State regulators have approved two insurers to begin offering health coverage on Alaska's insurance exchange, a key provision of the Patient Protection and Affordable Care Act (ACA) that aims to inject competition and consumer choice into healthcare. The exchanges are expected to begin selling insurance this fall, just ahead of the Jan. 1 deadline for most of "Obamacare" to take effect.
Alaska turned down federal money to conceive of and prepare to build an exchange. Gov. Sean Parnell at the time balked at accepting money to build a health insurance website for Alaska. Ultimately, he declined to build one at all, leaving residents to await a federal template, built for states including Alaska that only grudgingly accepted Obamacare as law of the land.
Some states that built their own exchanges are now offer much more information about plans and rates that will be offered starting next year. In some cases those rates are lower than expected. What information that is available right now comes because in Alaska, companies offering health plans, including those under the markeplaces or exchanges must have their policies and rates approved by state insurance regulators.
Rate information remains confidential under state law until the new policies take effect on Jan. 1 of next year, said the Division of Insurance's Jacob Lauten. The rates will be made public by the companies in any event when they begin selling them through the marketplace on Oct. 1, he said. Neither the companies nor the federal government are bound by the state's confidentiality rules and may release them earlier, he said.
According to the state Division of Insurance, at least two companies are approved for the new federal exchanges initially:
- Premera Blue Cross Blue Shield of Alaska, currently the state's largest insurance provider, dominating individual policy sales, It has slightly smaller leads in small-employer policies and large employer polices.
- Moda Health, which is the new name of ODS Health Systems of Oregon, which recently changed its name after expanding throughout the Pacific Northwest. The name change is symbolic of its embrace of health care transformation, the 57-year-old company said last month.
Getting two qualified companies is an initial victory for the federally run site, which is designed to reduce costs through consumer choices and increased competition.
"Obviously, it’s a step in the right direction," to be assured a choice between competent, experienced companies, said Sen. Hollis French, D-Anchorage.
One notable insurer not offering plans in Alaska: Aetna, so far. In other states Aetna has said it intends to wait out initial start-up hurdles before deciding whether to participate when it has explained why it wasn't offering policies.
French said Parnell made a mistake when it chose not to develop its own exchange.
"He's missing a huge opportunity to shape the exchange, and make it more Alaska-friendly," he said.
One of the provisions at the heart of Obamacare, and also at the heart of the controversy over it, is the requirement that everyone have health insurance. The exchanges and subsidies are designed to both make those now-required policies more available, and cheaper.
Currently, many people without coverage can't pay their medical bills, which are passed on to others. That's considered to be a major factor in driving up health care costs for everyone. The new policies available on the exchanges or marketplaces also include federal subsidies for people with lower incomes to make insurance even more affordable.
French said he expected the competition and caps on insurance company overhead to help bring down costs.
"We hope that Alaskans experience the same reduction in cost that other states have seen as the exchanges go into effect and roll out their estimates," he said.
Josh Applebee, the Department of Health and Social Services’ point person on health care policy, declined comment Monday on the importance of competition.
His department last year had hired a consulting firm to provide advice for Parnell on whether Alaska should develop its own exchange. That report said that state staff preferred a state exchange, and the consulting firm said that if not for the political controversy, it would have recommended a state exchange as the most effective way to meet the state's needs.
Parnell rejected that plan, however, and had rejected federal funding for a state exchange.
In an opinion column recently published in newspapers around Alaska, Parnell defended that action.
State-run exchanges have been "problematic" he said, citing New Hampshire's failure to attract more than one insurance company to its exchange.
Contact Pat Forgey at pat(at)alaskadispatch.com