Op-Ed: Health Care Reform Leaving Alaska Care Far From Affordable
The Affordable Care Act has unfortunately become one of the most ironically named pieces of legislation for Alaska in history. Affordable for whom, exactly? Insurance costs here in Alaska continue to rise as Alaska’s health care providers are struggling to work within the law for our high-cost, high risk state. Last month, we heard news that Premera needs to increase premiums by 38 percent for 2016; MODA also intends to increase its premiums by 30 percent in 2016 — this on top of double-digit increases last year.
This problem will likely become worse, because Aetna, State Farm and Assurant Health have just pulled their products off the individual market, leaving more than 5,400 Alaskans hunting for new coverage. Two of these companies are leaving the state because they cannot cover the cost of providing care in Alaska. The decreased competition will almost certainly lead to a further increase in prices going forward.
I have opposed the law from day one because the numbers do not pencil out for a state like Alaska with a small population and limited providers. When a particularly complicated medical problem happens to an Alaskan, the money it takes to address that situation is spread across a small number of us. While in the urban Lower 48, which is the entire focus of this law’s attention and energy, that expense is spread across a far greater number of people. It’s really that simple. This is easily demonstrated by the issues Premera is dealing with. In the first quarter of 2015, just 37 people were responsible for approximately about 40 percent of the total claims paid out.
The law has done little to reduce the cost of health care or improve its quality. The ACA is more about requiring Americans to purchase health insurance that has become more expensive, not less. The law is a complex maze of minutiae, with mandates piled on mandates, strung through with a tangled web of taxes, fees and penalties that all serve to drive up the cost of health care. The Obama administration has unilaterally announced 32 separate changes or delays to the law. Yet when members of the Republican Party ask for more consideration on issues like defining the full-time work week as 40 hours or delays to especially problematic parts of the law, the silence is deafening.
The country needs to address the cost of care, not just force people to buy insurance. One example of how we could bring down costs is requiring hospitals to make public the cost of tests, procedures, overnight stays, and other services. Giving patients knowledge and allowing them to shop for care as they would any other major purchase would force hospitals to compete in terms of both price and quality.
The next steep increase in the cost of care in Alaska will be the so-called “Cadillac Tax.” This provision is more proof this law failed to consider the realities Alaskans face. The “Cadillac Tax” is a 40 percent excise tax on the value of a health care plan more than $10,200 for an individual, or $27,500 for family coverage. Premera tells me 62 percent of its customers fall into those categories, at the average yearly cost of $420 per plan in 2018, the first year the tax will take effect. It will only get worse from there, as the ACA continues to drive up prices. This tax will be felt by school districts, boroughs, the state and unions. These organizations will be forced to shell out huge amounts of money, and they will be forced to do so simply because they provide quality health insurance to their employees.
Currently, the entire country is waiting for the Supreme Court to hand down its decision in King v. Burwell, the case that will determine if the Obama administration violated the law by allowing subsidies to flow to people in states that did not create a state-based exchange. The loss of these subsidies would be devastating for many families across the country, and more than 16,000 Alaskans, who have come to depend on them. We need to protect these people, not the failed law.
That is why Republicans are looking at a plan that includes extending the subsidies for a period of time if the Supreme Court rules in favor of the King plaintiffs. This will allow for a smooth and stable transition away from the ACA without throwing people off their insurance.
The priority moving forward must be giving states the flexibility and individuals the freedom to decide for themselves what coverage they need. It makes no sense to force people through mandates to pay for coverage they do not want and will never use.
I will continue working with my colleagues in both the Senate and the House toward crafting meaningful legislation that will ensure minimal disruption to the millions of families who cannot bear to lose their insurance, and restore at least a measure of freedom to the lives of Alaskans when it comes to our health care choices.