Blue Cross Blue Shield of Tennessee will leave major Obamacare markets in the state because of steep financial losses, the latest insurer to pull back from the exchanges.
The insurer announced it would not offer Obamacare plans in 2017 in Memphis, Nashville and Knoxville. The company told the Tennessean newspaper that by the end of this year, it anticipates losses from three years of selling on the exchange will approach $500 million.
The insurer will leave 112,000 people searching for new coverage next year and keep about 80,000 people primarily in rural areas, the newspaper said.
The state’s insurance regulator earlier this year approved a 62 percent rate increase for Blue Cross Blue Shield. Insurers Cigna and Humana received approval for rate hikes of more than 40 percent.
Blue Cross Blue Shield isn’t the only insurer to have financial issues with the law. A recent study from the Commonwealth Fund found that two-thirds of insurers failed to turn any profits in 2014, the first year the Obamacare marketplaces went online.
Major insurers Aetna and UnitedHealth have announced they are pulling out of a majority of the Obamacare exchanges they offer plans in next year. The reason is mounting losses, which in UnitedHealth’s case are estimated to be about $600 million this year.
Humana is expected to leave about four states. However, Cigna is expected to expand in some markets.
The decision by Blue Cross Blue Shield drew a swift rebuke from House Republicans who have been vehement critics of the law.
“Tennesseans continue to bear the brunt of Obamacare’s failures,” said Rep. Diane Black, R-Tenn.
The administration responded that Obamacare will remain affordable for most people next year.
“All Tennesseans will have access to coverage next year, and thanks to financial assistance, most people will be able to select a plan for less than $75 per month,” said Health and Human Services spokeswoman Marjorie Connolly. “We look forward to Tennesseans coming to shop for plans that include free preventive care and no lifetime limits when open enrollment begins on November 1.”
? This article has been updated to include the statement from HHS.
