2017 individual health insurance market enters new era

Tennessee's 2017 individual health insurance market offers new, and more narrow, options for shoppers. So far the path to coverage has been flush with plot twists for insurers, shoppers and health systems.

This time last year shoppers were getting ready to plow through another round of premium increases (as well as bigger subsidies), restructured networks and plans from an evolving cast of carriers.

But 2017 isn’t just a new chapter; it’s a new era marked by who’s in and who’s out of networks.

BlueCross BlueShield of Tennessee’s decision to back out of the Greater Nashville individual market — as well as Memphis and Knoxville — turned 2017 options upside down just over a month before open enrollment started Tuesday.

Insurer exits, including that of UnitedHealthcare, are bringing to surface a greater awareness that the individual market consists of more than the exchange, commonly called Obamacare.

The individual market also includes what are called off-exchange plans, which are bought either through brokers or directly from insurers and do not qualify for tax credits. They may not cover the basic benefits established under the Affordable Care Act either.

Since BCBST left the areas with the greatest exchange members, open enrollment is putting pressure on consumers to understand who and which facilities are covered in plans that may be specific to the local area.

Health systems

Nashville boasts three household name health systems: Saint Thomas Health, TriStar Health and Vanderbilt University Medical Center.

They were all covered in BCBST’s plush plans that are no longer for sale in Nashville. Yet, TriStar emerged as the system covered by Cigna and Humana in exchange plans, which tout a narrow network structure as a way to manage costs.

Facing the prospect of being left out of the exchange in its home market, Saint Thomas Health negotiated a last-minute agreement to be covered by Cigna.

TriStar’s approach — which is similar to parent HCA’s approach in other markets — to building a variety of facilities around the region make it an ideal partner for insurers looking to construct narrow networks, said Brian Tanquilut, an analyst with Jefferies. It has hospitals, freestanding emergency rooms, urgent care clinics and more nestled around the region, offering patients a multitude of ways to get care.

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“If you want to build a narrow network in Nashville, TriStar is probably the only way to go,” Tanquilut said. “No one has better access points or touchpoints than HCA right now. The TriStar brand carries a lot of weight here in Nashville.”

While there were concerns about transitioning from one health system to another for patients in the midst of complex treatment plans, TriStar is in a good place to absorb new Cigna and Humana enrollees, said Michelle La Vone Richardson, market analyst at Decision Resources Group.

Saint Thomas Health is a community staple, and TriStar’s primary competitor, according to a DRG report, so its exchange exclusion left a hole not only in access but gave TriStar an opportunity to gain a bigger market share.

Tanquilut said Nashville’s emergence as an individual market defined by narrow networks could affirm HCA’s strategy of pursuing a variety of access points in its top markets. It’s also a chance, Tanquilut said, for the health system to demonstrate it’s a logical partner for insurers looking to develop a narrow network with comprehensive access, which could be attractive to employers looking to trim costs in the future.

“Broadly speaking, I think this is a positive for HCA and, obviously, a validation of their strategy and their model,” Tanquilut said.

Insurers

BCBST has exited in metropolitan individual markets, leaving Cigna and Humana as the remaining insurers on the exchange. The two, however, have played a small role in the Tennessee exchange to date.

In areas where Cigna and Humana compete, shoppers could pick plans based on price or provider. Patient loyalty to providers or treatment centers could be a factor in enrollment this year, La Vone Richardson said.

People who want, or need, to keep VUMC will have to go off exchange with Aetna and Farm Bureau Health Plans that are not eligible for tax credits.

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Saint Thomas Health devotees can look to Cigna for tax credit subsidized plans as well as to Aetna, Farm and Freedom Life Insurance Co. for plans sold off exchange.

La Vone Richardson expects Cigna to enroll more new members than Humana in the Nashville market, in part because of the inclusion of Saint Thomas Health. Cigna also has more name recognition, she said.

Steep losses are pushing insurers out of the exchange in Tennessee, and around the country.

This year will be a test as to whether narrow networks can help Cigna and Humana stave off big losses for 2017, La Vone Richardson said. Both received average premium increases above 40 percent.

Shoppers

Networks are important, as Puja Kadolkar discovered. Kadolkar is expecting her second child around the start of the year and until Oct. 28 thought she’d either have to schedule a cesarean section before Jan. 1 or find a new hospital because her access to Saint Thomas Health would disappear when BCBST left the market.

The soon-to-be mom of two wrestled with a decision although she can now switch to a Cigna plan for continuity with Saint Thomas.

Her dilemma, however, will be a choice VUMC patients face.

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She could have opted to deliver at Saint Thomas and pay the full bill. Understanding and sticking with provider networks will be key to keeping costs down.

People who buy plans on the exchange could be hit with out-of-network bills that are often called “surprise bills” if they don’t dig into whether their providers are covered.

Cigna and Humana offer plans with networks local to the market. Cigna plans, for example, sold in Memphis will not have in-network access in Nashville.

This year, more than in recent years, health care is local, and people need to understand the networks and plan designs.

Reach Holly Fletcher at 615-259-8287 and on Twitter @hollyfletcher.

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Need help with health insurance? 

Get Covered Tennessee

Free, with resources in all 95 counties

• www.getcoveredtenn.org/
• 1-844-644-5443

Bernard Health

Paid service

• www.bernardhealth.com
• 1-800-505-0750

Tennessee Department of Commerce and Insurance

The agency, which is trying to help consumers understand the changes for the 2017 exchange, has presentations from each insurer selling on the exchange on its website, a primer video on YouTube and a phone line for questions.