3 insurers plan to leave Alaska individual health market

  • By Becky Bohrer
  • Monday, June 22, 2015 10:12pm
  • News

JUNEAU — Thousands of Alaskans will have to find a new insurer after a shake-up in the state’s health insurance market.

Aetna and State Farm plan to pull out of the individual plan market in Alaska, and Assurant Health plans to leave the health insurance market altogether, state Division of Insurance Director Lori Wing-Heier said Monday. At the end of 2014, the companies covered fewer than 6,000 policyholders, she said. Two major insurers remain for individual policies, Premera Blue Cross Blue Shield and Moda Health.

Wing-Heier said the division was trying to contact another company licensed to write individual policies in Alaska to gauge its interest, but that company hasn’t written that kind of policy in several years.

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In a letter to Wing-Heier dated May 11, Rajini Sharma, counsel for Aetna, said the company looked at several factors in making its decision, including whether it could provide affordable plans and compete with other insurers. Coverage under existing individual policies will end Dec. 31. Aetna plans to continue selling health benefit plans in small and large-group markets, Sharma wrote.

About 190 Alaskans are affected by the change, and letters notifying them of Aetna’s plan will be sent by July 1, a regional spokeswoman, Anjie Coplin, said by email Monday. Customers will be encouraged to shop for new plans during the next open enrollment period, starting Nov. 1, under the federal health care law.

In a letter dated May 22, an official with Assurant Health notified Wing-Heier of the company’s plans, which include looking for a buyer for its health insurance business nationwide. In an email to The Associated Press on Monday, company spokeswoman Vera Carley said Assurant expects to “substantially complete its exit of the health insurance market including Alaska by the end of 2016” and will not participate in the next open enrollment period.

Assurant last week began sending letters to affected customers. It has about 5,200 individual and employer-insured customers in Alaska, Carley said by email.

State Farm wasn’t as active as the other companies in the marketplace, Wing-Heier said. State Farm media relations specialist Jordi Ortega said by email that State Farm had offered individual health insurance policies in Alaska and other states through an alliance with Assurant Health and would continue to offer a range of health-care products in the state, including individual long-term care insurance policies.

While Premera and Moda have expressed a commitment to Alaska, competition is good for any industry, Wing-Heier said. The division plans to see if other companies are interested in doing business in Alaska. The state is looking at what other states have been doing to address health care costs, and there are plans to work with stakeholder groups to find possible solutions, she said.

“Nobody wants to run health providers out,” Wing-Heier said. “On the other hand, we can’t continue to pay the prices we are. We can’t continue to pay the insurance premiums we are and we can’t afford to pay the health care costs we are.”

There has to be a happy medium for all involved, she said. “And right now, nobody’s happy.”

Premera is committed to working with the state and industry on programs that will help stabilize the market and ease the effect on rates for consumers, company spokeswoman Melanie Coon said by email. Premera has just over 8,000 individual members in Alaska on so-called platinum, gold, silver and bronze plans under the federal health care law.

The Division of Insurance last year approved rate increases for Premera and Moda, and the companies are seeking increases for the coming year, Wing-Heier said. In Premera’s case, the company has requested an average rate increase of 38.7 percent for 2016.

Premera, on its website, says it has seen an influx of new customers “with exceptionally high medical costs” and is paying out more in claims than it is receiving in premiums.

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