News: Tennessee’s empty shelf problem appears to be fixed! Blue Cross of TN will sell coverage in Knoxville area.
— Sarah Kliff (@sarahkliff) May 9, 2017
My mental model of bare counties being covered by other in-state insurers that are looking to maximize the revenue from a local near monopoly is being tested in Iowa. It is being confirmed in Tennessee.
Humana pulled out of East Tennessee. Now Blue Cross and Blue Shield of Tennessee is moving into the counties that Humana abandoned.
Furthermore, this is an excellent test of my Silver Gap argument. BCBS-TN offered two Silver plans in each county it operates in Central Tennessee. It offered good deals to subsidized buyers because there is a wide spread between the benchmark Silver and the least expensive Silver. Humana only offered a single Silver plan in the Eastern Tennessee counties it is leaving. It offered expensive post-subsidy plans.
Perry County is one of a cluster of counties in Central Tennessee that has the biggest spread in the country. It is an extreme Silver gap at $97.62. There is a single carrier, Blue Cross and Blue Shield of Tennessee that offers two Silver plans. Roane County is the other extreme. A single carrier is also in the market, Humana. However Humana is offering only a single Silver plan which means the spread between the benchmark and the cheapest plan is zero. There is no chance of a good deal for a Silver below benchmark….
If that family of three is a pair of 50 years olds and a 10 year old, the Perry County family can earn up to $45,000 a year before they have to pay a dollar for their Silver plan. Bronze plans are zero dollar premiums for this family when they earn just north of $75,000.The same family in Roane County pays 7.2% of their monthly income for a Silver plan if they earn $45,000 a year. Their zero dollar Bronze plan ends once they earn more than $43,500.
From a risk pool perspective, Perry County should be extremely healthy. The subsidies are rich enough that almost everyone can afford a plan even if it is a minimal Bronze plan. Roane County will see good uptake among people who earn under 150% FPL and decent uptake to 200% FPL. Above those income levels, there will be significant adverse selection as the deals just aren’t too good for healthy people, so the population will be fairly sick and expensive.
I predict that BCBS will offer two Silver plans in these new counties for 2018. I predict that there will be a significant spread between these two plans. That spread will drive a much healthier risk pool in these counties compared to what Humana covers now because marginal, low cost buyers will be more likely to get in.
Update 1 My read on the BCBS Tennessee letter:
vhh
Good news for our friends here in Knoxville area who get insurance via ACA. Thanks for update.
Weaselone
This may be cold blooded, but what are the chances that insurers are just waiting for this individual in Iowa to die or move to someplace where s/he can get insurance and then plan on reentering the marketplace?
Alternately, why isn’t a single insurer entering this market place while planning on the down low to offer this individual plane tickets to anywhere in the US they don’t operate, moving expenses and a quarter million dollars in cash?
Villago Delenda Est
Totally OT, but Tweety is being Tweety again, and further solidifying his status on the tumbrel manifest.
hovercraft
@Villago Delenda Est:
Yes I caught that last night.
Yes I know I shouldn’t be watching, but there is very little on TV these days, and I wanted to see what the reaction to Yates testimony was among the villagers. General consensus, she ate their lunch and made them look like the ignorant morons they are. Secondly don’t ever be the defendant if she’s prosecuting!
Elmo
I’m sorry but I really can’t help it. It’s “East Tennessee,” never “Eastern.” Tennessee has three divisions that are actually represented on the state flag with stars: West TN, Middle TN, and East TN. I lived in Roane County for eight years and it’s one of the first and strongest lessons for an outsider – so much so that it makes me cringe to see it wrong.
Thanks. Carry on.
Weaselone
@Villago Delenda Est:
Yate’s and Clinton’s testimony before Senate Committees confirms an essential truth: Unless you’re a partisan Republican hack, in order obtain a position of power, a woman generally needs to be an order of magnitude smarter, more competent and harder working than a man does to reach the same position.
It also underscores that the fact that the morons who trip over the lowered bar to get into these positions will never learn this truth, nor will they ever miss an opportunity to embarrass themselves by trying to spring a trap on these women.
hovercraft
@Weaselone:
I had sort of the same take, those Senators and their staffs put those questions together in advance! They thought they had laid a bunch of traps for her, and they were going to get great soundbites that would make them look good! To me one of the morals is the fact that you sound smart in a room full of fellow republicans in your caucus meeting doesn’t mean shit.
See also Barrack Obama at Blair House with the republicans loaded for bear to dismantle his health care plan. Then again he’s black and we also have to be twice as smart and work twice as hard, but hey, at least we don’t have the white man’s burden!
Weaselone
@hovercraft:
I definitely agree. With Obama, they would repeatedly come equipped to handle Teddy Ruxpin only to be confronted by a grizzly with a constitutional law degree. it reflects their prejudices against women and minorities, but also the fact that Republican politicians have drunk their own Kool-Aid and relish the smell of their own flatulence. They’re no longer able to switch it off even to score political points, let alone serve the actual interests of the country.
HinTN
@Elmo: Yup, and there’s a right way and a wrong way to fly that flag.
? Martin
My mom is considering moving out of Iowa over the insurance development there. Her husband has a policy on the individual market and a very expensive pre-existing condition. It’s a rare genetic degenerative illness that will likely kill him in the next 5 years unless he has some surgeries done. There is also an experimental genetic treatment being done that is still in trials. If they lose coverage, it would be cheaper for them to move to a state like California that has a more robust insurance market and which would likely find a way to maintain the pre-existing condition mandate. If he lost his insurance coverage, they’d never be able to have those treatments done. They aren’t ER services. So this is life and death for them.
That’s not a good sign for Iowa that has a problem with population loss, particularly educated professionals.
FoxinSocks
My conservative friend needs health insurance and lives in rural Georgia (about an hour from Athens). He claims there are no doctors, none whatsoever, that will accept Obamacare where he lives. How can I help him get a list of doctors who will? Surely someone has to take it.
Florida Frog
@FoxinSocks: That doesn’t make sense. It doesn’t say Obamacare on your insurance card. It’s’ just a regular policy like anyone else’s. Is he saying that BCBS, Humana, etc have not any negotiated rates with docs near Athens? Something doesn’t seem right here.
Steeplejack (phone)
@FoxinSocks, @Florida Frog:
Yeah, this doesn’t pass the smell test. You don’t go looking for a doctor who “takes Obamacare.” Tell this person to go to healthcare.gov, create an account, enter his/her ZIP Code and then see what plans are available.
(You used to be able to browse plans without creating an account, but maybe now you can do that only during the enrollment period. Whatevs.)
Arclite
David,
BCBS is non profit. What’s their motivation to rake people over the coals for profit? Just to pad their reserve?
David Anderson
@Arclite: Non-profit is a tax filing status not a business model.
They will act in a way that covers their cost and distributes benefits to key stakeholders. The difference in a non-profit and a for profit is who those key stakeholders are. In a for profit, it is senior management and some/most shareholders. In a non-profit, it is senior management and hopefully elements of the community.
/cynical bastard hat off
Arclite
@David Anderson: I work for HMSA a BCBS affiliate in Hawaii. While it rankles me that the CEO makes over a million, overall it’s one of the most frugal places I’ve worked at. Salaries in the IT Dept are below average, and the kitchen s don’t even have complimentary coffee or tea. And the state of Hawaii must approve each rate increase. In addition, we have a comprehensive 5 year initiative called Mahie 2020 designed to improve health outcomes across the state, so any spare change we have goes towards that. Are a lot of Blues run differently in your experience?
Arclite
Also there’s no need to try and generate the 15% shareholders expect.