GOP health bill won’t cure what ails Alaska market, say 2 industry pros

Photo illustration by 401kcalculator.org via Flickr.

The bill to replace the Affordable Care Act is on shaky ground in Congress, drawing criticism from left, right and center in the U.S. House. Guests on “Talk of Alaska” Tuesday said the bill would do more harm than good.

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“One of the criticisms of the original Affordable Care act is that it addressed coverage but it didn’t address cost,” Becky Hultberg said. She’s the CEO of the Alaska State Hospital and Nursing Home Association, on the Alaska Public Media call-in show. “But this bill really is not addressing the cost side either. It’s just rolling back some of the coverage.”

The nonpartisan Congressional Budget Office estimates the bill would reduce the federal deficit by $337 billion over a decade, in part by shifting future cost increases for Medicaid to the states. Gov. Bill Walker has said Alaska isn’t in a position to pay more. For low- and middle-income Alaskans who buy policies on healthcare.gov, the generous subsidies would disappear, replaced by tax credits that are, on average, 78 percent less. The CBO analysis of the bill says it would leave 14 million Americans uninsured next year.

Hultberg said having a large number of uninsured Alaskans drives up costs, initially for the hospitals she represents.

“Because we will see anyone in the emergency room, regardless of their ability to pay. That is both a moral imperative and a federal mandate,” Hultberg said. “So when we don’t have people with coverage, they will be seen in a hospital, which is not an efficient way to take care of the population.”

Joshua Weinstein advises employers on health insurance options as president of Northrim Benefits Group.

“Prior to the ACA you had an individual market we had four or five players in Alaska. But we had problems, so although the rates were lower, if you weren’t healthy you could be declined coverage,” Weinstein said.

Now, Alaska’s individual marketplace now has just one insurer, Premera. The cost of premiums, without the subsidies, are the highest in the nation. Weinstein said they’d be even higher if it weren’t for state-supported reinsurance, sliding-scale subsidies and other assistance in the ACA.

“This sort of triple support system – of the state providing lower premiums for everyone, the tax credits to lower it to be a function of your income, and then further reducing your deductible and out of pocket expense – is what has allowed Alaska’s individual market to remain, and I say this sort of liberally, semi-functional,” Weinstein said.

Weinstein said the U.S. House bill would erode those pillars, destabilizing Alaska’s already unstable market. He described the potential effects in Alaska as “destructive” and “disastrous.” But Weinstein said on the plus side, the Republican proposal could help businesses by removing coverage requirements.

“There’s some opportunity for some greater creativity and flexibility in health plans,” Weinstein said. “That could potentially create more employers offering health insurance whereas now the bar may be too high in terms of costs. There are lots of repeals of different forms of taxation that will potentially create more capital out for the entrepreneurs to go and grow and be in business.”

The bill sped through two House committees last week. The next big test is Thursday, when it goes before the House Budget Committee. Alaska Congressman Don Young won’t have a chance to vote on it until it reaches the House floor, likely next week. He has not publicly announced how he’ll vote.