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Alaska division crosses line with campaign pitch on health insurance

  • Author: Dermot Cole
    | Opinion
  • Updated: September 28, 2016
  • Published September 6, 2014

FAIRBANKS— At first, I thought the press release must have come from the re-election campaign of Gov. Sean Parnell, or the campaign of GOP Senate candidate Dan Sullivan.

It was headlined, "Alaska health insurance rates to increase substantially due to Obamacare." The text said "historic rate increases" are in store because of same.

The press release reflects the long-established Parnell policy that the Affordable Care Act is making life worse in Alaska and the statements by Sullivan that he wants to repeal the law and allow "market forces" to cut costs.

Standard campaign fare, and fair enough. But the press release did not come from the campaigns of either Parnell or Sullivan.

It came from the state Division of Insurance and the Alaska Department of Commerce, Community and Economic Development.

This may come as a complete shock, so prepare yourself: After a long and rigorous review, the state agencies have concluded that Parnell has been right all along about Obamacare.

"His concerns are, unfortunately, proving to be true," Susan Bell, the commerce commissioner, is quoted as saying about her boss.

Crossing the line

What's really unfortunate is that the state agency has crossed what should be a clear dividing line between governing and campaigning.

The job of the state Division of Insurance, plastered at the top of its website, is clear: "The mission of the Division of Insurance is to regulate the insurance industry to protect Alaskan consumers."

Its mission is not to protect the Parnell and Sullivan campaigns with the release of misleading documents long on advocacy and short on analysis.

The gist of the state press release is that Obamacare is evil, responsible for what will be "historic rate increases" of up to 37 percent next year for some thousands of people in Alaska. The press release does not make it clear that this is not about Alaskans who have coverage through their employers.

The press release says that for the "individual market," the state does not have the power to order an insurance company to violate federal law and reduce coverage or reject payments created by "high health care utilizers."

Let's look more closely at this. First, if the odious mandates are the requirement to cover adult children up to age 26, requiring that people buy coverage, and the rule that pre-existing conditions can no longer be a reason for denying coverage, then those should be spelled out by our insurance regulating agency. Referring to them as "federal mandates" is a misleading dodge, as almost no one likes being ordered about.

The term "high health care utilizers" is antiseptic and impersonal, conjuring up images of deadbeats, people who never stop utilizing.

"The combination of high health care utilizers and the impact of new federal mandates created a very large expense that is too big to be spread across participants without a significant increase in rates," Division of Insurance Director Lori Wing-Heier said in the press release.

Utilizing the utilizers

A more revealing statement about "utilizers" came from Premera Blue Cross, one of the two major insurance carriers handling individual plans: "Between Jan. 1 and June 30, 2014, we had more than $7 million in medical claims from only 33 Alaska members on individual plans under the ACA. That's roughly one-third of all the medical claims costs for all 7,000 members on our individual plans under the ACA."

So we have 33 utilizers who deserve bureaucratic scorn.

But I suspect that what we really have are 33 Alaska families being torn apart by severe emotional and financial burdens from life-threatening illnesses, 33 families tortured by the threat of losing a loved one. You run up bills of that magnitude with extended stays in the hospital or expensive treatments that would bankrupt most people.

Has the state agency responsible for protecting Alaskan consumers on insurance rates done anything to help other than refer to them as "high health care utilizers"? It ought to get this out in the open, stop utilizing jargon and see if anything can be done.

The insurance agency said it conducted a rigorous, "thorough and lengthy review" of the proposed rates and went over them with a "fine-toothed comb." I asked for a copy of the thorough and lengthy public report that must have been produced to reach these conclusions.

There is no report, and the details of hundreds of pages of insurance filings are confidential until they take effect Jan. 1.

Reporting by Laurel Andrews of Alaska Dispatch News has provided some insight into the situation, however.

It turns out that the numbers in the press release about how many Alaskans might be hit with 37 percent rate increases are misleading. And the document does not mention that there is a lower-cost alternative, as rates from Moda Health are lower than that of Premera. A spokesman for Moda says, "Our coverage is in every way equal to or better than that offered by our competitors."

Still expecting a real report

Alaskans have the right to expect a real report from the Division of Insurance and the commerce department.

This report ought to include a clear account of the options for consumers, as well as an analysis about the pros and cons of the decision by Parnell to not seek a federal grant to create a better rate review process in Alaska. Has the administration contributed to the problem of rising costs by taking steps to inhibit the implementation of the law? It would require a thorough and rigorous report by insurance experts to say for sure.

Other states have insurance divisions that conduct public hearings, offer educational information to consumers and subject industry plans to scrutiny to make sure they are accountable.

The Alaska Division of Insurance says its process is just fine and it didn't need to create a better one with federal money. But all we have is a campaign press release saying the governor has been right in objecting to the law and doing what he can to inhibit its implementation.

That's no way to ensure better health care in Alaska. It's a way to ensure continued confusion instead of a search for a solution.

Dermot Cole, based in Fairbanks, is a longtime reporter, columnist and student of Alaska history.

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.

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