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Premera: Health insurance rates for individual market will drop even lower than expected

  • Author: Laurel Andrews
  • Updated: September 20, 2017
  • Published September 19, 2017

Premera Blue Cross Blue Shield announced Tuesday that health insurance premiums in its individual market will drop by 26.5 percent on average in 2018, slightly more than what the company originally expected.

Premera's least expensive silver plan, which in 2017 cost $879 per month for a 40-year-old non-smoker in Anchorage, will cost $626 next year.

For a 40-year-old non-smoker in Anchorage on the least expensive bronze plan, the premium will drop from $703 to $526 a month.

As of May, 16,732 Alaskans were on Premera's metallic plans on the individual market. Ninety-three percent of them are eligible for some level of subsidy to reduce their monthly premiums, according to the Alaska Division of Insurance.

The decrease is slightly larger than what Premera originally filed because the company didn't initially assume that it would receive cost sharing revenue from the federal government.

The company says the decrease is due to both a significant reduction in the use of medical services from its customers and the state's reinsurance program.

In the reinsurance program, Alaska put $55 million toward propping up the individual market. That money was later reimbursed by the federal government — a move that has garnered national attention for Alaska as other states look to reduce their own premium costs.

Premera is Alaska's largest insurance provider and the only one left on the state's individual market. In 2015, three insurance companies abandoned the market, followed last year by Moda Health.

For 2015 and and 2016 plans, Premera's individual rates jumped about 40 percent. In 2017, after the implementation of the state's reinsurance program, rates rose only 7 percent.

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