Obamacare’s Most Troubled Market Just Got Saved by Blue Cross Blue Shield

He’ll probably keep calling it a disaster anyway.

Carlos Barria/Reuters

First, the good news.

As of today, residents of Tennessee no longer have to worry about whether they will be able to buy health coverage next year through Obamacare’s insurance marketplace. The state’s Blue Cross Blue Shield affiliate announced it would sell plans in the Knoxville area, which had been left without a carrier for 2018 after Humana said in January that it would abandon the state exchange.

The possibility that residents in 16 different counties would lack an insurer had turned Tennessee into the go-to example for Republicans who wanted to argue that the Affordable Care Act was in the midst of collapse and a cautionary tale for liberals about how intransigent states could undermine the health law. Vox’s Sarah Kliff published a typically excellent dispatch that sorted through the state’s problems earlier this month, which I highly recommend—but the short version is that insurers were never able to sign up enough healthy, profitable customers in the Tennessee’s rural and woodsy eastern reaches to create a stable market. In part this was because federal and state lawmakers made it easy for people who wanted cheap coverage to avoid the exchanges, either by letting them hold onto grandfathered pre-Obamacare coverage, or through special plans sold through the farm bureaus. That left the local ACA market dominated by a thin population of older, sicker customers.

For now, at least, the state has avoided an outright crisis.

There’s plenty to worry about going forward, however. First Blue Cross Blue Shield suggested that it will have to ask for another big rate hike this year in order to “price in the downside risks” that the Trump administration will cut off essential subsidies, as it has threatened to do, or laxly enforce the individual mandate. The carrier also says it’s worried about Obamacare’s tax on insurers, though that seems less unpredictable (unless Congress kills it as part of repeal). More broadly, the insurer, which is a nonprofit, wants regulators to know that its decision to sell plans in Knoxville isn’t a vote of confidence in the exchanges overall. “In fact, we can’t justify doing so based solely on current political uncertainty, but instead we believe it is an extension of our mission to serve our fellow Tennesseans, especially those who do not have other options for coverage,” it writes.

Trump’s unpredictability may make insurance more expensive in states beyond Tennessee, too. Carriers serving Maryland, D.C., and Virginia as well as Connecticut have asked for large rate increases going into next year, citing both the unexpectedly high cost of insuring their customers and uncertainty over the fate of the individual mandate. The president may claim Obamacare is failing, but his administration’s rhetoric is causing some of its tremors.

Anyway, at least Tennesseans will have coverage available. That just leaves us with Iowa to worry about now.