The Alaska Legislature has approved the Senate version of a $55 million insurance bailout bill. In a 24-10 vote Saturday, the House agreed with changes made in the Senate and sent the bill to Gov. Bill Walker, who must approve it before it becomes law.
House Bill 374 calls for the diversion of insurance taxes to cover the medical needs of about 500 “high-risk” Alaskans. The cost of caring for these people, who suffer from chronic medical conditions, are believed to be a significant driver in the repeated steep rises in health insurance premiums for Alaskans who are a part of the health insurance marketplace set up by the federal Affordable Care Act.
The bill had widespread support in the House, which approved the bill earlier in the week, and the Senate, which approved it on Friday, but members of the House minority objected to a two-year sunset provision in the bailout bill that was inserted by the Senate.
Rep. Sam Kito III, D-Juneau, and other members of the minority said that if the bailout is intended to encourage insurance companies to participate in the marketplace, the two-year timeframe isn’t enough.
“I think this is going to tell health insurance companies that no, we’re not quite open for business,” Kito said.
Since 2013, Alaska has lost all but one participating insurance company in its marketplace. The issue is the cost of care for people who use their health insurance frequently. Alaska has a low population and too few healthy ratepayers are participating in the marketplace to offset the cost of frequent users. As a result, companies have been unable to raise their rates enough (or fast enough) to avoid recording significant losses in Alaska.
The state previously offered a 50 percent tax credit for insuring “high risk” Alaskans, and HB 374 replaces that with a direct subsidy.
• Contact reporter James Brooks at james.k.brooks@juneauempire.com.
