Alaska waiver keeps individual health insurance rates down despite pandemic

The state’s two remaining individual health insurance plan providers on the marketplace, Premera Blue Cross Blue Shield and Moda Health, declined to significantly raise rates for 2021. While Moda’s stayed close to flat, Premera filed for a slight decrease: about 4.5 percent less on average. For a consumer on the average Bronze plan through the health insurance marketplace, that’s about $435 a month compared to $448 last year, and down about $100 a month since 2018, according to the Kaiser Family Foundation.

That program played a major role in Moda Health’s decision to reenter the state market in 2020, said Vice President of Strategic Marketing Jason Gootee. The Oregon-based company withdrew from the state in 2016, citing difficult a financial situation in the Alaska market, but filed again to reenter the market in 2020.

“I would say (the reinsurance program) was one of the driving reasons that it made sense for us to reenter,” he said. “When we left the market, we had a considerable amount of business footprint in Alaska … it was a hard decision to make to leave the individual when we did, but it was necessary due to the financial situations of that market. We were seeing double digit rate increases for consumers every year.”

That nonprofit then uses the broader individual market to spread out the costs for those individuals, lessening the cost to individual insurance providers. Since the program took effect, Premera Blue Cross Blue Shield, which remained the sole insurer in the marketplace from 2017-20, has lowered its premiums on the individual market for several years.

The state is set to receive about $78.5 million from the U.S. Department of Health and Human Services to support the program, according to a March 1 announcement from the Alaska Division of Insurance. The announcement notes that about 84 percent of Alaskans on the individual market qualify for subsidies through the insurance marketplace.

The reinsurance program is, however, a waiver program, riding on the federal government’s approval to continue. Gootee said it’s speculative whether Moda would remain in the marketplace should the reinsurance program be discontinued, but the company has been in the Alaska market since 2004 and would like to remain there.

Since reentering, Moda offers plans only in the Southcentral communities of the Mat-Su, Anchorage and the Kenai Peninsula, as well as Fairbanks and the Ketchikan and Prince of Wales Island areas. That covers a significant part of the population, and Gootee said the company hopes to phase in other areas of Southeast in coming years, largely depending on the development of network partnerships.

The COVID-19 pandemic threw a curveball into the health care industry in multiple ways, particularly in how non-emergency services were used. That was one sector of the industry that dropped, particularly after Gov. Mike Dunleavy’s emergency mandates blocking elective procedures in spring 2020 to maintain hospital capacity in the early days of the pandemic.

Gootee said it was too early to say what Moda’s rates would look like, but that the company’s 2021 rates did take effects of the pandemic into account and that the 2022 rates were “looking good.” He said one thing that changed everywhere during the pandemic, including Alaska, was a significant increase in the use of telehealth, which has been identified as a less expensive alternative to providing care.

“I think every carrier is taking their own different approaches to it, in terms of how you account for the pandemic,” he said. “It certainly has changed the health care world quite a bit. In some cases you saw utilization go way down and then spike right back up. In both (Alaska and Oregon), telehealth utilization just skyrocketed. It’s stayed relatively high.”