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Tennessee health insurance

Five insurers offer 2019 individual-market health plans in Tennessee. Rates and subsidies have decreased for 2019.

Health insurance in Tennessee

Tennessee resistance to ACA’s reforms

State legislative efforts to preserve or strengthen provisions of the Affordable Care Act

Tennessee is among the states that have done the least to preserve the Affordable Care Act’s gains.

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.

In line with other states, open enrollment for 2019 coverage ended on December 15, 2018, and enrollment in 2020 plans won’t begin until November 1, 2019 (and will end on December 15, 2019). But enrollment is still possible for Tennessee residents who have qualifying events.

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 decreased 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.

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 — the state now has five insurers offering plans in the exchange — 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.

Tennessee’s health insurance marketplace

For 2019, Bright Health and Celtic joined the Tennessee exchange, and Oscar and Cigna expanded their coverage areas. And overall average premiums decreased by more than 12 percent. But enrollees who receive premium subsidies (90 percent of all on-exchange enrollees in the state) needed to pay close attention to how their after-subsidy rates were slated to change for 2019. The combination of new insurers in some areas and varying rate changes means that the average benchmark premium in Tennessee is 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 are smaller in Tennessee in 2019. And the reduction in subsidy amounts was 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 presented a better value.

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 had the bulk of the market share in Tennessee in 2018, both reduced their premiums for 2019. Oscar increased their average rates, but they only had about 14,000 members in 2018:

  • 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

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. In Tennessee, 268,867 people enrolled during the 2016 open enrollment period – though effectuated enrollment for 2016 ultimately ended up at 231,705.

The following year, 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. As of early 2017, effectuated enrollment stood at 200,401 people.

228,646 people enrolled in private plans for 2018 through the Tennessee exchange during open enrollment. That was slightly lower than the 234,125 people who had enrolled the year before, but open enrollment was only half as long for 2018, ending in mid-December instead of continuing through January as it had for 2017 coverage.

For 2019 coverage, 221,553 people enrolled in plans through the Tennessee exchange. That was the third year in a row with declining enrollment, which was common across many of the states that use

Read more about the Tennessee health insurance marketplace.

Medicaid/CHIP enrollment

Tennessee made headlines in 2019 with the passage of HB1280, which directs the state to seek federal permission to implement a block grant funding model for TennCare (the state’s Medicaid program), instead of the current open-ended federal matching funds. Governor Bill Lee is expected to sign the legislation, and the state will then have six months to submit an 1115 waiver proposal to CMS. Critics of the legislation note that block grants are likely to result in reduced Medicaid funding over time. No Democrats were included on the House committee that worked on the block grant legislation, and the legislature was fraught with tension over the issue.

On the other end of the spectrum, H.B.1094 would have allowed residents age 55 and older to buy into the TennCare system, H.B.1259 would have directed the state to seek federal permission to provide temporary Medicaid coverage to low-income residents with opioid addictions for the duration of their opioid treatment, and H.B.1092 would have allowed to governor to negotiate with CMS to establish terms for expanding Medicaid in Tennessee. But none of those bills made it out of committee.

The ACA called for Medicaid to be expanded to cover 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.

Because Tennessee has not expanded Medicaid, there are an estimated 113,000 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, 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 February 2019, net enrollment growth had shrunk to just 6 percent (versus a net growth of 26 percent nationwide). Enrollment peaked at nearly 1.48 million in January 2018, and had declined to 1.33 million by August/September 2018. But by April 2019, it had grown to nearly 1.4 million again. Medicaid enrollment runs year round.

Read more about Tennessee and Medicaid expansion.

Tennessee’s CO-OP closes

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 $73.3 million. The CO-OP was 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.

Read more about the Affordable Care Act’s CO-OP health plans.

Short-term health insurance in Tennessee

Tennessee does not have state legislation limiting the duration of short-term plans, so the state defaults to new federal rules. Those rules  allow short-term health insurance plans to have initial terms of up to 364 days, and total duration, including renewals, of up to 36 months.

Read more about short-term health insurance in Tennessee.

Did Obamacare help Tennessee?

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 at least 113,000 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.

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. Senators 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 is still in the Senate, although Corker retired and did not seek re-election in 2018. But his replacement, Marsha Blackburn, is strongly opposed to the ACA (prior to her election to the Senate, Blackburn was the Budget Chair in the House, and was thus responsible for shepherding the American Health Care Act (an attempt to repeal the ACA) through the House in 2017). The U.S. House now has just two Democratic representatives from Tennessee, and seven Republicans.

But former Governor Bill Haslam was 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 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.

Haslam was term-limited and could not run in 2018. His successor, Bill Lee, also a Republican, won by the election by a substantial margin.

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.

Tennessee Medicare

As of March 2019, there were 1,338,820 Tennessee residents with Medicare coverage. That’s a little more than 19 percent of the state’s total population, Nationwide, Medicare enrollees account for 18 percent of the population.

Tennessee beneficiaries who qualify by virtue of their age alone make up 80 percent of Tennessee Medicare recipients. The other 20 percent have Medicare coverage as the result of a disability.

In 2016, Original Medicare spent an average of $9,749 per beneficiary in Tennessee. For perspective, the national average that year was $9,533 per enrollee.

Medicare Advantage plans are available in Tennessee for those who want additional benefits beyond what Original Medicare offers. In 2018, a total of 37 percent of Tennessee Medicare recipients selected a Medicare Advantage Plan, versus 34 percent nationwide. About 39 percent of all Tennessee Medicare beneficiaries enrolled in Medicare Part D, compared with an average of 43 percent enrolled in stand-alone prescription drug plans nationwide.

Read more about Medicare coverage in Tennessee.

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.

In 2018, Tennessee enacted legislation that directs the state to seek federal approval for a Medicaid work requirement (the waiver proposal was pending federal approval as of mid-2019), and in 2019, the legislature passed (and the governor is expected to sign) legislation that directs the state to seek federal approval to transition the state’s federal Medicaid funding to a block-grant system.

Also in the 2019 session, Tennessee enacted H.B.655, which allows any healthcare professional to use barter agreements when treating uninsured patients.

And H.B.1342, which was also enacted in 2019, strengthens protections against surprise balance billing by requiring medical facilities to provide patients with written notification — at least three days in advance of a medical procedure — if they’ll be receiving services from an out-of-network provider at the facility. The state already requires facilities to provide these notifications to patients, but the legislation adds the provision that the disclosure be provided at least three days in advance. Out-of-network physicians who fail to provide the necessary disclosures will not be allowed to balance bill the patient.

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 Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.