Alaska's biggest health insurance provider is asking to raise its rates on the individual marketplace by more than 25% for next year.
That's as Premera Blue Cross Blue Shield of Alaska's rates on the marketplace have already nearly doubled over the past five years, according to recent reporting by the Anchorage Daily News.
Premera insures more than 18,000 Alaskans, and there are concerns that such a huge spike in the cost of insurance will cause many to become uninsured.
ADN reporter Iris Samuels has been following the trend and says the expiration last year of what are called enhanced premium tax credits already pushed some Alaskans off the health insurance rolls.
This interview has been lightly edited for length and clarity.
Iris Samuels: When you have healthy people dropping out of the marketplace, what that means is that the plan becomes more expensive for everyone. Because only the sickest people, the people that really, really need insurance, that cannot go without because they have a chronic health condition or whatever it may be, keep their insurance plans. And that's what's driving that expected increase. That's part of what's driving that expected increase next year.
Casey Grove: You talked to some folks about this, this idea that they are sort of subsidizing other folks that are using health insurance more. So if you don't go to the doctor, and you don't need medication throughout the year, that pool is getting money from you, and other folks are using that health insurance. And it it sounded like at least one of the the people that you talked to didn't want to be a part of that anymore.
IS: Think about it this way: Many Alaskans maintain home insurance that will cover their home in case there's a fire. And because everyone pays for home insurance, that one family that was struck by misfortune and had their home burned down, they can get money from the insurance company, and that's thanks to all of us pitching in.
So that is essentially how health insurance is supposed to work as well. But when plans become so prohibitively expensive, then people that can afford to go without — younger people, healthier people, people who really don't expect to have a catastrophic health event — they will say, "Oh, I'm going to opt out of the market," and then the burden of bearing the costs of healthcare really falls on the people that really can't avoid it, because they have that kind of chronic health condition, or they're getting older and they know that they need care more regularly, and they really can't avoid having health insurance.
CG: So maybe we should try to quantify this. And I know it's different for different people, and we're talking about folks that are buying insurance through the marketplace. There are different plans there. Forget next year, but just so far, how how much has it gone up?
IS: So the (Alaska) Division of Insurance actually lets us know what the average premium is for an Alaskan in the individual marketplace every year. Five years ago, I think it was $700 and something a month. That was the average premium, and now it's around $1,100 a month on average per covered Alaskan in the individual marketplace. So you can think, in the course of five years, that cost has almost or is getting close to doubling.
CG: And then for next year, it sounds like they're going to increase further. Do we have any sense of how many people are going to be either leaving the marketplace or that might become uninsured?
IS: So the data always lags, but the latest information we have indicates that around 3,000 fewer Alaskans are enrolled in plans through the individual marketplace this year relative to the same time last year.
One thing that I've heard from people in the healthcare industry is that sometimes it takes a while for people to to realize the magnitude of the increase if they're no longer qualifying for those subsidies, those federal subsidies that expired. So for a couple months, they may be OK with paying, let's say $3,000 a month in premiums, and then they may realize that it's eating into their budget that they need to be spending on other things, and they may decide that insurance is the one thing that they can drop.
And in the story that I recently reported, we heard from one person who was really saying that that was something that he was considering. That he's been paying for this plan since the beginning of the year, and he's paying significantly more than he paid last year, and he's been biting the bullet. But he may choose to drop it in the middle of the year, and that's something that people covered through the individual marketplace can do. And we may see, as the data comes in, we may see that far more Alaskans are dropping their insurance.
CG: So here in Alaska, where do we go from here? What's coming next? I guess this increase for next year is on the table. Where do you see that going, and and what do you see the impacts of that being?
IS: I mean, it's fairly mind-boggling, and I think we're seeing this across the board, there are Alaskans who are experiencing it in terms of stagnant wages, because employers have to spend more of the money that they have available in compensating employees on health insurance, which means they have less to provide for wages. So it's having huge, huge, huge impacts on the Alaska labor market.
You know, five years ago, the amount of money that Alaskans were paying for health insurance seemed crazy, and now it's almost double. In a sense, many Alaskans are being held hostage, and people who aren't on the individual marketplace who get excellent health insurance from their employer may think, "Oh, this doesn't apply to me," or people who rely on on Medicaid or other forms of federal insurance, but it really applies to all of us, because when you get a larger share of the population that is uninsured, eventually one of those people is going to break an arm or get diagnosed with an illness that has to be treated. And when they don't have insurance, they tend to go to the hospital, and the hospital has to treat those people. It won't turn them away. And then the hospital seeks to compensate for providing care to those people without any compensation by raising rates that it charges those of us who do have insurance. So we're all paying the price for this.