At a glance: Medicare health insurance in Alaska
- Medicare enrollment in Alaska is fewer than 104,000 residents – only about 14% of the population, as opposed to nearly 19% nationwide.
- There are no individual Medicare Advantage plans for sale in Alaska.
- 14 private insurers offer Medigap plans in Alaska, and the state’s high-risk pool offers Medigap coverage to those who aren’t eligible for private plans (along with one of the private Medigap insurers).
- There are 24 stand-alone Part D prescription plans available in Alaska, and 66,000 beneficiaries are enrolled in them.
- Spending per-enrollee for Medicare in Alaska is the second-lowest in the nation.
Medicare enrollment in Alaska
Medicare enrollment in Alaska stood at 103,889 people as of mid-2020. Alaska has the country’s third-lowest population, but the smallest population of those filing for Medicare benefits. Alaska’s Medicare beneficiaries only make up about 14 percent of the state’s total population, whereas Medicare beneficiaries account for nearly 19 percent of the total US population.
This makes sense, given that the percentage of Alaska’s residents who are age 65 or older is among the lowest in the country. But the Alaska Commission on Aging reported that 2017 was the seventh year in the row that Alaska had the fastest-growing population of residents age 65+ in the nation. That rapid growth in the 65+ population continued in 2018, so Alaska may eventually catch up with the rest of the country, in terms of the percentage of the state’s population with Medicare coverage enrollment.
Most people become eligible for Medicare in Alaska when they turn 65, but Medicare coverage enrollment is also triggered when a person has been receiving disability benefits for two years, or are diagnosed with ALS or kidney failure. Nationwide, 84 percent of Medicare beneficiaries are eligible due to being at least 65 years old, while the other 16 percent are eligible due to disability. 86 percent of beneficiaries enrolled in Medicare in Alaska are eligible due to age, while 14 percent are eligible as a result of a disability.
Medicare Advantage in Alaska
The vast majority of beneficiaries enrolled in Medicare in Alaska have coverage under Original Medicare. There are currently no individual Medicare Advantage plans for sale in Alaska.
Just 1 percent of Alaska’s Medicare beneficiaries had Medicare Advantage plans as of 2017. CMS reported that as of mid-2020, there were 1,598 Medicare beneficiaries in Alaska (out of about 104,000 total beneficiaries in the state) who had either Medicare Advantage or other private coverage (not counting supplemental private Medigap and Part D plans). Although individual Medicare Advantage enrollment is not available in Alaska, employers have the option of offering employer-sponsored retiree Medicare Advantage plans (known as Medicare Advantage Employer Group Waiver Plans, or MA-EGWPs).
The Alaska Division of Insurance confirmed that MA-EGWPs are likely the explanation for why there are nearly 1,600 people in Alaska with private Medicare coverage, despite the fact that Medicare Advantage plans are not for sale to individuals in the state (Medicare Cost plans are also not available in Alaska). Nationwide, about 20 percent of all Medicare Advantage enrollees are covered under MA-EGWPs. But Alaska is one of four states where more than 40 percent of all Medicare Advantage enrollees are in MA-EGWPs (and in the case of Alaska, it’s probably closer to 100 percent, since individual Medicare Advantage plans aren’t available in the state).
This brief from Aetna provides more background information about MA-EGWPs.
Medigap in Alaska
Medigap plans are used to supplement Original Medicare, covering some or all of the out-of-pocket costs (for coinsurance and deductibles) that people would otherwise incur if they only had Original Medicare on its own. Medigap plans are standardized under federal rules, and enrollees have a six-month guaranteed-issue enrollment window that starts when they turn 65 and enroll in Medicare Part B. But federal rules don’t guarantee access to Medigap plans if a person is under 65 years old and enrolled in Medigap as a result of a disability.
The majority of the states have adopted rules to ensure at least some access to Medigap plans for enrollees under the age of 65, but Alaska is not one of them. As of 2020, only one Medigap insurer in Alaska — United American Insurance Company — voluntarily offers a limited selection of Medigap plans to enrollees under the age of 65, with prices that are significantly higher the prices for a person who is 65. However, Alaska has kept its high-risk pool (the Alaska Comprehensive Health Insurance Association, also known as ACHIA) operational, and the pool serves as a backstop for people who are under 65 and in need of coverage to supplement Medicare.
Prior to the ACA, many states relied on high-risk pools for people who needed to purchase their own health insurance and couldn’t qualify for coverage due to medical underwriting. Some states, including Alaska, still have an operational high-risk pool — and Medigap access is part of the reason ACHIA and similar programs in other states are still offering coverage (other states that have maintained their high-risk pools and use them to offer supplemental coverage to Medicare beneficiaries include Iowa, Nebraska, New Mexico, North Dakota, South Carolina, Washington, and Wyoming).
Although the ACA eliminated medical underwriting in the individual health insurance market, it did not change anything about the rules relating to Medigap coverage. Medigap applications are medically underwritten if people apply for Medigap before they’re 65 (and their state doesn’t have a guaranteed-issue rule for that population) or if they apply after their initial enrollment window ends and they don’t have one of the qualifying events that triggers a guaranteed-issue window.
As of 2020, there were 14 private insurers offering Medigap plans in Alaska, as well ACHIA. ACHIA offers Medigap plans for people 65+ (who want to switch plans or buy a plan for the first time after their open enrollment window has closed, and aren’t eligible due to medical history) and offers a Medicare “carve-out” plan with a $1,000 deductible for Medicare beneficiaries who are under 65. The state’s Medigap buyer’s guide notes that “most companies selling Medicare supplement policies in Alaska do not sell policies to Medicare beneficiaries who are younger than 65 and on Medicare due to disability,” and the rate guide indicates that the only one doing so as of 2019/2020 is United American Insurance Company.
Alaska Medicare Part D
Original Medicare does not cover outpatient prescription drugs. But beneficiaries of Medicare in Alaska can get prescription coverage via an employer-sponsored plan (offered by a current or former employer) or stand-alone Medicare Part D plans. In most areas of the country, Medicare Advantage plans are another option, since most Medicare Advantage plans include integrate Part D prescription coverage. But as noted above, there are no indiviudal Medicare Advantage plans for sale in Alaska.
For 2020 coverage, insurers are offering 24 stand-alone Part D plans in Alaska with premiums ranging from about $13 to $85 per month. The Medicare Part D enrollment window runs from October 15 to December 7 each year, with coverage changes taking effect January 1.
As of mid-2020, there were 66,217 Alaska Medicare beneficiaries covered by stand-alone Medicare Part D prescription drug plans. Another 673 beneficiaries had Part D coverage integrated with their Medicare Advantage coverage (as noted above, these are likely to be employer-sponsored Medicare Advantage plans, although some of them may have been PPOs that were purchased in another state and the enrollee was allowed to keep the coverage after moving to Alaska).
Medicare spending in Alaska
As of 2018, spending for Medicare in Alaska per-beneficiary was the second-lowest in the nation, at $7,540.
Alaska was one of just two states — the other was Hawaii — where average per-beneficiary spending was under $7,000. Nationwide, the average was $10,096 (and on the high end, per-beneficiary spending exceeded $11,000 in Florida, Texas, Oklahoma, Mississippi, and Louisiana). That’s according to data that were standardized to account for regional differences in payment rates, and although the data did not include costs under Medicare Advantage, virtually all of Alaska’s Medicare beneficiaries have Original Medicare.
If you have questions about Medicare enrollment in Alaska or Medicare eligibility in Alaska, you can contact the Alaska State Health Insurance Assistance Program with questions related to Medicare coverage in Alaska.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.