ANCHORAGE — Alaskans buying health insurance on the individual market will see a decrease of 26.5 percent in rates next year, the sole insurer in the state announced Tuesday.
Alaskans had been paying some of the highest premiums in the nation.
Premera Blue Cross Blue Shield attributed the decrease to a significant reduction in the use of medical services and the state’s establishment of a program to address high claims separately, called reinsurance.
Premera’s announcement “shows that my team’s out-of-the box thinking in creating the Alaska Reinsurance Program — approved by the Legislature — has paid off,” Alaska Gov. Bill Walker said in an email statement.
“It also supports a need for Congress to fully examine the impacts of any changes to the Affordable Care Act, which enabled the creation of this program,” said Walker, an independent who favors a bipartisan approach to healthcare overhaul.
The decrease could mean nearly $200 a month more in the pockets of Alaskans who buy on the individual market.
For example, a 40-year-old nonsmoker living in Anchorage on the company’s lowest level plan with a deductible of $5,250 would see insurance rates drop from $703 a month this year to $526 a month next year, Premera spokeswoman Melanie Coon said.
“We think it is showing that our market is becoming somewhat stable,” said Lori Wing-Heier, director of the Alaska Division of Insurance.
“We’re hopeful it will attract another insurer or two back into Alaska,” she added.
The president of Premera’s Anchorage office said it was too soon to assume the lower rates are the start of a trend.
“However, we believe the state’s reinsurance program without question has contributed to a more stable and affordable individual health insurance market,” Jim Grazko said in a statement.
It’s the first time the average rate has decreased under the current federal health care law in Alaska, where high health care and premium costs have been an ongoing concern. Rate increases had previously been as high as 40 percent, but stabilized a bit in 2017, which saw a 7 percent increase.
There is a chance next year’s rate could still change.
Premera said the current decrease assumes federal cost-sharing reductions will remain in place. They are included in the current bill being considered to replace President Barack Obama’s health care bill, but the Trump administration doesn’t support them, Wing-Heier said.
If those subsidies were to be stripped out, the decrease would be closer to 22 percent.
From the Alaska Journal:
Premera first released its 2018 rates in August assuming the CSR payments would not continue.
The reinsurance program was initially funded by the state for 2017 with $55 million in fees collected from insurance policies. A Section 1332 “innovation waiver” under the Affordable Care Act granted to Alaska will have the federal government paying about 80 percent of the cost, or $49 million, with the state kicking in $11 million for 2018.