Our sole purpose is to provide our members with peace of mind. Our members want and expect us to perform well operationally and financially. They want to be assured we have the financial means to cover health care claims.
The Tennessee Department of Commerce and Insurance requires that we maintain $1 billion in reserves. We have an additional $309 million in available reserves. That’s a lot of money, but not when you consider that we cover more than 3 million people and it took 67 years to build it up.
If we stopped taking in new revenue, our total reserves would continue paying members’ claims for 60 days and for our statutory reserves it would be 46 days. Our financial reserves are strong not just because the law requires them to be, but because it’s an important part of our mission to give you peace of mind. When you need us, we’re here for you.
Another important point to consider is that if we were to use funds from our reserves to offer artificially low premiums, it would only be a temporary fix. Most of our reserves are legally required and have to be maintained. Medical costs continue rising each year, and even if it were two or three years down the road, premiums would have to jump again to catch up with them.
Posted in: Health Care Costs 101