House approves bailout of health insurance market

The Alaska House has voted to bail out the state’s high-risk health insurance market to reduce the possibility of a collapse.

Lawmakers on Monday approved House Bill 374, which calls for subsidizing some health insurance plans with $55 million. The money will come from taxes levied on most insurance policies — including ones that aren’t health care-related.

The bill must be approved by the Senate and signed into law by Gov. Bill Walker to become effective.

Last week, the director of the Alaska Division of Insurance warned members of the House Finance Committee that without action, the state’s individual health insurance market could collapse.

“I can’t imagine in 2018 we’re going to have insurance throughout the state, if we don’t do something,” Lori Wing-Heier told lawmakers.

Wing-Heier’s warning was first reported by Rachel Waldholz of the Alaska Public Radio Network.

Because Alaska’s population is so small, it has fewer healthy policyholders to balance the costs of paying for the sick few. Aggravating that problem is the high cost of health care in the 49th state.

Insurers have repeatedly asked for steep premium increases, but the state has put the brakes on those. Wing-Heier’s division has tried to shield Alaskans from sticker shock by approving smaller increases than requested.

In response, many have left Alaska’s individual health insurance marketplace. Since 2013, three have left the marketplace, leaving only Premera, which is expected to raise rates again.

“It’s expected that in 2017, there will again be a significant increase,” said Rep. Kurt Olson, R-Soldotna.

By paying for high-risk plans — those covering Alaskans with chronic medical problems — the state is trying to discourage Premera from raising rates. The state previously offered a tax credit on such plans, and now it is attempting a direct subsidy.

Rep. Lora Reinbold, R-Eagle River, was the sole ‘no’ vote.

“This is another casualty of the failed federal government policies” known as the Affordable Care Act, she said. “It is not the Affordable Care Act; it is the unaffordable care act.”

Rep. Dan Saddler, Reinbold’s fellow Eagle River Republican, said the bill isn’t a case of propping up the ACA — it’s an attempt to keep the state from being required to set up an entire health care insurance company of its own.

If Premera withdraws from Alaska, Saddler said, the state might have no choice but to set up its own health care insurance program at a cost of hundreds of millions of dollars.

HB 374 now advances to the Senate for consideration.

More in News

Drummers perform during a celebration of the 10th anniversary of the Dena’ina Wellness Center in Kenai, Alaska, on Friday, July 12, 2024. (Jake Dye/Peninsula Clarion)
Kenaitze tribe celebrates 10 years of ‘far-fetched dream’ at wellness center

Community members recognized the work done at the Dena’ina Wellness Center over the past decade

The Kenai Safeway is seen on Wednesday, July 20, 2022. (Camille Botello/Peninsula Clarion)
Kenai and Soldotna Safeways may be sold under proposed Kroger-Albertsons merger

The local stores will be sold to CS Wholesale Grocers only if the merger overcomes suit from the FTC

Sockeye salmon caught in a set gillnet are dragged up onto the beach at a test site for selective harvest setnet gear in Kenai, Alaska, on Tuesday, July 25, 2023. (Jake Dye/Peninsula Clarion)
Draft plan published for disbursement of $11.5 million in 2021 and 2022 ESSN disasters

Public comment will be accepted for the draft spend plan until July 24

The Kasilof River is seen from the Kasilof River Recreation Area, July 30, 2019, in Kasilof, Alaska. (Photo by Erin Thompson/Peninsula Clarion)
King salmon fishing closed on Kasilof starting Monday

The emergency order is being issued to protect returning king salmon, citing weak returns

Soldotna City Hall is seen on Wednesday, June 23, 2021, in Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Soldotna’s city council appropriates funds for FY 2025 capital projects

Improvements are described for streets, police facility, Soldotna Creek Park and Soldotna Community Memorial Park

Gina Plank processes sockeye salmon caught on the first day of Kenai River dipnetting with her table set up on the bank of the Kenai River in Kenai, Alaska, on Wednesday, July 10, 2024. (Jake Dye/Peninsula Clarion)
Kenai River open for dipnetting

As of Tuesday, a total of 226,000 sockeye had been counted in the Kenai River’s late run

Assembly Vice President Tyson Cox speaks during a meeting of the Kenai Peninsula Borough Assembly in Soldotna, Alaska, on Tuesday, June 18, 2024. (Jake Dye/Peninsula Clarion)
Assembly won’t pursue further discussion on tabled bed tax resolution

Members say they’re going to work on a new version of the idea this winter

Gov. Mike Dunleavy pictured with members of the House majority after signing the fiscal year 2025 budget bills, Thursday, June 27, 2024, in Anchorage, Alaska. From left to right: Reps. Stanley Wright, Tom McKay, Thomas Baker, Craig Johnson, Kevin McCabe, Julie Coulombe and Laddie Shaw. (Photo provided by Office of the Governor)
Dunleavy signs capital budget with $3.7M in state funding for Kenai Peninsula, vetoes $3.3M

Roughly $90 million in federal funding also allocated to Kenai Peninsula

Alaska State Troopers logo.
Soldotna man arrested Friday after 30-minute police chase

The man had an outstanding warrant for felony probation violation

Most Read