As Obamacare continues to face numerous setbacks, Tennessee's insurance commissioner declared on Tuesday that its exchange was "very near collapse" after she approved several large premium hikes to keep it in business.
"I would characterize the exchange market…as very near collapse," Julie Mix McPeak said, according to the Tennessean. "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. I'm doing everything I can to prevent a situation where that turns to zero."
The increases—which include numbers as high as 62 percent for Blue Cross Blue Shield—come at a troubled time for local insurers. BCBS, Tennessee's only statewide insurer, estimates that it will lose almost $500 million over a 3-year period by the end of 2016. Furthermore, Cigna and Humana may either shrink or pull out entirely depending on the market next year. McPeak's move is thus meant to ensure every firm's coverage area and solvency before open enrollment begins in November.
This also reflects other recent trends in the United States. An analysis from the McKinsey Center for U.S. Health System Reform shows that much of America will only have one or two carriers for Obamacare customers by 2017. One county in Arizona will have no marketplace insurers at all. And other states like Illinois, Kentucky, and Oregon have approved substantial increases under their exchanges as well.
Supporters of the law, however, were slightly more optimistic.
Walter Davis, executive director of the Tennessee Health Care Campaign, told the Tennessean that "the sky is not falling and with a little reflection, we expect the Commissioner will agree. The Affordable Care Marketplace in Tennessee will have insurance providers in every county. Even when there is only one company, there will be various plans to choose from."
Marjorie Connolly, a spokeswoman for the Department of Health and Human Services, also told the paper: "Consumers in Tennessee will continue to have affordable coverage options in 2017. Last year, the average monthly premium for people with Marketplace coverage getting tax credits increased just $2, from $102 to $104 per month." The White House later released a similar statement pertaining to the entire nation on Wednesday.
Between the rising prices and the worried calls from unsubsidized policyholders, though, officials remain on edge.
Noting that having more than half of the state under one insurer was "not a success," McPeak went on to tell say that the situation "was not all that reassuring to me because I need writers in the market today. I don't need movement in and out of the marketplace … [we need to] keep competition in the exchange."