State individual health insurance market could collapse next year, says insurance director

State individual health insurance market could collapse next year, says insurance director

State individual health insurance market could collapse next year, says insurance director Alaska Insurance Division director Lori Wing-Heier warned legislators Thursday that the state’s individual health market is at risk of collapsing as soon as next year.

Wing-Heier’s delivered her statement as lawmakers considered a bill to use the state’s high-risk insurance pool to stabilize the market, Alaska Public Media reported. The insurance bill would tax health insurance plans across the market to cover a portion of the costs of insuring high-risk patients.

With Moda Health’s exit from Alaska’s individual health insurance market next year, the state only has one health insurer left: Premera Alaska.

“I can’t imagine in 2018 we’re going to have insurance throughout the state, if we don’t do something,” Wing-Heier said to the House Finance Committee.

She reasoned that her doubts were due to the state’s small pool of policyholders and high costs for insurance.

In recent times, insurers in Alaska had to implement back-to-back rate hikes to offset the losses they suffered, hurting customers at the same time. Wing-Heier said that another increase could be expected next year, but the hike would probably be not enough to cover Premera’s losses.

If lawmakers manage to pass the bill, it could lower Premera’s expected rate increase from 40% to around 25%.

Wing-Heier stressed that the state would need more solutions to its health insurance problem, as the bill only addresses a short term issue. This has led to legislation to consider requesting a waiver from the federal government to design an alternative health insurance system.

“The Affordable Care Act was written as a one size fits all. And it doesn’t necessarily work for Alaska. We’re much more rural than we are urban. We’re further away from a lot of the metropolitan centers…so we think there may be some things we can do that will bring the cost of health insurance down for Alaskans,” Wing-Heier remarked.

Gov. Bill Walker included the insurance bill in the agenda for the current special session.

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Insurance Director tells lawmakers individual market could collapse