Alaska News

Health insurance premiums rose 90.8 percent since 2000

A report released today by Families USA, a nonpartisan and nonprofit health care advocacy group, finds that between 2000 and 2009, health insurance premiums for Alaskans rose a whopping 90.8 percent, while earnings rose by 17.3 percent.

That means that premiums rose about 5.3 times faster than earnings for Alaskan workers.

Families USA analyzed health premium-to-wage increases in every state, and found that on average, premium rates rose 4.9 percent faster than earnings, with Michigan being the highest at 12.9 percent, followed by Indiana at 7.8 percent.

Ron Pollack, Executive Director of Families USA, cited four of the many causes of skyrocketing health care premiums: wasteful health care spending; an almost-unregulated insurance market; a dramatic drop in competition in the insurance market; and costs shifted from the uninsured to the insured, termed a "hidden health tax."

"Rising health care costs threaten the financial well-being of families in Alaska and across the nation," Pollack said. "If health care reform does not happen soon, more and more families will be priced out of the health coverage they used to take for granted."

Alaskans have some of the highest rates of uninsured in the country. Nearly 33 percent of Alaska's population -- about 200,000 residents -- was uninsured at some point in 2008, one of the highest rates in the country. And what is available is some of the most expensive coverage in the country.

The report comes just one day after the release of a healthcare reform bill from the Senate Finance Committee. Democratic senators, including Sen. Mark Begich, are optimistic about the bill. Republicans, including Sen. Lisa Murkowski, are less so.

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The plan has a price tag of $856 billion over 10 years and calls for sweeping insurance market reforms. It requires everyone to buy insurance, but does not include the government-run "public" option. Instead, it calls for non-profit cooperatives to create competition for the insurance market and to reduce costs.

Yesterday, Murkowski said that she'd like to see a step-by-step approach, focusing on non-controversial issues. "These would include doing away with pre-existing condition restrictions, eliminating yearly and lifetime insurance limits and seeking to reduce costs by reimbursing for quality and not quantity of services," she said.

In order to provide more immediate support, Murkowski said that she has supported expanding Denali Kid Care--a state program with federal matching funds--which would provide insurance for a family of four earning up to $82,710 annually.

Updated: The state legislature has continually failed to pass bills that would raise the rates under which familes are covered. Right now, a family of four is qualified for coverage under Denali Kid Care if they make no more than $48,252 annually.

It's also unclear what effect the pre-existing condition law that Murkowski is pushing would have on Alaska. It's already state law that workers who are covered in both large and small group policies not be denied because of a pre-existing condition. Such protections aren't afforded individuals who buy policies.

Linda Hall, director of the Alaska Division of Insurance, said that she does not require insurance companies to disclose those rejections. Premera Blue Cross, one of the two companies that control over 90 percent of the health insurance market in Alaska and last year sold individual policies to about 10,000 Alaskans, previously declined to tell Alaska Dispatch how many individuals the company rejects due to pre-existing conditions.

Some additional key facts from the Families USA report:

--For family health coverage provided through the workplace in Alaska, the average annual health insurance premium (employer and worker share of premiums combined) in the 2000-2009 period rose from $7,456 to $14,226 -- an increase of $6,770, or 90.8 percent.

Contact Amanda Coyne at amanda@alaskadispatch.com.
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