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Knoxville, TN Could Be Ground Zero For The Obamacare Explosion

For the 40,000 people living in and around Knoxville, TN, Humana was the only insurance company providing healthcare coverage for the 2017 plan year.  That said, even with their monopoly in the market, Humana still couldn't figure out a way to make money on the Obamacare exchanges in the 16 Tennessee counties where it was the sole insurer.  As such, the company has decided to cancel its coverage in 2018 potentially leaving Knoxville's 40,000 residents with no healthcare options at all.

Per the map below from the Milwaukee Journal Sentinel, while most of Tennessee is covered by Blue Cross and Cigna, the 16 counties surrounding Knoxville in the eastern portion of the state will have to find a new insurer to fill in for Humana by July 1st or residents there simply won't have access to healthcare for the 2018 plan year. 

 

And while Blue Cross and Cigna could theoretically expand their coverage map in Tennessee to pick up Humana's former markets, Insuance Commissioner Julie McPeak said she's "not optimistic" that would happen absent "some changes to the regulatory system, either by Congress or the administration."  Which, of course, sets up Knoxville as 'ground zero' for the 'Obamacare explosion' predicted by Trump.  

Tennessee Insurance Commissioner Julie McPeak said she has had many "challenging conversations" with the state's two remaining insurers -- BlueCross BlueShield of Tennessee and Cigna -- about covering the Knoxville market next year. The carriers, however, want more flexibility to limit their exposure to sick, costly enrollees, she said. For instance, they are concerned that Obamacare eliminated their ability to cap their lifetime payouts to their policyholders.

 

"I'm not optimistic that one of our existing insurers would like to expand their coverage area without some changes to the regulatory system, either by Congress or the administration," said McPeak, who has criticized Obamacare.

 

Insurers have until July 1 to file their 2018 plans in Tennessee, but they'll likely make their decision in the next month or two. Cigna said its participation depends on market conditions and regulatory approval of its policies. BlueCross BlueShield said it is still reviewing its options.

 

"The current uncertainty makes it difficult to assess what our product offerings for 2018 might be," said Roy Vaughn, a senior vice president at the insurer, which has lost more than $400 million on the exchange over the past three years. "All options are on the table for 2018."

Meanwhile, as we pointed out last summer, Humana was apparently still unable to make money in TN despite a 59% increase in premiums for the 2017 plan year... so one can only imagine how much higher rates will have to go in 2018 (data source:  Charles Gaba).

 

In the end, as we've noted before, the Obamacare exchanges around the country are stuck in a negative feedback loop where healthy people are refusing to sign up, which leads to losses for insurers, which leads to higher rates, which, of course, leads to even fewer healthy people signing up. 

In conclusion, it appears that Trump was right yet again:

Source
Health
Tennessee