Senate passes bill to dampen rising individual healthcare costs
The Alaska Senate passed a bill Friday to mitigate expected increases in personal healthcare once Moda Health exits the market next year. Premera Blue Cross Blue Shield will become the sole insurance provider in the individual market after that.
Twenty-three-thousand Alaskans will see an increase in their monthly premiums in order to cover the cost of those insured as “high risk,” according to the state Division of Insurance. There are 495 Alaskans who currently fall into the category — which can include conditions such as obesity, kidney failure, pre-mature births, or heart disease.
“If we do not pass a reinsurance bill, then 23,000 Alaskans will see their premiums go up, possibly up to 70 percent,” said Sen. Mia Costello, R-Anchorage, who carried HB 374 on the Senate floor.
In order to lessen the impact on already expensive individual plans, the bill would require the state bear some of the cost in the “high risk” claims – to the tune of $55 million.
“We know now that people are struggling to make their monthly payment,” said Lori Wing-Heier, director of the Division of Insurance. “When you look at a family of two or a family of four, we know that their monthly payment, or their premium payment, is in most cases more than their mortgage. And then, on top of that, they have a $10,000 deductible and out of pocket expenses, so it’s adding up so quickly for them,” she said.
Wing-Heier added that some Alaskans’ insurance bill hovers around $30,000 a year.
According to Wing-Heier, costs will still go up next year, but not as much if the bill becomes law. She estimates a 25 percent increase to costs, but says the division won’t know until Premera submits filing in July.
Many senators noted they were reluctantly voting for the bill, and were torn between the need to address the issue and the high cost to the state in implementing the measure.
“We worked really hard to reduce spend in this body this year,” said Sen. Peter Micciche, R-Soldotna, referring to the Senate’s work on the state budget. “Then this $55 million bill comes up. And we evaluated the difference of what happens if we don’t pay this bill right now, and our last remaining provider leaves the state, so the choice is a very tough one,” he said after casting a “yes” vote.
HB 374 will head to the House for a concurrence vote before making it’s way to Gov. Bill Walker’s office for a final signature.
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