The following editorial first appeared in Ketchikan Daily News:
Competition is healthy.
That one of only two companies offering individual health insurance policies to Alaskans is compelled by costs to exit that market is sickening.
Moda Health will leave the market to Premera Blue Cross Blue Shield, effective Jan. 1.
But, what else can Moda do? It cannot afford to stay. It has about 14,000 individual members, and the cost of providing their insurance exceeds the amount the company collects in premiums.
The crux of the problem is high claim costs and a small Alaska market to meet the expense.
Increasing Alaska premiums won’t solve the problem; health insurance companies made a case and the state agreed to recent rate increases of up to 40 percent.
Moda isn’t entirely alone. Premera has experienced a similar problem with expenses in the individual market.
Gov. Bill Walker has proposed allowing the costliest claims to become part of all markets, effectively creating a larger pot to share the expense.
The concern is that that would increase the expense in other markets, and, in a state with a relatively small population, not really solve the high cost of premiums in Alaska.
States such as Alaska need a bigger market. That would entail knocking down commerce barriers between states by allowing health insurance companies to mix Alaskans in with all other Americans to determine premiums and share the expense in a greatly larger pool.
The effect would be increased competition and more opportunities for health insurance. Not only health insurance companies, but the consumer would benefit. As would the governments.
Alaskans should be able to acquire health insurance at affordable premiums in a competitive market.
