Op-Ed: Alaskans Deserve a Fix for Obamacare

It has now been more than four years since then-Speaker of the House Nancy Pelosi explained to Americans why she had to push the health care reform bill through in such a rush: “We have to pass the bill to find out what’s in the bill ... and get away from the fog.”

Now it is 2014, the fog is lifting, and we are watching the “Affordable Care Act” (ACA) fall apart under its own weight, and contradictory legal interpretations. The Obama administration has now unilaterally delayed or changed over 30 of the health care law’s provisions. Earlier this month, MODA, one of Alaska's two health care insurance providers, announced it would not extend noncompliant "bare bones" policies past this year. Of course, they would not have been put in the position to offer these policies in the first place if the president had not postponed a piece of the law for two years to keep his “If you like your health care, you can keep it” promise from becoming demonstrably untrue -- at least until he is on his way out of office.On the legal front, it is unclear who is eligible under the law for subsidies -- premium tax credits -- to help defray the cost of health insurance. In July, the Court of Appeals for the D.C. Circuit ruled that only those who purchase insurance through state-based exchanges may qualify for subsidies, while the Court of Appeals for the 4th Circuit held that subsidies may also be applied to plans purchased through federally facilitated exchanges (i.e. the national Healthcare.gov site). Given the split in the circuits, this issue could reach the U.S. Supreme Court, but that just means more uncertainty for the time being.

We also recently saw the Alaska Division of Insurance announce that “rates for health insurance plans covering nearly 16,000 Alaskans will increase substantially in 2015 as a result of the Affordable Care Act.” In 2015, Premera Blue Cross insurance rates will increase between 35 and 40 percent, and the middle "Silver" plan will see an increase of 37 percent on average. According to the Alaska Director of Insurance, Lori Wing-Heier, MODA premiums will increase between 22 and 28.8 percent. The agency also announced that even with these cost increases, the health insurers were still going to be losing millions of dollars.

How did we get here?

If you remember back to 2009, the health care law was sold on a promise to reform our nation’s health care system, reduce premiums for families by $2,500 a year, and make health care more accessible and affordable for all Americans. That sounded great then and sounds great now, but unfortunately these promises have not come to fruition for many Alaskans. Four years later, we have dealt with a botched website, skyrocketing premiums, greater out-of-pocket costs, and employers dropping coverage and sending employees to state-based or federally facilitated exchanges instead of complying with burdensome and expensive federal mandates.

The key reason I opposed the health care law when it was proposed and jammed through Congress? Not politics; just simple math. The basic economics of being a high-cost rural state with limited providers has resulted in the costly outcomes we are seeing today. Like storm clouds approaching on the horizon, this was a problem many people could see coming. With the mandate to require that every Alaskan buy coverage -- or force them to pay a tax -- the ACA was doomed to fail our state and make health care coverage even less affordable. In high population states with many providers and participants, expenses can be spread out across thousands or millions of residents; but in Alaska, just a few expensive medical cases can ripple across the state and hit Alaskans’ pocketbooks.

If you have been watching this debate unfold, you are likely aware that enrolling young, healthy Americans in the health care exchanges is the key to making the equation work. These "young invincibles," as they are referred to by policymakers, would pay their premiums, be less likely to need care and stabilize the overall cost structure. Before enrollments got underway, insurance providers said they needed a third of Alaskans between the ages of 18 and 25 to enroll, however, only 9 percent have done so. When you look at the costs involved, it is tough to blame them. For example, MODA premiums for 19-year-old Alaskans increased in all three categories: up 55 percent in the basic "Bronze" category and double for the "Silver" plans -- from $1,092 per year in 2013 to $2,268 per year in 2014.

Health insurance costs for younger Alaskans have increased the most because the ACA prohibits insurers from charging a 64-year-old more than three times the premium they charge a 21-year-old -- so the entire formula gets inflated. Worse still, the law imposes an added, costly tax referred to as the "Cadillac Tax" on high-dollar insurance plans -- meaning most of the plans available to older Alaskans -- which tacks on an added 40 percent charge to insurance plans valued at $10,200 (individual) and $27,500 (family) starting in 2018.

Even before the premium increase was announced, Jason Gootee -- the head of MODA’s Alaska operations, said, “An independent actuarial study commissioned by the state in 2012 projected premiums to rise between 30 percent and 80 percent. The one piece of good news for Alaskans is that a high percentage of them who purchase through the exchange qualify for a subsidy.” But, a policy that forces Alaskans to utilize government subsides should not be considered sound policy -- and I have heard from many Alaskans who do not like being put in the position of asking for a subsidy for a basic expense like health care.

With more troubling data from the Alaska Division of Insurance coming out regularly about the surging costs, providers are acknowledging that the economics are not working out and Alaskans are paying the second-highest premiums in the nation. According to Eric Earling, spokesman for Premera, “We’ve been working on a number of initiatives to control rising medical costs in Alaska, but major challenges exist. We’re very concerned about that impact on our customers and all Alaskans. The Affordable Care Act adds more to the cost of healthcare coverage and the cost of the ACA’s individual market changes in states with smaller populations like Alaska is not sustainable without action.”

This means many Alaskan individuals, families and employers are asking tough questions: Do we make cuts to our family budget to buy health insurance? Do we skip buying health insurance and pay the tax instead? As a small employer, do I drop coverage for my employees because of all the federal mandates? Alaskans deserve better.

Doctors are required to take the Hippocratic Oath before they practice medicine, which boils down to, first, do no harm. Unfortunately, this bill to create "affordable care" is causing real harm to thousands of Alaskans, whether by premium increases or the real risk of a detrimental change in employment or benefits.
The Affordable Care Act has evolved from a controversial partisan power play to a late-night punchline to a major economic drain on our state. Alaskans deserve true health care reform that cuts costs and improves access to services. I will continue to fight for this Alaskan priority in Washington, D.C.

By:  By Sen. Lisa Murkowski