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Tennessee and Health Reform

As Tennessee politics lean to the conservative side, many residents and officials still oppose the Affordable Care Act even after its implementation. The state’s then-governor helped bring Obamacare to the Supreme Court in 2012, where the law was upheld.  From continuation of coverage for young adults to the individual mandate, the federal health law is making an impact on the people and insurance companies of the Volunteer State. While it may be difficult to keep up with all of the laws and changes, the most important ones for consumers to know are those which affect you as a policyholder.

As a law centered around reforming the American healthcare system to the benefit of the patient, Obamacare is making health insurance more available and regulations less harsh. In the past, many Tennesseans were declined insurance plans for having medical conditions or had their rates increased for having a certain job. This is no longer permissible under the law when you apply for individual health insurance.

While some residents may oppose the law, Tennessee consistently ranks very low for health status, and especially those with medical conditions can benefit from the law’s provisions. This law provides an opportunity to get coverage for illnesses so individuals can manage their health and decrease medical spending. The ACA addresses this population, assuming all Americans want the right to have health insurance without being declined, rated up, or limited in their coverage.


The ACA in Tennessee: 2010-2013

From the law’s beginnings, a new set of rules was established for insurers, including the inability to rescind a health plan from a policyholder. Unless the policyholder has committed an illegal act, rescissions are illegal themselves. This allows people who unexpectedly become sick while insured to remain on their plan without experiencing premium adjustments or cancellation of benefits. Additionally, private health plans in Tennessee have been required to not impose lifetime benefit limits, and to increase their annual benefit maximums by $1 million each year until eliminated in 2014. For insured people with chronic illnesses, this has been an important improvement.

Tennessee insurers’ internal spending has also been regulated since 2011 by the medical loss ratio, or 80/20 rule, which requires health plans to allocate no more than 20 percent of premium income to company costs. If an insurer neglects to meet this rule, they must either lower their premiums for the next year, or send their members rebates for the amount they should have spent on medical care and other advancements. In 2012, 240,298 Tennessee policyholders received a total of $28,810,557 from private insurers, averaging about $201 per household in rebates. Insurers are also unable to increase premiums by more than 10 percent each year without being publicly challenged by the insurance department.

Young adults in Tennessee have been able to stay on their parent’s health plan until their 26th birthday thanks to the ACA. This portion of the law has provided more than 11 million people with coverage nationwide from 2010-12, insuring 59,000 people in Tennessee within the first year of the law. As long as a person does not have access to employer-sponsored coverage, they can stay on their parent’s plan whether they live in another state, get married, or have a job without insurance.

Pre-existing conditions started being treated differently as of 2010, when the law established the rule that no child age 18 or younger would be declined coverage. Individual health plans could still turn down anyone over 18 with a health problem until 2014, yet for adults the Pre-Existing Condition Insurance Plan was established. PCIP acted as a temporary high-risk pool for people with certain conditions or who had been declined based on their health status, operating from 2011-13. This plan offered comprehensive insurance to those who were accepted, providing a new option for high-risk individuals.

Another immediately effective provision was 100 percent coverage for preventive services, allowing insured people to receive necessary care for free under their health plan. This eventually grew to include a variety of women’s health services in August 2012, and prevention of pregnancy, cancer, diabetes, and other illnesses are all covered in full when using in-network providers.


Health Reform in Tennessee After 2014

The most significant year for health reform laws is 2014, when the individual mandate, requiring all Tennesseans to get insured or pay a penalty, is in place, as well as the new restrictions for insurers. Insurance companies on the individual market will be unable to increase premiums or decline an applicant with a health problem or history of medical concerns. Premium equality also goes for gender, as female applicants will pay the same as males, and those with hazardous occupations, such as firefighters, will not be rated up for their line of work. Rate restrictions can only occur with different age groups and tobacco use.

Individual insurers will also be required to cover a set of essential health benefits for plan members, which the state of Tennessee will select for all health plans to offer. The state must choose at least ten categories of benefits for health insurers to provide in their more comprehensive plans, including prevention and disease management, maternity and newborn care, hospital, emergency, prescriptions, mental health, and pediatrics. By adding coverage for these benefits, insurance companies guarantee you get access to the services that are most important and have been sometimes overlooked in the past.

The healthcare law also established a state health insurance exchange, offering coverage to more individuals in Tennessee. In Tennessee, tax credits are awarded to marketplace applicants who earn least 100 percent of the poverty line to help make premiums affordable. Those who earn up to 400 percent of poverty also have access to subsidies to offset their premium costs. Exchange plans will be offered in varying coverage levels, including Bronze, Silver, Gold, and Platinum, which range from 70 to 100 percent coverage after deductible. These plans also include coverage for essential health benefits so everyone signing up knows they have access to services like office visits, emergency care, and maternity.

Tennessee did not move forward with Medicaid expansion, yet, though the governor was still conjuring up an alternate plan by 2014. As per Arkansas Gov. Mike Beebe’s concept to use Medicaid expansion funds provided by the government to reduce premiums on exchange plans, Tennessee may adopt a similar idea. Medicaid expansion under health reform intended to offer coverage to childless adults up to age 64 making less than 138 percent of poverty. This would impact several hundred thousand people living in Tennessee, providing them with free health insurance, but the state doesn’t feel it entirely feasible. Republican Gov. Bill Haslam has discussed different options with the Obama administration and plans not to expand TennCare in 2014. Additionally, Haslam is cautious to expand the program due to previous experiences, though there may be hope for expansion or an alternative for low-income residents by 2015.



Health Reform Updates

Tennessee Health Insurance Exchange Information

TennCare Medicaid





1. Healthcare.gov. How the Health Care Law is Making a Difference for the People of Tennessee.

2. Christina Vestal. Stateline. Obama Administration Poised to Approve Arkansas-style Medicaid Expansions.

 3. 22 April 2013. Loren Heal. Heartlander Magazine. Tennessee Rejects Medicaid Expansion—For Now.