Three surprises from open enrollment
Open enrollment ends tomorrow, Jan. 31
The fourth open enrollment period for health coverage under the Affordable Care Act is wrapping up this week, and it has certainly been an eventful one. The Tennessee insurance market was reshaped as carriers pulled out of the exchanges and offered new products, and the election of Donald Trump as president has put the entire healthcare industry into a state of uncertainty.
As open enrollment draws to a close, let’s look back at three of the biggest surprises that shaped the Tennessee insurance market in the past few months.
Saint Thomas and Cigna come to terms
BlueCross BlueShield of Tennessee’s decision to pull out of the individual market, on- and off-exchange, in the Nashville, Knoxville and Memphis regions had wide-ranging implications. Patients and providers alike were affected — particularly Saint Thomas Health.
Saint Thomas was the only provider system in-network for BlueCross individual plans, and wasn’t in-network for any other exchange plan.
When BlueCross made their announcement, the system had to act fast. If Saint Thomas wasn’t able to get into another carrier’s exchange network, it would lose out on most of Nashville’s non-group patients. Not to mention, all of its existing patients who had BlueCross would no longer be in-network, meaning they would likely have had to switch doctors.
Fortunately, and somewhat at the last hour, Saint Thomas got in-network with Cigna. This was a little unexpected, as Cigna had exclusive contracting with TriStar Health. Like BlueCross and Saint Thomas, TriStar was the only health system in-network with Cigna. Many in Nashville thought TriStar would influence these negotiations and keep Cigna from contracting with Saint Thomas. Fortunately that did not happen and exchange patients in 2017 can continue to receive care at Saint Thomas facilities.
Small employers came out of the woodwork
Another unexpected consequence of the BlueCross decision was the emergence of many small employers into the group health insurance market. Employers with less than 50 full-time employees are not required by the ACA to offer health coverage, and many in Nashville didn’t.
But with the departures of both UnitedHealthcare, which announced plans to pull out of ACA exchanges well in advance of open enrollment, and BlueCross, employers reconsidered.
Many of these employers had previously used the individual market and had their employees do the same. But with limited individual choices in the Nashville area, the group market began to look more attractive.
As a result, there were an unprecedented number of small group plans created with effective dates of Jan. 1, 2017, causing big delays at what is already a very busy time of year for the industry.
Farm Bureau gains prominence
As average premium prices rose across the country for marketplace plans, demand rose for cheaper alternatives. One option for consumers looking to save some money were plans not in compliance with the ACA, often called “traditional” plans.
Farm Bureau Health Plans, a local carrier selling such options, told The Tennessean applications hit 3,000 by mid-December, up from just 300 the year prior. Consumers who don’t have a compliant plan do have to pay the ACA tax penalty for lacking insurance, but in certain cases, this can still be cheaper than buying a compliant plan.
The carrier was even mentioned in the national magazine Modern Healthcare, which suggested the company’s noncompliant plans might foreshadow the type of insurance consumers could expect if the ACA is repealed.
However, that article also pointed out that the reason Farm Bureau can offer such cheap plans is that it subjects applicants to medical underwriting, meaning it can deny people with pre-existing conditions. This is prohibited by the ACA, but because Farm Bureau Health Plans is defined as a rural health program, the organization is not subject to the ACA regulations.
These three surprises demonstrate just how quickly the health insurance market can shift. As Congress works on reforming or replacing the ACA, the market will continue to reshape in response to new policies and products.
That said, at the time of this writing, the ACA is still the law of the land for 2017. This means consumers without workplace coverage who still need a health plan for 2017 only have until Jan. 31 to sign up on the marketplace. Consumers who miss the deadline will have to either choose a non-compliant plan or experience a qualifying event allowing special enrollment, like having a baby or getting married.
So be sure to pick your plan by Tuesday, and keep reading for updates on what comes next.
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