ACA health insurance rate increases highlight tensions

The rhetoric surrounding the recently approved increases in rates for the health insurance plans sold on the exchange in 2016 underscores the rising tensions over the cost of health insurance, and more broadly, health care.

The Tennessee Department of Commerce and Insurance approved a bevy of higher rates for the upcoming year on the federally run exchange. BlueCross BlueShield of Tennessee received its requested 36.3 percent average increase while Community Health Alliance, a cooperative out of Knoxville, had the highest average increase at 44.7 percent.

Even with the higher rates, which bring premiums among the five providers in the state to a more comparable level, some insurers may not be able to cover medical claims costs incurred from people enrolled on the exchange.

The tension at the state and national level points to a common desire from consumers, insurance companies and politicians for greater transparency about rate increases, said Michael Nugent, managing director with Navigant Center for Healthcare Research and Policy Analysis.

Remarks by TDCI Commissioner Julie Mix McPeak and President Barack Obama earlier in the summer underscore how insurance premiums will continue to be a flashpoint in the coming years as insurers navigate how to cover a new group of people who essentially for the first time have a choice about buying health insurance.

Obama said in July that after state regulatory review of the rates, his expectation was they would "come in significantly lower than what's being requested." The remarks were in stark contrast to a week earlier when McPeak testified to Congress that in some cases the rate requests might not be "sufficient" to cover the soaring costs of medical claims.

Backlash about the rates came from those who work to help people access health care as well as politicians.

Tatum Allsep, executive director of the Music Health Alliance, said it's "disheartening" to see rates continue to rise even as it seems little progress is being made to cap medical costs.

Rep. Diane Black, R-Tenn., said the rates were "proof positive that Obamacare is built on a grand deception."

Despite the impending increases, Tennesseans shopping on the exchange likely will still have some of the lowest-priced options in the country.

The state has had some of the lowest monthly premiums on the exchange since the outset — despite having one of the most chronically ill populations buying insurance on a federally-run exchange.

The average premium on the second-lowest silver plan in Tennessee in 2014 and 2015 were $281 and $321, respectively. Nationwide, the average was $346 and $374 for the same years, according to federal data.

McPeak said part of her job is to make sure the market stays competitive and that if insurers opt to leave the Tennessee market because of years of losses, then consumers will suffer.

For BCBST, the rates are a step toward covering the claims incurred from the exchange's plan holders although it helps the insurer get closer to a sustainable model.

"I've never met a consumer of health care or otherwise who wants to pay more than they have to," said Roy Vaughn, vice president of corporate communications. "At the same time we have to recognize this pricing is based on community ratings and has to reflect what we see across the entire group — and that’s why you’ve seen the increases."

Navigating the maturing exchange, according to Nugent, is "an opportunity" for consumers, politicians, insurers and state officials to address the underlying drivers of the increase.

"It’s sometimes easy to devolve into finger pointing as to why and how," said Nugent. "This is a (time to) get a better understanding as to what’s really driving these increase and how to manage them on a go-forward basis."

Reach Holly Fletcher at 615-259-8287 or on Twitter @hollyfletcher.

What health insurers received