Blue Cross Blue Shield of Tennessee announced Monday it would no longer offer plans in three of the state’s most heavily populated regions. The insurer posted an explanation on its website (along with a map):
We’re trying hard to make the Affordable Care Act (ACA) work in Tennessee and are offering plans in most of the state for 2017.
Because of many challenges, we have made the difficult but necessary decision to end coverage in three regions for 2017 – the Memphis, Nashville and Knoxville regions (shaded in orange below).
The Tennessean reports that, by dropping out of those three regions, BCBS will cut the number of Obamacare enrollees it insures by more than half:
The Chattanooga-based insurer, which was the only insurer that originally planned to sell statewide, expects to shed nearly 130,000 people from its rolls under the change and keep about 80,000 primarily in rural areas.
BCBS of Tennessee also has a FAQ which has some revealing statements about what motivated the decision. For instance:
Since the ACA passed in 2010, BlueCross has been working hard to make the law work for Tennesseans who need health coverage and care. By the end of 2016, we anticipate losses approaching $500 million on ACA plans.
There’s also a question about why BCBS isn’t using its reserves to cover losses rather than dropping out:
Our mission is providing peace of mind and access to quality health care for our members. To do that, we must remain financially strong. We can’t risk our reserves dropping below the legally required minimum.
Our reserves have dropped significantly since we began serving the ACA Marketplace, so now we must act to protect the financial security our more than 3 million members rely on.
There were hints that this decision might be coming. Last month Tennessee’s insurance commissioner said the state’s exchange was “very near collapse” and a spokesman for BCBS agreed with her assessment. The insurer’s spokesman said at the time, “Due to these concerns we are keeping all of our options open at this point about participating in the 2017 marketplace.”