Tennessee Insurance Commissioner Warns Obamacare "Very Near Collapse"

Tyler Durden's picture

Last week we highlighted how insurers participating in Obamacare exchanges around the country were set to lose $2BN in 2016 prompting many to impose substantial 2017 rate hikes and/or withdraw from the exchanges altogether.  In fact, we also noted the chart below, from independent analyst Charles Gaba, who analyzed the rate hikes proposed for each of the 50 states.  Per the chart, Tennessee was specifically highlighted as a state expecting 2017 rates to rise an astonishing 59% in just 1 year.  


Today we have new reports from the commissioner of the Tennessee Department of Commerce and Insurance, Julie Mix McPeak, who is saying that the Obamacare exchange in her state is "very near collapse" as she struggles provide at least 1 insurance option in each Tennessee county.  Per 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," McPeak told The Tennessean. "I’m doing everything I can to prevent a situation where that turns to zero.”

Blue Cross Blue Shield (BCBS) is the only insurer that has provided statewide coverage in Tennessee over the past 3 years with other insurers electing to only participate in select counties.  According to BCBS, the insurer has lost a total of nearly $500mm over that time period, in Tennessee alone, which prompted their request for a 62% premium increase in 2017.  The problem for the insurance commissioner is that BCBS hasn't yet committed to providing insurance statewide, a decision they don't have to formally make until mid-September.  Given that BCBS is the only statewide provider, any decision to pull back coverage could result in people in certain Tennessee counties losing access to health insurance all together. 

Chattanooga-based BCBST, the only insurer that's sold statewide in the first three years of the federal exchange, is estimating that, by the end of 2016, it will have lost close to $500 million in three years. Such losses are unsustainable, said Roy Vaughn, chief communications officer of BCBST.


The insurer, which has previously underscored its support for the individual market, is still weighing what its presence in 2017 will look like. At this point in the process, the insurer only has to notify the state if it decides to make changes to where it will sell plans, McPeak said. It’s too late for another insurer to come onto the 2017 market.


“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.”

Governor Bill Haslam said that Tennessee had concerns about the Obamacare exchanges from the start noting that the federal government can't force insurers to cover people at a loss. 

“Ultimately, I think that’s where the federal government needs to come in and address the situation. They created the program and so they’re going to have to address that. They can’t make insurance companies cover people if it doesn’t pay off for insurance companies,” Haslam said. “Those of us who had some structural questions about the Affordable Care Act said OK, we’ve set this up, now you need to come up with an answer for this if we’re not going to have anybody that covers the exchange.”

When questioned about the seemingly failing exchanges in Tennessee, a representative from the Department of Health and Human Services noted that people receiving subsidies in Tennessee will only see their insurance premiums increase $2 in 2017 to $104 per month.  While that may be true, it says absolutely nothing about the overwhelming majority of people who don't receive subsidies and are facing a 59% increase in their costs YoY. 

“Consumers in Tennessee will continue to have affordable coverage options in 2017. Last year, the average monthly premium for people with Marketplace coverage getting tax credits increased just $2, from $102 to $104 per month, despite headlines suggesting double digit increases,” said Marjorie Connolly, HHS spokeswoman, in a statement.

We're unsure whether to take Connolly's comment as just another piece of propaganda intended to defend a failing piece of legislation or an intentional, blatant admission that the Department of Health and Human Services simply doesn't care about the majority of Americans, the so-called 1%'ers, who are facing debilitating increases in healthcare costs.  We'll let you decide on that one. 

Meanwhile, Kevin Walters of the Tennessee Department of Commerce and Insurance echoed our concerns:

"Our team has answered hundreds of phone calls and e-mails from concerned policyholders upset about premium increases and whether they can afford another jump," TDCI spokesman Kevin Walters said. "A 45-year old Nashville resident will face premiums ranging from $500 to over $600 a month, depending on the carrier.  To focus on the 'majority' receiving subsidies speaks nothing to those who receive no such assistance and, instead, face $500-plus premiums. While some consumers may switch plans, rising prices are faced by all."

In the end, the administration can only keep its head in the sand about Obamacare for so long.  The fact is that exchanges across the country are on the verge of collapse.  They're stuck in a negative feedback loop where healthy people are refusing to sign up, which leads to losses for insurers, which leads to higher rates, which, of course, leads to even fewer healthy people signing up.

As we've said before, "if Obamacare enrollments continue their current trend and insurers continue to hike premiums at alarming rates then Republicans may not have to worry about "repealing and replacing Obamacare" as it might just work itself out "naturally"."

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heisenberg991's picture

Obama 2016 who is with me

knukles's picture

My Progressive friends, when asked many years ago before the ACA was passed if they wanted everybody covered, why not just give them a Medicare card?
The Progressives said because Medicare is broken and can't be fixed, but we'll get it right this time.
Honest to God

Now they're saying this is what "you" get when "you" let corporations write the laws.

Never a dull moment.

Pure Evil's picture

Why should Obummer care?

He's a gone pecan in a less than five months.

RAT005's picture

All of this noise about ObamaCare is just about the promise to provide healthcare via an insurance contract.  The next phase ready to blow is that even people that are overcharged for empty insurance promises don't get the care they bargained for.


So in a way, most people are better off without coverage that implies actual cash settlement for care, vs. a paid for contract that doesn't provide care and puts lack of care in the hands of some uninterested paper pusher.

Son of Loki's picture

One problem they have is if you can't sign up for Obamacare, there is NO other choice since health insurance comapnies cannot enroll people who qualify for Obamacare even if it's not offered where they live.


It's called, "Phuck You America."


Pelosi, Reed and Sowetteo O'Bama

BuddyEffed's picture

With true growth gone, and true profit challenged as a result, health insurance and medical care also become structurally challenged.

Those medical costs are now competing for the same monies that could be used to help the underfunded parts of pension plans.

Archibald Buttle's picture

if i only lived one county south, i would have no options next year. i would save a bunch of money, and maybe even negotiate a raise for the first time in years, by saving my employer their half of the insurance payment. win for everyone involved besides the .gov and the healthcare parasites. the one thing nobody talks about is how obamacare was supposed to "free people to get a new job" since they wouldn't have to wait for a better opportunity that also offered similar insurance. i bet i am one of many who now feels trapped where i'm at because to try to change anything will only result in higher prices one way or another. i would love to get a good deal on catastrophic insurance, but that sounds like it's not up to Obushma standards, and only ok as a supplement.

John_Coltrane's picture

The only way to ensure you actually will have available care from an competent doctor and support staff is to pay directly out of pocket for conceirge care.  You pay the doctor a fixed cash payment each month regardless of how little or much care you require.  These practices have their own labs and diagnostic facilities including state of the art imaging.  You will pay a fraction of the cost of an insurance plan.  All the best doctors are "retiring" and migrating to these private practices.  You will also have referral access to the best specialists who also do not accept any insurance.  Both you and the doctor do well by ensuring you don't need any medical care and stay healthy.  Insurance reinbursed docs profit by the maximum of procedures and tests, whether you need them or not. 

this is the wave of the future-medicine as it used to be practiced pre-1960.  Insurance is a scam.  Pay directly to the people who provide the service.

Archibald Buttle's picture

is this compatible with the ACA? this is exactly what i want, especially if i could negotiate a rate that says something to the effect that "i am an adult and won't come in for every single boo-boo i suffer, only when its something i can't fix myself." might not get the fanciest cancer treatment for free, but would most likely get an honest conversation about how to spend my final days rather than that whole preach hope to the family bullshit you get nowadays while they bleed everybody dry. the only death panels the ACA has are the ones that are death by many cuts panels. reminds me of the monty python sketch where "and in the most extreme cases, we can even provide a complete cashectomy- that is, a total removal of all monies from the patient."

nmewn's picture

Progs, I swear, ok, so where are they now...rioting in the streets? Hell no, slunk back under their fucking rocks.

BeerMe's picture

Nah.  They are saying, "We'll get it right this time.  Or...  We didn't go far enough.  We must get single payer."

nmewn's picture

Just because some fucking "Progressive" thought they would be a "useful idiot" and junk my first...lol.

One thing about crony-socialists my man...they always find enough useful idiots to back their schemes while they pocket the cash...by "rule of law".

Ladies & gentlemen meet, Heather Bresch, the CEO of Mylan pharma (maker of the EpiPen) and daughter of...Senator Manchin.


The article speaks for itself but I'd like to point out some hi-low lights...

"Congressional lawmakers are locking horns with generic drug giant Mylan  MYL -5.41%  over the company’s price hike for the EpiPen, a flagship device used to counteract deadly allergies whose price has exploded more than 400% since 2008."

Gosh, I wonder what big national debate was just beginning in 2008..."healthcare"...perhaps?


"The EpiPen has a virtual lock on the U.S. market with about a 90% share in the space and few legitimate competitors to speak of. Its position in the food allergy business has given Mylan, a global pharmaceutical with about a $25 billion market cap, wide leeway to raise prices however it wants to—especially since customers have severely limited alternate options and must refill their two-pack injector supplies every year."

So, kind of a captive audience then...well, now that you've got em up against the wall, why not just add insult to injury?

"That’s not even the worst part. After they hiked that price 400%, the CEO Heather Bresch and all the executives, they all got 600% pay raises."


Because...they...really REALLY...cairrrr ;-)

Parrotile's picture

Our "Epi-Pens" are 1 x 1ml Adrenline 1 in 1000 ($4), an Alco-Wipe (1 cent) and a 1ml disposable syringe (11 cents), housed in an old Glucagon Hypokit container.


The ampouled Adrenaline has a nice long THREE year shelf life too . . .:-)

Archibald Buttle's picture

it would be interesting to find out how many board members and/or investors mylan shares with monsanto. and health insurance companies. oh yeah, and other stuff like dow or bayer.

Government needs you to pay taxes's picture

This is setting the stage for the Dims to try to kill the healthcare insurance industry.  Gonna be some hellagood litigation as Aetna, Cigna, BCBS, etc. fight for their survival . . . unless the healthcare insurers get folded into larger insurance entities (not currently possible given the mandatory state-by-state healthcare insurance marketplace).

The Gun Is Good's picture

Something YUUUGE possible, like Fannie May / Freddie Mac for mandated health insurance? Or just single payer? (Should be interesting....)

Pabloallen's picture

A lot more than obummercare...... hopefully soon !!!!!!!!

Philo Beddoe's picture

If more government involvement does not work try more. 

Archibald Buttle's picture

you're on the right track...i just don't get the feeling that you are thinking "big enough." MOAR!!!!!

max2205's picture

8k for the right to questionable health care with 10 k deductible? 


No thanks....I might pay the fine....Fuck you Barry 

RAT005's picture

You don't have to pay the fine.  There is no enforcement method.  You will get a letter that says you didn't pay so here's your fine.  That will be the last you hear from them.

Urban Redneck's picture

1 provider option in a county is not a choice.

Why hasn't anyone sued for exemption relief on that basis?

There is no need for anyone withstanding to wait until there are no providers in one's county of residence.

Archibald Buttle's picture

prolly because our masters dont live in counties with only one option. or need to rely on exchanges for that matter.

those that care lack "standing" to bring a case in the first place. to translate into the common tongue, "you lack the financial wherewithal to press your case in court. therefore, the court rules against you."

dchang0's picture

Perfect timing--I'm right on the edge of canceling my coverage because it doubled in price since Obamacare went into effect.

Hopefully this monstrosity crashes suddenly so that the politicans scramble to tear it apart rather than ram through single payer.

nightshiftsucks's picture

As planned,they probably think people are going to beg them to do anything to fix it,I think they're going to hang them.

knukles's picture

PS  Don't forget that for the first 2 or 3 years, was it, that any underwriting losses would be reimbursed by the Federal Government.
And now, what's up with them 3 years?

Come on ...   Whazzzup!

Pure Evil's picture

They had to pay off the Iranians with all that ransom money.

Plus, you've got endless welfare recipients crossing the southern border along with rapefugees pouring in from Syria.

Too bad Obummer didn't have another four years he could finally collapse the racist and oppressive white privileged monstrosity formally known as the U. S. of A.

Sadly, he won't be able to put up the Mission Accomplished banner on his way out the White House door, unless of course The Hildabeast gets elected.

Billy the Poet's picture

Just wait. You''l have to take hostages too if you want what Uncle Sam owes you.

Archibald Buttle's picture

i got dibs on dick cheney. i think he will outlast even soros. uncle sam don't owe me much. but i want to make that fucker pay up, no matter what. two lawnmowings a year for life ought to do. once i'm dead, you can have your cheney back. if i can hold out for a while, he may be really jonesing for that new body to inhabit to fool the next bunch of bagholders.

grunk's picture

Go underground.

One-Eyed-Thong's picture
One-Eyed-Thong (not verified) Aug 24, 2016 5:27 PM

stupid IRS wanted to charge me $900 a month for obamacares, and I'm not even sick

so i dropped my "doctor" and now i self medicate


$900 a month can buy you a lot of weed and vodka (thanks obama)

Government needs you to pay taxes's picture

Obama's got the best Hopium, too!

OutaTime43's picture

Yep.. time to get rid of these for profit jackals who send 20 cents of every premium dollar to their shareholders.   Aetna is just pissed off because the US government called "anti Trust" on their Humana takeover.  Poor Aetna .. .making only $2.50 per share profit last quarter.  Boo fucking Hoo!


Government needs you to pay taxes's picture

What SHOULD reasonably happen is that all the subsidized policies should be underwritten by US .gov and paid for thru some fiat conjuring.  That would kill 2 birds with 1 stone, fight deflation AND cure sickness is all lower socio-economic Murrican households.

Captain Chlamydia's picture

Medication costs too much. Doctors make too much money. Insurance costs too much. Medical Law suits end up in enormous medical damage costs as a compensation. Milions of dollars are rewarded to the victims. Doctors pay 1 million dollar per year for their insurance. All and more of these issues must be adressed first. 

Biffkenson's picture

I have a $6,250 deductible on my plan which cost around $800 a month.  It's like I have no plan at all because of the deductible.  $800 out the window every month.

Next year United will leave my State leaving BSBC as the only insurer - meaning any rate increase they ask for is going to have to be approved or BCBS will bolt leaving no plans.   

VegasBob's picture

I'm in the same boat (United Healthcare), except I have a terminal cancer diagnosis.  My 2016 out of pocket medical expenses including the monthly health insurance premium will be $12,000-$15,000.  Still, the insurance company will be losing its ass on my coverage.

If I live to late summer 2017, I'll be 65 and go on Medicare, but I'm going to have to pony up probably $1,000 a month for health insurance for the first 7 months of 2017, plus another $7,000-$10,000 in deductibles and co-pays.

Getting sick is a real bitch in 21st century Amerika.  God help this country if the voters are stupid enough to elect that lying cunt Hillary Clinton as president.

Pure Evil's picture

If you're interested, look into some of the research these two gents have done in relation to cancer.



One of his articles on cancer: https://www.lewrockwell.com/2016/07/joseph-mercola/fuels-cancer-growth/



One of his articles on cancer: https://www.lewrockwell.com/2016/06/bill-sardi/cant-afford-cure-cancer/


Mercola has by far the most articles but they both offer alternative information about cancer the modern health care industry won't tell you.

VegasBob's picture

I do agree with their approaches. Unfortunately, for me it is just too late - my cancer is Esophageal Stage IV and I can no longer eat solid foods.

Christophe2's picture

Check out Rick Simpson Oil.

ScalarX's picture

Absolutely agree w/ the Rick Simpson Oil.

And check out Dr. Thomas Lodi, he has videos on youtub.

He mostly tries to sell books but I feel his treatments which concentrate on vegetable juicing on the daily are spot-on.

BeerMe's picture

If you can try to get some daily walking in.

Colonel Klink's picture

Not ready for prime time, but it should be!

SantaClaws's picture

If there were any fairness they would waive the premiums and costs or the govt would fully subsidize your care.  Keep up the fight; you're in our thoughts.

TN Jed's picture

Joke's on them, I saved $6k this year by not being able to afford the premiums now.

whatamaroon's picture

I saved $13,000, and only paid my accountant $250 to say yes I have insurance

CHoward's picture

The government is stupid as we all know.  They, in their infinite wisdom, equate having medical insurance with having medical care.  TWO vastly different things.  You can have medical insurance with an exorbitant deductible (if you can afford it) but can you afford to pay your deductible first before being seen by a doctor for a medical emergency.  See my point?  You have coverage but you can't afford the care! 

Tachyon5321's picture

The insurance companies should be force to stay in Obamacare until they file for Chapter 13 and close their doors for good. These mothers help write this cr@p and like any good captain they should go down with the ship they designed.