In early September, Alaska made headlines for announcing consumers can expect higher prices when the next open enrollment period begins on Nov. 15. While premiums for individual insurance in Alaska have been increasing 12 percent annually over the past five years, the increases are even bigger for 2015. The good news is that the subsidies available to the majority of those who use the exchange mean the pain will be limited for most people.
Most will be shielded from increases
Alaska insurance officials announced significant premium increases for 2015: 35 to 40 percent for policies sold by Premera Blue Cross and 22 to 29 percent for policies sold by Moda Health. Insurance Commissioner Lori Wing-Heier said the rate increases are justified. The state’s small population and limited marketplace enrollment makes for a small risk pool. With high claim costs and few people to spread those costs across, insurance companies are raising rates to cover their expenses.
The rate increases are not as bad as they sound for most Alaskans. Wing-Heier pointed out that people who qualify for subsidies — 88 percent of Alaskans using the exchange in 2014 — won’t bear the brunt of those increases.
A report released in June by the U.S. Department of Health and Human Services showed Alaskans who received subsidies qualified on average for an 81 percent reduction in their premiums. The average monthly premium, after tax credits, for Alaska consumers is $94 in 2014, and 42 percent of Alaska enrollees who receive subsidies pay $50 or less per month.
Signups during first enrollment period
Fewer than 13,000 Alaskans enrolled in private health insurance through the federal marketplace during the 2014 open enrollment period. Just Wyoming, the District of Columbia, North Dakota, and Hawaii had lower enrollment in private health plans. About 4,200 people qualified for Medicaid or the CHIP. Alaska’s uninsured rate remains high at nearly 19 percent.
Among Alaska residents selecting a QHP, 88 percent qualified for financial assistance, compared to 85 percent nationally. A report released in June by the U.S. Department of Health and Human Services showed the average monthly premium, after tax credits, for Alaska consumers was $94. Among states using the federal marketplace, the average was $82. Forty-two percent of Alaska enrollees pay $50 or less per month after subsidies.
Twenty-seven percent of Alaska residents selected a bronze plan (20 percent nationally), 65 percent selected a silver plan (65 percent nationally), 8 percent selected a gold plan (9 percent nationally), 0 percent selected a platinum plan (5 percent nationally) and 1 percent selected a catastrophic plan (2 percent nationally). Twenty-nine percent of Alaska enrollees were between the ages of 18 and 34.
Alaska’s position on exchange, Medicaid expansion
Alaska is among the 26 states that opted to use the federal health insurance marketplace. Alaska refused all federal funding to evaluate and implement a health insurance marketplace, and it was one of the first states to announce it would leave responsibility for its marketplace in the hands of the federal government. While Gov. Sean Parnell officially announced his decision in July 2012, he had previously made his opposition to the Affordable Care Act, which mandated the exchanges, well known.
Parnell is also opposed to expanding the Medicaid program. He rejected an expansion in late 2013, saying the Alaska wouldn’t be able to afford the program if the federal government were ever to cut funding. (The federal government will pay 100 percent of Medicaid expansion through 2016 and 90 percent through 2020.) In January, Democrats proposed legislation to expand Medicaid, and they included a provision to return to the current eligibility standards if federal funding drops below 90 percent. Even with that safeguard, the bill did not make it out of committee before the legislature adjourned. According to the Kaiser Family Foundation, about 30,000 Alaskans are uninsured due to the state’s decision against Medicaid expansion.
Alaska health insurance exchange links
State Exchange Profile: Alaska
The Henry J. Kaiser Family Foundation overview of Alaska’s progress toward creating a state health insurance exchange.