Tennessee’s insurance commissioner says the Obamacare marketplace in her state is “very near collapse.” From the Tennessean:

“I would characterize the exchange market in Tennessee as very near collapse … and that all of our efforts are really focused on making sure we have as many writers in the areas as possible, knowing that might be one. I’m doing everything I can to prevent a situation where that turns to zero,” [Insurance Commissioner Julie Mix] McPeak said to The Tennessean.

As the NY Times pointed out last weekend, the pullback of big insurers like UnitedHealth and Humana has left five states with only one insurance provider on the exchange. In all, 17% of Americans buying plans on the exchange will have no choice of insurer next year. And there is still a possibility things could get worse.

As the Tennessean reports, a spokesman for Blue Cross Blue Shield, the only insurer selling statewide in Tennessee, agreed with the insurance commissioners assessment of the Obamacare marketplace. With losses at an unsustainable level, BCBS is keeping its options open for next year:

The Chattanooga-based insurer is estimating that by the end of 2016 it will have lost close to $500 million on the exchange in three years, which is unsustainable, said Roy Vaughn, chief communications officer of BCBST…

“We agree with the assessment of the ACA marketplace in Tennessee. We appreciate the support of our request to close the gap between our rates and medical expenses for ACA marketplace plans. Beyond rates as we’ve discussed with the (TDCI) we continue to have concerns about uncertainty with the ACA at the federal level,” Vaughn said to The Tennessean. “Due to these concerns we are keeping all of our options open at this point about participating in the 2017 marketplace. We anticipate making a final decision in mid-September.”

This is significant because the Blue Cross Blue Shield insurers have been the stalwarts of the Obamacare marketplace, but we’ve seen signs they are beginning to crack. In June BCBS of Minnesota announced it was leaving the exchange after $500 million in losses. And earlier the same month a spokesman for BCBS of Louisiana said “The way the law was designed and is now being administered simply does not work.”

The pressure to keep insurers selling on the exchange led the Tennessee insurance commissioner to approve some very high premium increases for next year. BCBS asked for and received a 62% increase. Cigna received a 46.3% increase.

Of course most consumers won’t see the big increases next year thanks to government subsidies. However the skyrocketing rates will make the policies even less appealing to those who are receiving only partial or no subsidies. Here’s how insurance industry expert Bob Laszewski described the situation on his blog Sunday:

With their backs against the wall, Blues plans might exit. They might also just keep raising the rates by large amounts knowing that the subsidized Obamacare subscribers will have these giant excess premiums paid by taxpayers no matter how big they are, while at the same time driving the millions of people that don’t get subsidies out of the market with exploding rates. A really bad outcome either way.

Obamacare won’t collapse so long as the government keeps paying those subsidies but the program clearly isn’t stabilizing as expected.