JUNEAU, Alaska — The federal government has approved a proposal intended to help stabilize Alaska’s individual health insurance market.
State leaders hailed the news, with Gov. Bill Walker saying it will provide relief from large premium increases for the 23,000 Alaskans on the market.
The state last year established a program to address claims for certain high-cost conditions in an effort to stem what had been a continued double-digit rise in premiums. Rather than have the costs of those claims spread across Alaska’s relatively small market, they were to be paid through a tax that insurance companies already paid.
The state, which is down to one insurer on the individual market, had been bracing for a potential average increase in premiums of about 40 percent before the program was created. Instead, the Division of Insurance said rates increased by about 7 percent.
The state asked for federal help in keeping the program going, arguing that the program will save the federal government millions of dollars in subsidies that many in the individual market receive to ease their premium costs.
On Tuesday, the federal government approved the state’s request. Walker’s office said this will bring in about $330 million in federal funds to help shore up the program over the next five years.
The state hopes that if the market is stabilized it could lure other companies to Alaska to serve the individual market.
Alaska U.S. Sen. Dan Sullivan called this a positive development but said work remains in providing affordable health care for all Alaskans. His spokesman, Mike Anderson, said the news, while welcome, is “not a silver bullet by any means.”
Congress is debating overhauling the existing federal health care law. Senate leaders planned to unveil a new draft as early as Thursday.
Alaska’s senior senator, Lisa Murkowski, has expressed frustration with the Senate’s process in drafting a bill and concerns about the bill’s impact on Alaskans.