A rapid rise in health insurance rates on the individual market presents Alaska with a problem that can be solved if finger-pointing gives way to cooperation, a former state commissioner under Gov. Sean Parnell told a legislative committee Tuesday.
Former Commissioner of Administration Becky Hultberg, now president of the Alaska Hospital and Nursing Home Association, said the requirement in the new federal health care law that prohibits insurance companies from denying coverage to those with pre-existing conditions is one of the most popular parts of the Affordable Care Act.
It replaced a situation in which "you can be denied coverage due to the genetic lottery or unfortunate circumstances," she said at the hearing of the House Labor and Commerce Committee.
But it has come at a cost for several thousand Alaskans buying insurance on the individual market who do not qualify for federal subsidies, available to those whose income is up to four times the poverty level.
Among the people who bought individual policies this year are a disproportionate number of Alaskans with serious health problems, such as chronic heart failure, according to the largest of the two insurance companies writing policies that may qualify for subsidies.
In the first six months of the year, insurance company Premera Blue Cross said, 33 patients alone had $7 million in insurance claims. The other 7,000 members covered by Premera had about $14 million in claims.
In the past, Premera said, those 33 patients were probably either in the high-risk pool -- with costs covered by a surcharge on all insurance coverage in Alaska -- or they did not have coverage. A Premera official said the surcharge for its members was often $8 to $10 per member per month.
Premera has filed for an average rate increase in its individual coverage of about 37 percent.
Moda Health, Alaska's other major seller of individual insurance policies, said that it did not have the same experience, but that a provision in the Affordable Care Act will require it to pay to make up some of the losses in the individual market in Alaska at the end of the year. The company said the main reason for its 2015 rate increases is this expense, known as a "transfer payment," to average out the risk. Its increases are to range between 22 and 29 percent.
These rate increases do not apply to the 34,000 people in Alaska who have small-group coverage or large-group coverage from Premera or those who have similar coverage from Moda. Rates in those categories are going up by single digits for 2015, according to company and state officials.
The sharp increases in the individual market largely affect those who are self-employed or who do not have coverage in their workplace.
Premera has said that a return to a surcharge assessed on all health insurance in Alaska would solve the problem. Moda expressed support for the idea.
Hultberg said the health care institutions in Alaska are concerned not only with the rise in rates in the individual market, but "that the dialogue so far has not been so much about finding solutions," but about pointing fingers.
She did not mention Gov. Sean Parnell and other Republicans, who have blamed the rising rates on Obamacare.
She also did not mention Sen. Mark Begich and other Democrats, who have said Parnell's refusal to expand Medicaid coverage or take other steps to implement the law are contributing factors to the rate increases.
Hultberg said her group is asking the state and federal governments to see how creativity, flexibility and innovation would help solve the problem.
"We say Alaska's unique, and here's an opportunity to demonstrate that we can find unique solutions to our unique problems," she said. "We ask the federal government to consider that flexibility and innovation may be necessary to ensure that the health insurance needs of Alaskans are met."
"This is a problem that we need to get our heads together and we need to figure out how to solve," said Hultberg.
Hultberg said private insurance is a "necessity, not a luxury" for those who are self-employed or work in jobs in which insurance is not offered.
Concerning Medicaid expansion, Hultberg said for many hospitals in Alaska, the expansion of Medicaid to cover more people is a moral issue and that many people simply can't afford health care.
Rep. Dan Saddler questioned whether the state or federal Constitution or state law mentions a right to health care.
She referred to a 1986 federal law known as the Emergency Medical Treatment and Active Labor Act that requires any hospital that accepts Medicare to provide emergency treatment regardless of ability of pay.
Hultberg said it is founded on the idea that society has decided that "health care is one of those basic, fundamental responsibilities."
Rep. Lora Reinbold said the nation is almost $18 trillion in debt and using federal dollars to cover Medicaid expansion is not sustainable.
"Why should people, when we have such a high debt, be forced to pay more taxes in order to take care of others, when it's not a sustainable model at this time," she said.
Hultberg said the money is already plugged into federal budget projections. "They're going to get spent regardless of whether the little bit that we would spend in Alaska on Medicaid expansion is part of the equation."