The latest version of the health care bill in the U.S. Senate has a special carve-out to help Alaska’s individual insurance market. The bill, revealed Thursday, would send more than $100 million a year to any state with extra-high premiums. As it’s defined now, that’s only Alaska.
The provision is a sweetener that seems designed to win the support of Alaska’s uncommitted senators for a bill to reform President Obama’s signature health care law.
Hundreds of reporters and photographers mobbed in Capitol hallways, flocking to senators going to and from meetings with Senate Majority Leader Mitch McConnell and Vice President Mike Pence. They are scrambling to get 50 Republican votes to support the bill.
Reporters spotted Sen. Lisa Murkowski going into a meeting.
“Do you think that leadership has listened to your concerns?” one reporter asked.
“I don’t know. I don’t know,” Murkowski said. “That’s why it’s going to be important to see what’s actually included this morning.”
Murkowski knows every hidden passage in the building and afterward, she made herself scarce.
Sen. Dan Sullivan said late Thursday he hadn’t had a chance to read the entire bill yet so he couldn’t say how he’d vote.
“On the motion to proceed, I’m not making any comment until I get through it and understand it,” Sullivan said.
But Sullivan said he likes that the bill has a big increase in funds to help states stabilize their insurance markets.
“And then there’s what I’m referring to as a safety valve for states with extremely high premiums,” Sullivan said.
Health care policy wonks at the Capitol are calling it the “caribou kickback.” (That’s a riff on “cornhusker kickback,” a deal offered to a Nebraska senator back in 2009, to win his support for President Obama’s health care bill.) Other names were also in circulation: Klondike kickback, polar payoff.
Safety valve, carve-out or kickback, here’s how the provision works: It would send Alaska — or any state that has insurance premiums that are 75 percent higher than the national average –1 percent of several big buckets of money, to help bring costs down for Alaskans who buy their own coverage.
The bottom line: The bill seems to guarantee Alaska and its insurers about $150 million next year, rising to $240 million by 2021. But if the price of Alaska’s insurance falls, and is no longer 75 percent higher than the national average, that money would no longer be reserved for Alaska. The Health secretary would decide how to spend it, along with the larger funds it is part of.
(The money would apparently be in addition to the “innovation waiver” the federal government granted this week for Alaska’s reinsurance program. That would send about $48 million to Alaska next year.)
All of that money is aimed at the individual market, roughly 25,000 people. Far more Alaskans, about 190,000, are covered by Medicaid, and the bill would make big changes to that program. Sullivan said it’s not clear to him yet what the effects would be in Alaska.
“And I’m not trying to dodge. I just really need to dig into it,” Sullivan said. “There’s some issues that I’ve been very focused on, on the Medicaid side that I don’t have an answer to yet in this draft because I haven’t fully gotten through it.”
Supporters of the bill object to the term “Medicaid cuts.” They say it would slow the rate of Medicaid growth. Opponents say the bill would take billions of dollars out of Medicaid, which covers the poor, disabled people, many nursing home residents and a lot of children.
Aviva Aron-Dine, a former health care official in the Obama administration, said Alaska wouldn’t fare well under the Republican bill, even with the 1 percent carve-out for the individual market.
“The answer is Alaska would still lose big from this bill as a whole,” Aron-Dine said. “That’s because it’s hit very hard by both the Medicaid provisions of the bill and exceptionally hard, the hardest hit state, by the marketplace provisions.”
As she calculates it, the carveout could send Alaska $1.12 billion over 10 years. But she says the bill would cost Alaska more than $3 billion in Medicaid alone.
Sen. McConnell said he wants to hold a vote on the bill next week.