At a glance: Medicare health insurance in Alaska
- Fewer than 100,000 Alaska residents are enrolled in Medicare – only about 13% of the population, as opposed to more than 18% nationwide.
- There are no individual Medicare Advantage plans for sale in Alaska.
- 13 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.
- There are 22 stand-alone Part D prescription plans available in Alaska, and 39,000 beneficiaries are enrolled in them.
- Per-enrollee Medicare spending in Alaska is the second-lowest in the nation.
Medicare enrollment in Alaska
There were 97,195 Alaska residents enrolled in Medicare as of November 2018. Alaska is the only state with fewer than 100,000 Medicare beneficiaries, although Alaska also has the third-lowest population in the country. But Alaska’s Medicare beneficiaries only make up about 13 percent of the state’s total population, whereas Medicare beneficiaries account for more than 18 percent of the total US population.
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 will likely catch up with the rest of the country eventually, in terms of the percentage of the state’s population enrolled in Medicare.
Most people become eligible for Medicare when they turn 65, but Medicare coverage is also available to people who are disabled. 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. In Alaska, 86 percent of Medicare beneficiaries are eligible due to age, while 14 percent are eligible as a result of a disability.
Medicare Advantage in Alaska
The vast majority of Alaska’s Medicare beneficiaries 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 November 2018, there were 1,401 Medicare beneficiaries in Alaska (out of 97,195 total beneficiaries in the state) who had either Medicare Advantage or other private coverage. Although individual Medicare Advantage plans aren’t available for purchase 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 more than 1,400 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. 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 unable to qualify for Medigap coverage.
Prior to the ACA, many states relied on high-risk pools prior to the 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 2018, there were 13 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.”
Medicare Part D in Alaska
Original Medicare does not cover outpatient prescription drugs. But Medicare beneficiaries in Alaska can get prescription coverage via an employer-sponsored plan (offered by a current or former employer) or a stand-alone Part D plan. In most areas of the country, Medicare Advantage is another option, since most Medicare Advantage plans include integrate Part D prescription coverage. But as noted above, there are no Medicare Advantage plans for sale in Alaska.
For 2019 coverage, insurers are offering 22 stand-alone Part D plans in Alaska with premiums ranging from about $16 to $97 per month.
As of November 2018, there were 38,992 AlaskaMedicare beneficiaries covered by stand-alone Part D prescription drug plans. Another 596 beneficiaries had Part D coverage integrated with their Medicare Advantage coverage (it’s not entirely clear how this coverage was obtained — it’s possible that the enrollees had it in another state and were able to keep it after moving to Alaska, or it’s possible that it was purchased in a prior year and was still in force as fo 2018; we’ve reached out to the Alaska Division of Insurance and will update this page when we have more information).
Medicare spending in Alaska
As of 2016, per-beneficiary Medicare spending in Alaska was the second-lowest in the nation, at $6,846.
Alaska was one of just two states — the other was Hawaii — where average per-beneficiary spending was under $7,000. Nationwide, the average was $9,533 (and on the high end, per-beneficiary spending exceeded $11,000 in Florida, Texas, 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.
You can read more about Medicare in Alaska in our state Medicare guide. You can also 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.