous threshold than many of the other non-expansion states use).

During the first open enrollment period, which ran Oct. 2013 through April 2014, 83,591 Tennessee residents were still able to enroll in Medicaid under the existing guidelines, and the state’s Medicaid enrollment grew 8.1 percent from fall 2013 to July 2014. From 2013 to April 2017, Tennessee’s Medicaid enrollment increased by 23 percent. But by July 2018, net enrollment growth had shrunk to just 10 percent (versus a net growth of 28 percent nationwide). Enrollment peaked at nearly 1.48 million in January 2018, and had declined to 1.33 million by August/September 2018. Medicaid enrollment runs year round.

Tennessee Medicare

As of August 2018, there were 1,317,781 people in Tennessee with Medicare coverage, which amounted to about 19.6 percent of the state’s total population. Nationwide, Medicare enrollees account for 18 percent of the population.

The state falls below the average for recipients eligible based on age alone – 80 percent vs. 84 percent. The remaining 20 percent of Tennessee Medicare enrollees qualify due to disability.

The state spends about $9,176 per Medicare recipient and, as of 2009, it ranked 13th in the nation when it comes to total spending.

Medicare Advantage plans are available in Tennessee for those who want additional benefits beyond what Original Medicare offers. In 2017, a total of 36 percent of Tennessee Medicare recipients selected a Medicare Advantage Plan, versus 33 percent nationwide. About 40 percent of all Tennessee Medicare beneficiaries enrolled in Medicare Part D, compared with an average of 44 percent enrolled in stand-alone prescription drug plans nationwide.

State-based health reform legislation

Tennessee’s legislature has been quite active in the arenas of healthcare and healthcare reform, but not all of their legislation has been beneficial to the state’s residents. They passed a law prohibiting the governor from implementing Medicaid expansion, and another that allows a new mother to be charged with criminal assault if she used narcotics while pregnant (critics point out that this can be discriminatory towards low-income women in areas where health care and addiction treatment isn’t readily available).

The legislature even tried to pass a law that would have banned schools from notifying parents about TennCare (Medicaid) and CHIP availability.

Several of the state’s lawmakers supported banning subsidies in states with HHS-run exchanges, which include Tennessee. However, as a result of the King v. Burwell ruling on June 25, 2015, subsidies are safe and legal in every state, regardless of how their exchange is run.

And in 2018, Tennessee enacted legislation that directs the state to seek federal approval for a Medicaid work requirement.

You can find a summary of recent state-level health reform bills at the bottom of this page.


Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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