The state of Alaska is about to begin considering whether to buy health insurance in bulk for state employees, municipal government employees, and the general public.
On Wednesday, the state issued a request for proposals from contractors interested in conducting a feasibility study for the state. The feasibility study would cover the creation of a “health care authority” that would have the power to buy in bulk “with the goal of achieving the greatest possible savings to the state through a coordinated approach.”
Senate Bill 74, the Medicaid reform bill, passed the Legislature in April. Among its provisions is one requiring the Alaska Department of Administration to conduct this feasibility study.
During the Legislative session, lawmakers repeatedly attempted to grapple with the rising cost of health care provided by the state. In one action during the Legislature’s June special session, lawmakers approved a $55 million bailout of the state’s health insurance marketplace. That cost covers about 500 “high-risk” Alaskans who frequently use health insurance from the Obamacare-mandated state marketplace.
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.
A unified health care authority would have the ability to provide (or buy) insurance on behalf of marketplace users and government employees. A larger pool of participants and ratepayers would theoretically lower costs for all involved.
Whoever performs the study will be required to present results to the next Alaska Legislature and finish the analysis by June 30, 2017.
