Insurance Director tells lawmakers individual market could collapse

Alaska’s individual health insurance market could collapse as soon as next year, unless the legislature acts.

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That was the message delivered to lawmakers Thursday, as they consider a bill to use the state’s high-risk insurance pool to help stabilize the market.

Alaska is now down to a single health insurer on the individual market, Premera Alaska, after Moda Health gave notice this spring that it would stop offering individual plans in the state by the end of the year. Moda is the third insurer to pull out since 2013.

State Insurance Division director Lori Wing-Heier told the House Finance Committee that companies are bleeding money.

“I can’t imagine in 2018 we’re going to have insurance throughout the state, if we don’t do something,” she said.

Wing-Heier says that’s because the pool of policyholders is so small, and costs in Alaska are so high.

The losses at insurance companies have hit Alaskans hard: enrollees have faced back-to-back rate hikes of more than 35 percent. Wing-Heier says the state can expect an increase in the same range next year, and it still likely wouldn’t cover all of Premera’s losses.

The bill before lawmakers would tax health insurance plans across the market, and use that to cover some of the costs of insuring the most expensive patients.

That might allow Premera to raise rates by a smaller amount, perhaps 25 percent instead of 40 percent.

But in the long term, the state needs to find other solutions, Wing-Heier says. So the legislation also asks for permission to apply for a waiver from the federal government, to design an alternative system.

“The Affordable Care Act was written as a one size fits all. And it doesn’t necessarily work for Alaska. We’re much more rural than we are urban. We’re further away from a lot of the metropolitan centers…so we think there may be some things we can do that will bring the cost of health insurance down for Alaskans,” she said.

Gov. Bill Walker added the insurance bill to the agenda for the current special session.

It’s one of a handful of issues on the agenda that are not related to the state’s budget crisis, including proposals to reform the state’s foster care system and offer insurance to the dependents of firefighters and state troopers killed in the line of duty.