Blue Cross Blue Shield to pull out of Obamacare exchange in Nashville, Knoxville and Memphis - Independent Insurance Consultants | Medicare and Life Insurance | Independent Insurance Consultants | Medicare and Life Insurance

Blue Cross Blue Shield to pull out of Obamacare exchange in Nashville, Knoxville and Memphis

Blue Cross Blue Shield to pull out of Obamacare exchange in Nashville, Knoxville and Memphis

Posted: Sep 26, 2016 11:27 AM EDTUpdated: Sep 26, 2016 11:27 AM EDT

BlueCross BlueShield of Tennessee will not sell insurance plans on the Obamacare exchange in the state’s three largest metro areas next year, as the health care giant grapples with hefty losses and ongoing uncertainty on the marketplace.

The insurer made “an extremely difficult but necessary decision” to leave the Nashville, Memphis and Knoxville markets as it tries to manage its number of members to hit a break-even point amid three years of losses, said Roy Vaughn, chief communications officer of BCBST.

“It’s not something we want to do but we believe we must look out for the health care and financial security for all the members that we serve,” Vaughn said in an interview with The Tennessean.

The company formally made the change to its 2017 plans in a Friday filing with the U.S. Department of Health and Human Services — roughly a month after it raised the possibility of scaling back. Earlier this summer, BCBST requested — and was granted — state approval for an average 62-percent premium increase. The rate hike is still pending federal approval.

By the end of 2016, BCBST anticipates losses from three years selling on the exchange established by the Affordable Care Act will approach $500 million.

“In our rate request we took great care to close the gap between premiums and costs. We feel like we’ve adequately addressed that, but uncertainties at the federal level could still put us in a loss position even if our experience with the group is better and our rates better reflect our medical costs,” Vaughn said.

The Chattanooga-based insurer, which was the only insurer that originally planned to sell statewide, expects to shed about 112,000 people from its rolls under the change and keep about 80,000 primarily in rural areas. Shoppers in the three metro areas will not be able to buy either on-exchange plans, where tax credits may be used, or off-exchange plans, which are not eligible for tax credits.

The decision will reshape open enrollment, which begins Nov. 1, for people who buy individual plans in the state’s three largest markets — and where Cigna or Humana, or both, are expected to sell plans. According to BCBST, 52,000 people in Nashville, 31,000 in Knoxville, and 29,000 in Memphis, will have to look to another insurer for coverage in 2017.