Obamacare has created a lack of competition in the marketplace, leading major carriers to pull back. Just last year, Pinal County Arizona lost Aetna coverage, and now Humana is leaving Tennesee. Currently, almost 80,000 Tennesee residents are covered under Humana and about half of those are in the Knoxville area.
Humana is the last remaining carrier in the Knoxville exchange. That means that once they leave, Affordable Care Act coverage will simply not be available for the 16 counties in the greater Knoxville area. The rest of Tennesee will still have ACA coverage with Blue Cross Blue Shield and Cigna.
With Obamacare, carriers are required to provide coverage even for extremely sick enrollees, which is incredibly costly for them. Plus, all the uncertainty with Trump’s repeal leaves carriers unsure of what sorts of adjustments they may need to make in the coming months.
When providing coverage in a certain area is no longer cost-efficient and there is not a competitive advantage to stay, carriers can and will leave that geographic market entirely. Humana’s decision was entirely one of good business – they were legally required to insure far too many high-risk individuals in the Knoxville area for them to make reasonable profits. As much as insurers may try to be care-focused, everybody needs to make money.
As a response, Tenessee Senators Lamar Alexander and Bob Corker brought in a bill allowing people to purchase policies outside of the exchanges with their Obamacare subsidies without facing the uninsured penalty.
Without this, Knoxville residents would have to foot much more costly bills for private plans. Either that, or they would probably either move or opt to suffer the consequences of not having health insurance at all.
If another carrier enters the marketplace before the end of this year, the problem could be solved. Stay tuned.