Health care increases slowed by $55 million in state funds



The President and White House Staff react to the House of Representatives passing the bill on March 21, 2010.
President Obama and staff react to the House of Representatives passing the Affordable Care Act on March 21, 2010.

Health care inflation was 1.3 percent nationally in 2015.

But the last company standing in the Alaska health insurance market, Premera Blue Cross, is raising its rates by 10 percent for individuals — you know, the individual Alaskans who have no choice but to purchase from Premera.

Yet the company is tickled pink. It’s thrilled to announce that, for the first time in three years, it is not having to raise its rates by more than 35 percent. We’re supposed to be cheering the slowdown in insurance increases.

Why so little, when it was predicted that rates would soar by more than 40 percent?

It’s because the State of Alaska has kicked in $55 million this year through Governor Walker’s House Bill 374. The money came out of the General Fund.

HB 374 pays the costs of between 450-500 very expensive patients. Those patients are part of the “risk corridors program” and they are supposed to be picked up by Obamacare (the Affordable Care Act), to be paid directly to the insurance companies.

But the federal government reneged, just as Obamacare opponents said it would do.

In fact, the feds only paid 12 percent to Moda in the Alaska and Oregon markets, leaving the company no choice but to sue the Center for Medicaid and Medicare Services (CMS) for $180 million, for Fiscal Years 2014 and 2015 for Oregon and Alaska. That will cover the 88 percent the company didn’t get paid when the feds stiffed the bill. The lawsuit is pending now, and Moda has left the Alaska market where it took such a haircut that it practically went under.

Why did the state pick up the $55 million in funding for these sick individuals rather than let Obamacare just collapse?

The people in Alaska were facing another 40 percent increase to cover these “risk corridors” and higher cost of Alaska health care. They were in revolt.

Some 23,000 people in Alaska buy individual insurance on the exchange, (far less than had been promised) which is now composed of just one company — Premera.

Those people were fed up. The State of Alaska knew that thousands would walk out on the individual market because they could simply not afford it. It was better to pay the IRS a pound of flesh. Gov. Walker and the Alaska Legislature made a policy decision to save Obamacare in Alaska.

Without the State General Fund picking up more of the cost of health care, the public would have seen a 120-150 percent increase in their health care insurance in just three years.


The individual market has crashed spectacularly. The collapse was predicted by a few conservative analysts in Alaska, but they were drowned out by the protestors who said Obamacare would all work just fine, save the state money. This was the Walker mantra as well, as he expanded Obamacare Medicaid.

The $55 million with which Gov. Walker paid off Obamacare has saved the system for one year, but next year rates will climb again.


Before Obamacare was enacted in Alaska, there were plenty of groups clambering and protesting to force it into a state so small that our population is that of a medium-sized city. We never did have the population to support an exchange.

Where are those pro-Obamacare groups now? Where is the hospital association, the primary care association or the tribal health care executives? Why don’t they show up and help fix the gigantic problem the state faces?

They have disappeared, the Affordable Care Act is still broken, and the $55 million is simply a band-aid that has received precious little fair coverage in the media. Alaska will have to cough up even more next year for the “high risk corridor” reinsurance program. Over the next four years, the State will cough up the money time and again.

And so it goes, the rolling collapse of Obamacare is well under way.