Strip away the politics surrounding Obamacare in Tennessee and what’s left, in the wake of a new round of insurer rate requests on the exchange, is a stark picture of the state’s bleak vital signs.
The health culture of the state has produced a population characterized by unwellness — and that’s increasingly being felt when people go to pay for coverage.
Of course, not everyone in the state is unhealthy. But Tennessee’s high rates of diabetes, smoking, obesity and high blood pressure — among many others — are driving up costs.
Insurers filed requests Friday with state officials to increase premiums for exchange plans. The average rate requests start at 23 percent and top out at 62 percent — dwarfing the 2016 requests.
Employers are struggling to deal with the rising expense, and people who are buying coverage on their own are increasingly experiencing sticker shock — at least until the tax credit, which 85 percent qualify for, whittles down the premium.
“Until Americans are taking better care of themselves it’s not going to matter how you’re moving dollars around to get people insured,” said Dan Witters, research director for Gallup-Healthways Well-Being Index. “Costs are going to go up.”
BlueCross BlueShield of Tennessee scored the majority of enrollees on the federally run exchange in all of the first years. It racked up the losses to show for it, too.
In 2014, it posted a $140 million loss. In 2015: $170 million. It’s not even halfway through 2016 and the insurer is projecting losses will be above $100 million.
Some of it is medical inflation, high prescription costs, potentially too many services and other costs built into the modern health care system.
The people eligible to buy insurance on the exchange are ranked among the least healthy in the country by the U.S. Department of Health and Human Services. The state has a high-risk pool of enrollees, yet relatively low premiums.
Even with the hefty premium increases leading up to 2016, the premiums don’t match the expense of that risk. And, many people ultimately didn't feel the brunt of the increases because tax credits absorbed much of the cost.
Breaking even after three open enrollments would probably be met with a raucous celebration at BCBST’s Chattanooga headquarters.
As federal stabilization programs, such as reinsurance, begin to roll off, consumers are going to face a truer receipt for health care costs, which are the result of personal choices (genetics play a role, too), as well as decisions about how to dispense care.
“The insurance companies are not the problem here. They are a model of business we’ve gotten dependent on. The cost of medicine has not been addressed,” said Tatum Allsep, executive director of Music Health Alliance. “There’s no incentive to be healthy.”
From 2010 to 2015 the number of uninsured people in Tennessee dropped, according to data from the Gallup-Healthways Well-Being Index.
At the same time, the health of the general population in several metro areas got worse. Having access to health care is not the same as having health, said Witters.
The health of the state's top metro areas posted mixed results in obesity, smoking, high blood pressure, exercise and diabetes on the Well-Being Index. Memphis and Knoxville got worse; Clarksville and Chattanooga had mixed results; and Nashville improved incrementally.
“And I think that’s going to be reflected in the quality of health of not only those entering insurance but also of those already in it,” Witters said.
BCBST insured 58 percent of people on the Obamacare exchange in 2015 and has 68 percent of the enrollees in 2016, according to Decision Resources Group.
Its exchange members averaged 31 claims in 2015, compared to 24 from those with work-sponsored plans.
BCBST saw an increase from 2014 to 2015 in the prevalence of several diseases in exchange members:
52 percent increase in major congenital heart disorders
31 percent increase in end stage renal disease
State and insurance officials hoped for signs leading into the fourth open enrollment that claims costs were stabilizing. The hope was that people had been playing catch-up with care and were getting to a more healthy place.
But data coming in to the Tennessee Department of Commerce and Insurance doesn’t point to stabilization, said commissioner Julie Mix McPeak.
Claims data shows, according to state and insurance officials as well as documents, that there is a tremendous amount of sick people still coming into the market.
Tennessee’s health scores almost guarantee that many who look to buy insurance are going to be in “pretty lousy health,” said Witters.
To make this model of privatized health insurance work, the member pool “can’t be in terrible health. They at least need to be in pretty good health,” said Witters.
McPeak has "concerns that insurers will decide this is not viable.”
For many policyholders the role of health in determining the cost of coverage is "overlooked," said Jackie Shrago, who helps people navigate the marketplace. Premiums are determined by the risk associated with the whole group, meaning the healthier help offset the sicker.
In Tennessee, where more than 66 percent of the state is overweight or obese, and chronic disease is common, healthy is relative.
Obesity increases the per-person health care cost by $1,429 a year, according to 2008 research sponsored by the U.S. Centers for Disease Control and Prevention. Adjusted for inflation, that’s $1,580 today, said Witters.
In Tennessee, 31.2 percent of the adult population in 2014 was obese, according to the CDC. That's an extra $2.49 billion in aggregate health care costs.
Being overweight, but not obese, adds $378 per person per year, Witters said. Smoking adds $2,056 per person per year, according to a 2013 Ohio State study.
Shrago said obesity and smoking are the two big risk factors that the industry and, collectively, everyone needs to try to change.
“Having more Americans who are insured is a positive thing but where the rubber is going to hit the road, is what happens with health and what will happen with costs,” said Witters. “Irrespective of politics (that’s) how (the ACA) will be evaluated ultimately.”