2027 Rate Changes - Tennessee: +15.9% indy market; +14.7% sm. group market

ACA exchange enrollment has dropped by over 14% in Tennessee since Congressional Republicans allowed the enhanced federal subsidies to expire at the end of last year.

Initial signups during Open Enrollment were down 11.4% vs. OEP 2025...but effectuated enrollment dropped by 14% year over year as of February.

That's over 72,000 Tennesseans who already lost coverage in just the first two months of the year...a number which has likely continued to climb since then.

Here's what this looks like visually, with both 2025 and 2019 (the last pre-COVID year, which didn't include the enhanced subsidies) included for comparison:

Looking ahead to 2027, the preliminary rate filings for both the individual and small group markets are now available via the federal Rate Review database:

ALLIANT HEALTH PLANS:

The purpose of this justification is to explain the rate increases for the following Alliant Health Plans (Alliant) individual comprehensive medical plans in Tennessee with effective dates of January 1, 2027 through December 31, 2027. This justification is intended to comply with the requirements of Section 2794 of the Public Health Service Act as added by Section 1003 of the Patient Protection and Affordable Care Act (ACA). This justification may not be appropriate for purposes or scopes beyond those described above and, therefore, should not be used for other purposes.

This justification specifically addresses the rate increase requested for the SoloCare products, which impacts 4,373 members. The average rate increase across all plans from the most recently approved rates effective January 1, 2026 is 23.3%. The minimum and maximum rate changes are 16.1% and 27.5%, respectively, and vary bybene fit plan.

2. CHANGES IN EXPERIENCE BASIS

Alliant’s 2025 claims experience, both direct Tennessee experience as well as the Georgia experience underlying the manual rate, was unfavorable relative to the 2024 claims experience used in developing 2026 rates.

3. CHANGES IN MEDICAL SERVICE COSTS AND TREND ASSUMPTIONS

The projection of claims from Alliant’s experience period to 2027 includes an expected increase in the cost of all medical and pharmacy services. We developed these trend assumptions using general industry knowledge regarding recent trends in medical inflation, industry research, and judgment.

4. CHANGES IN BENEFITS

Alliant will make cost sharing modifications by plan to comply with the final 2027 Actuarial Value Calculator and to align with Alliant’s desired market position. To the extent the plan changes lead to a higher or lower level of benefit richness, the premium rates would increase or decrease, respectively.

5. CHANGES IN RISK ADJUSTMENT

Alliant’s projected 2027 risk adjustment payable increased relative to the payable assumed in the 2026 rates.

6. EXPIRATION OF EXPANDED ADVANCE PREMIUM TAX CREDIT SUBSIDIES

It is expected the expiration of expanded Advance Premium Tax Credit subsidies will result in higher market morbidity due to the expected mix of enrollees remaining in the market.

BANKERS RESERVE LIFE INSURANCE:

Bankers Reserve Life Insurance Company of Wisconsin is filing rates for the individual block of business, effective January 1, 2027. This document is submitted in conjunction with the Part I Unified Rate Review Template and the Part III Actuarial Memorandum. This information is intended for use by the Tennessee Department of Commerce and Insurance, the Center for Consumer Information and Insurance Oversight (CCIIO), and health insurance consumers in Tennessee to assist in the review of Bankers Reserve Life Insurance Company of Wisconsin’s individual rate filing.

The results are actuarial projections. Actual experience will differ for a number of reasons, including population changes, claims experience, and random deviations from assumptions.

Medical trend, or the increase in health care costs over time, is composed of two components: the increase in the unit cost of services and the increase in the utilization of those services. Unit cost increases occur as care providers and their suppliers raise their prices. Utilization increases can occur as people seek more services than before. Additionally, simple services can be replaced with more complex services over time, which is known as service intensity trend. An example of service intensity trend would be the replacement of an X-ray with an MRI scan. Replacing the service with a more intense service causes the total cost of medical services to increase.

The proposed rate change of 18.1% applies to approximately 882 individuals. Bankers Reserve Life Insurance Company of Wisconsin’s projected administrative expenses for 2027 are $95.83 PMPM. Administrative expense does not include $12.54 for taxes and fees. The historical administrative expenses for 2026 were $78.95 PMPM, which excludes taxes and fees. The projected loss ratio is 88.9% which satisfies the federal minimum loss ratio requirement of 80.0%.

 

BLUE CROSS BLUE SHIELD OF TN:

BlueCross BlueShield of Tennessee is requesting approval for rate changes that average 10.4% across our ACA-compliant individual health plans. Our proposed rates factor in expected changes in our medical costs and retention.

Our requested rate changes are necessary to cover what we expect to pay out for the medical care our members need and cover operating expenses for on- and off-Marketplace individual plans in 2027 based on previous experience.

As of April 2026, we have around 92,000 members who will be affected by our proposed changes if they elect to renew their plans for 2027. While the average rate increase is 10.4%, the amount each member would actually pay in 2027 will vary based on which plan they select, along with other factors like their income level, network selection, location, and age.

CELTIC/CENTENE:

(Unfortunately, Celtic Insurance Co's actuarial memo is heavily redacted, so I had to come up with a rough guesstimate as to their spring 2026 enrollment based on the total on-exchange enrollment as of February and the other carrier enrollment data).

CIGNA:

(Cigna announced last spring that they are pulling out of the individual market nationally. I don't know their spring 2026 enrollment in Tennessee specifically, so I've guesstimated it to be perhaps 70,000 based on their spring 2025 enrollment.)

OSCAR INSURANCE CO:

The purpose of this document is to present rate change justification for Oscar Insurance Company (Oscar’s) Individual Affordable Care Act (ACA) products, with an effective date of January 1, 2027, and to comply with the requirements of Section 2794 of the Public Health Service Act as added by Section 1003 of the Patient Protection and Affordable Care Act (ACA).

Using in-force business as of March 2026 , the proposed average rate increase for renewing plans is 18.7%. Rate increases vary by plan due to a combination of factors including shifts in benefit leveraging and cost-sharing modifications. This rate increase is absent of rate changes due to attained age. The rate increase impacts an estimated 89,993 members.

The significant factors driving the proposed rate change include the following:

Medical and Prescription Drug Infl ation and Utilization Trends

The projected premium rates reflect the most recent emerging experience which was trended for anticipated changes due to medical and prescription drug inflation and utilization.

Administrative Expenses, Taxes and Fees, and Risk Margin

Changes to the overall premium level are needed because of required changes in federal and state taxes and fees. In addition, there are anticipated changes in both administrative expenses and targeted risk margin.

Prospective Benefit Changes

Plan benefits have been revised as a result of changes in the Center for Medicare and Medicaid Services (CMS) Actuarial Value Calculator and state requirements, as well as for strategic product considerations.

Anticipated Changes in the Average Morbidity of the Covered Population

Changes to the overall premium level are needed because of anticipated changes in the underlying morbidity of the projected marketplace.

Anticipated Changes in the Network Configuration

Changes to the overall premium level are needed because of anticipated changes in the underlying network configuration and associated unit costs.

UNITEDHEALTHCARE INSURANCE CO:

UHIC is filing 2027 rates for individual products. The proposed rate change is 28.68% and will affect 66,697 individuals. The rate changes vary between 25.63% and 39.1%. Given that the rate changes are based on the same single risk pool, the rate changes vary by plan due to plan design changes.

Financial Experience of the Product

The premium collected in plan year 2025 was $516,198,330. Incurred claims during this period were $407,939,426 and UHIC expects to pay $64,915,566 in risk adjustment. The loss ratio, or portion of premium required to pay medical claims, for plan year 2025 is 90.40%.

Changes in Medical Service Costs

There are many different healthcare cost trends that contribute to increases in the overall U.S. healthcare spending each year. These trend factors affect health insurance premiums, which can mean a premium rate increase to cover costs. Some of the key healthcare cost trends that have affected this year’s rate actions include:

• Increasing cost of medical services: Annual increases in reimbursement rates to healthcare providers, such as hospitals, doctors, and pharmaceutical companies.
• Increased utilization: The number of office visits and other services continues to grow. In addition, total healthcare spending will vary by the intensity of care and use of different types of health services. The price of care can be affected using expensive procedures such as surgery versus simply monitoring or providing medications.
• Higher costs from deductible leveraging: Healthcare costs continue to rise every year. If deductibles and copayments remain the same, a higher percentage of healthcare costs need to be covered by health insurance premiums each year.
• Impact of new technology: Improvements to medical technology and clinical practice often result in the use of more expensive services, leading to increased healthcare spending and utilization.
• Reduction of premium subsidies: Expanded and enhanced federal premium tax credits for consumers expired at the end of 2025. As a result, there will be sicker members on average in the insurance pool as healthier members exit the market.

Changes in Benefits

Changes in benefits impact costs and therefore affect premium changes. Plan benefits are typically changed for one of three reasons: to comply with the requirements of the Affordable Care Act or state law, to respond to consumer feedback, or to address a particular medical cost issue to provide greater long-term affordability of the product.

The Affordable Care Act implemented requirements for the “value” that must be offered by plan designs in the Individual and Small Group markets. These are called “metal levels”. For a benefit plan to remain classified within a particular metal level from year to year, adjustments to deductibles, copayments or coinsurance are sometimes required. These adjustments impact the cost and therefore the premium increases for the plan.

Administrative Costs and Anticipated Margins

UHIC works to directly control administrative expenses by adopting better processes and technology and developing programs and innovations that make healthcare more affordable. We have led the marketplace by introducing key innovations that make healthcare services more accessible and affordable for customers, improve the quality and coordination of healthcare services, and help individuals and their physicians make more informed healthcare decisions.

Taxes and fees imposed by the state and federal government are significant factors that impact healthcare spending and must be included as additional administrative costs associated with the plans. These fees include Affordable Care Act taxes and fees which impact health insurance costs and need to be reflected in premium. Another component of premium is margin, which is set to address expected volatility and risk in the market.

The requested rate change is anticipated to be sufficient to cover the projected benefit and administrative costs for the 2027 plan year.

Combined, the weighted average rate increase being requested for 2027 individual market policies in Tennessee is 15.9%.

As for the Tennessee small group market, it looks like one carrier is leaving (Guarantee Trust) while the remaining three are seeking an unweighted average increase of 14.7%.