Blues plan proves even dominant insurers can offer lower premiums


Although Blue Cross Blue Shield of Tennessee monopolizes the state's health insurance market, it still offers very low premiums for plans it sells on the health insurance exchange, reported Kaiser Health News.

The insurer sold 88 percent of plans bought by Tennessee consumers during the exchange enrollment period, yet costs for its silver exchange plan for a 40-year-old averaged $181 a month--30 percent less than the national median for the least expensive silver tier plan.

Blue Cross's ability to keep premiums low contradicts some experts' findings. Jonathan Gruber, a professor of economics at Massachusetts Institute of Technology, wrote a National Bureau of Economic Research paper that determined exchange competition would drive down costs, as FierceHealthPayer previously reported.

What's more, Blue Cross priced premiums low despite Tennessee having some of the unhealthiest consumers in the country, with high proportions of people with obesity, hypertension and smoking, the article notes. But the premium prices throughout the state are similar to those in some of the country's healthiest cities, including Minneapolis, Salt Lake City and Honolulu.

In fact, Chattanooga, Tennessee is one of the 10 least expensive insurance markets in the country. One of the key reasons Blue Cross has been able to keep premiums so low is by reaching deals with some of the state's largest health systems, according to KHN.

Insurers often "just come and say, 'For our exchange product we're going to roll out the same network,' Eric Logue, a vice president for Denver-based Catholic Health Initiatives, told KHN. "They're not taking an approach to change the cost curve, and expectedly you're seeing the premiums being extremely high."

To learn more:
- read the Kaiser Health News article

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