Commentary

Insurance bailout buys time for state to sort out health care insurance mess

I had never heard of mucopolysaccharidosis, pronounced "mew-ko-poly-sak-a-ride-dos-is," or MPS for short, but it's one of the reasons why the individual health care insurance market in Alaska needs a $55 million bailout from the state.

The drugs to treat this incurable enzyme disorder are among the most costly medicines on the planet, running to $375,000 a year.

I don't know who in Alaska has to battle this tragic disease or any of the particulars, except that the health insurance bills stemming from one or more MPS patients in Alaska have been the single most costly claim filed in the individual health insurance market.

In a time when a short stay in the hospital can rival the cost of college tuition, that's saying something.

After MPS, the next most expensive claims in descending order are from Alaskans forced to grapple with sickle cell anemia, quadriplegic cerebral palsy, hemophilia and other blood disorders, kidney failure, multiple sclerosis, bone marrow transplants, myasthenia gravis, cancer and the care of premature babies.

These are the one percenters whom no one wants to trade places with.

Of the 23,000 Alaskans with insurance coverage through the individual market, about 500 are facing severe and chronic health challenges.

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They pay a few million a year in health insurance premiums but have medical bills of about $55 million. The system is so far out of balance that it is in danger of collapse.

The healthy Alaskans buying insurance who complain that their monthly bills exceed house payments are in that position largely because a small number of Alaskans are in desperate straits.

The cost to consumers, offset by federal subsidies for many who are not well-to-do, has been shooting up by 40 percent a year. That hasn't been enough to salvage the system, with claims exceeding premiums by tens of millions.

A few thousand a month is not much if the alternative is $150,000 a year in medical bills, but it is easy to understand the frustration of healthy people paying a few thousand a month just in case.

Those who argue the most about the Affordable Care Act, also known as Obamacare, tend to avoid the most sensitive challenge — whether hundreds of the sickest people in Alaska should be forced to become impoverished enough to qualify for Medicaid if they want health care.

No one, including the politicians suffering from Obamacare Repeal and Replace Syndrome, a chronic condition, wants to be heartless, but failing to acknowledge the problem does not advance policy changes that resemble solutions.

Now what?

The Legislature deserves credit for working with the Walker administration to devise a stopgap subsidy plan that should preserve the individual health insurance market in Alaska and provide time to try to find a more lasting solution.

The measure approved by the Senate Friday and the House Saturday, based on an idea from Kenai Rep. Kurt Olson, would divert $55 million now collected from taxes on insurance policies and use it to help cover the cost of the sickest Alaskans.

This is an increase in the state budget, no question about it, but failing to take this step would likely mean that 23,000 Alaskans would soon be without the ability to buy health insurance.

Citing heavy losses, Moda, one of only two companies providing coverage for individuals, has announced it is pulling out, leaving Premera as the only remaining option. Moda has 14,000 customers who will probably buy coverage with Premera, but without a state subsidy, the company might also stop individual coverage in a year or two.

The subsidy plan won't mean a reduction in rates but it should slow down the next rate increase expected to be announced in July.

It's important to remember that this problem does not extend to the group coverage plans in Alaska that many people have through employers.

The measure approved by the Legislature is not a long-term fix. It will buy time for the Legislature and the Walker administration and our congressional delegation to try to keep the individual insurance market alive, while allowing sick people an option other than bankruptcy.

Dermot Cole is a Fairbanks columnist. The views expressed here are the writer's own and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at)alaskadispatch.com.

Dermot Cole

Former ADN columnist Dermot Cole is a longtime reporter, editor and author.

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