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VOL. 41 | NO. 11 | Friday, March 17, 2017

Knoxville area is hardest hit by Humana pullout

By Mike Blackerby

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And now there are none. Insurance giant Humana announced recently that it is pulling out of the Affordable Care Act exchange in the Knoxville area at the end of the year.

Humana was the last insurance company standing in the Knoxville exchange, meaning, those seeking policies through the ACA in a 12-county area in east Tennessee could be left in the lurch.

Walter Davis, executive director of the Tennessee Health Care Campaign, says 40,000 people in the Knoxville area – and perhaps more than 100,000 statewide – could be shut out of insurance options because of Humana’s decision.

“The single, key area this will affect the most is the Knoxville area,” Davis says.

The company also is pulling out of the Nashville and Memphis exchanges and will no longer be selling private insurance to individuals in these areas beginning Jan. 1, 2018.

Davis says the hot-button health care issue is a ticking time bomb as politicians continue to debate the merits of replacing Obamacare with President Donald Trump’s version of a Republican-backed national health care plan.

Davis says Humana’s decision to leave the exchange in the major metropolitan areas in the state underscores the urgency of the situation.

He adds the health care of citizens in the state is hanging in the balance.

Almost 231,000 people bought insurance through one of the Obamacare insurance exchanges last year in Tennessee.

“They’ve got to do something soon, and I mean by the end of the summer,” says Davis, whose organization is a nonprofit consumer health care advisory group working for health care justice in Tennessee.

Davis says that Humana’s bail-out leaves a significant portion of consumers with limited options that could include shopping elsewhere for pricey insurance policies outside of ACA exchanges.

“We’ve got to find an interim solution,” he declares. “We don’t have a plan covering a significant portion of the state.”

The list of providers dwindles

The ACA was signed into law to reform the health care industry by then-President Barack Obama on March 23, 2010, and upheld by the Supreme Court on June 28, 2012.

Its plan was to give more Americans access to affordable, quality health insurance and curb the rate of health care spending in the United States.

On Oct. 1, 2013, the state-run health-insurance exchanges opened to the public. In theory, consumers could shop among a handful of insurance providers for the policy that was best-suited for their needs.

Consumers once had multiple insurance providers from which to choose. Now, they’ve all come and gone, mostly because they couldn’t make enough of a profit, according to many industry observers.

United Healthcare, Cigna, Assurance, Community Health Alliance and Chattanooga-based BlueCross BlueShield have all exited the Knoxville exchange.

BlueCross acknowledged losing $500 million during its last three years of participation in the exchange. It also cited uncertainty in the marketplace as a factor in leaving the exchange.

“BlueCross left 110,000 people in the markets when they left,” Davis explains.

Now, Humana will follow suit in 2018 and withdraw from the exchange.

“Based on Humana’s initial analysis of data associated with the company’s health care exchange membership following the 2017 open enrollment period, the company is seeing further signs of an unbalanced risk pool and has decided that it cannot continue to offer this coverage for 2018,” says Kate Marx, Humana spokesperson.

“Through the remainder of 2017, we remain committed to serving our current medical policy members in Knoxville, Nashville and Memphis. We are working closely with the Tennessee Department of Insurance to navigate this process.”

Obamacare vs. Trumpcare

Tennessee politicians and lawmakers are front and center in the contentious national debate over repairing or jettisoning the ACA in favor of the Republican-backed American Health Care Act.

Matthew Harris, a University of Tennessee economics professor who describes himself as “neutral” on the national health care debate, says policy makers should tread cautiously before pulling the plug entirely on Obamacare.

“The ACA generates a lot of baby and a lot of bath water,” says Harris, speaking metaphorically. “Every time you have reform, you have people who are better off and worse off, by nature.

“To throw it all out would be rash. While it certainly needs adjusting, updating and improvement, overall, it has made progress to its objectives.

“The ACA has taken great steps toward getting everyone insured. It’s imperfect and has flaws, but the ACA was really making steps toward universal coverage.”

Harris adds there are myriad reasons why health care costs have ballooned over the years.

“National health expenditures were 17.8 percent of the GDP (gross domestic product) in 2015,” Harris notes. “In 2009 (the year before the advent of Obamacare) it was 17.3 percent. In 2001, it was 14 percent.”

According to the Center for Medicare and Medicaid Services, U.S. health care spending in 1960 accounted for five percent of the nation’s GDP.

As a share of the nation’s GDP in 2015, health spending accounted for 17.8 percent.

National health spending reached $3.2 trillion, or $9,900 per person in 2015, according to the center.

“There are a lot of reasons why there has been a run-up in the cost of health care and insurance, but the ACA is not responsible for this giant run-up,” Harris points out.

Based on components of the Trump plan that have been put on the table so far, Harris says he’s not overly impressed.

“I don’t think it has very many strong points, and it’s not very well-thought through. It will do the least for the people who need it most. Older people are going to be worse off, and so are individuals in the middle and lower classes. All provider groups I know, and even staunch conservative pockets, oppose it.”

Republican vs. Democrat

Not surprisingly, political party lines often determine which way people feel about rival heath plans.

On March 7, Senate health committee chairman Lamar Alexander released a statement about the prospects of thousands of Knoxville-area residents losing their insurance plans.

“One especially encouraging aspect of the House bill is that it would help 40,000 Knoxville-area residents who are expected to have no insurance plans available on the exchange next year by allowing them to use their Affordable Care Act subsidy outside of the exchange,” says Alexander, who lives in Blount County.

“The bill also allows subsides to be used to purchase lower-cost health plans than allowed under current law, which would provide relief to Tennesseans facing increased premiums on the Obamacare exchanges across the state.

“This bill clearly would provide Americans with a broader choice of plans, rein in the out-of-control Medicaid entitlement spending and give states flexibility to provide Americans with access to low-cost insurance.”

Alexander’s collapsing bridge

Some Republicans are calling for a pedal-to-the-metal drive to repeal Obamacare, even suggesting that a final health care bill could be on President Trump’s desk by April.

But Alexander, based on remarks in a recent hearing, seems to be taking a more cautious approach to stripping Obamacare bare.

“I think of it as a collapsing bridge,” Alexander says.

“You send in a rescue team; you go to work to repair it so that nobody else is hurt by it; and you start to build a new bridge. Only when the new bridge is complete (and) people can drive across it safely, do you close the old bridge.

“When it’s complete, we can close the old bridge, but in the meantime, we repair it. No one is talking about repealing anything until there is a concrete practical alternative to offer Americans in its place.”

No ‘easy fixes’

Whatever emerges, Harris has no doubt the politicians who forge the new plan will be held culpable by the American people.

He also notes that insurance providers also have keen eyes fixed on the proceedings.

“People get very nervous when you mess with their health care, and insurers don’t like uncertainty,” Harris says.

“There is not an easy fix.”

Barbara Nicodemus and her husband, Randy Kurth, attended a town hall meeting on Feb. 23 in Knoxville that addressed the future of the ACA and the health care dilemma in this country.

The Knoxville couple has endured their own health care crisis.

By the end of 2017, Kurth expects he will have shelled out about $80,000 in medical costs and insurance premiums since being diagnosed with prostate cancer in 2014.

Early this year, Kurth learned that his private insurance provider, Humana, would not be renewing his policy in 2018.

Nicodemus in large part blames politicians for the national health care crisis.

“It seems dire,” she says. “Both sides of the aisle are disappointing. The only thing we can do is to elect better people. We need to run people (for political office) that care about the greater good of the people over the dollars.”

Mike Blackerby is a freelance writer living in East Tennessee.