Alaska senators take input, share thoughts on fixing Obamacare

  • Alaska U.S. Sen. Dan Sullivan speaks to members of the Alaska Chamber on Feb. 22 at the Petroleum Club in Anchorage, where he heard their concerns about the Affordable Care Act, also known as Obamacare. Repealing and repairing the law has become a challenge for congressional Republicans after years railing against the law as they try to preserve popular parts while fixing what isn’t working for states like Alaska. (Photo/DJ Summers/AJOC)

Alaska’s senators know the Affordable Care Act has not lived up to its name in the state, but they aren’t willing to toss the baby out with the bathwater just yet.

Over the last week, Sens. Lisa Murkowski and Dan Sullivan addressed lawmakers and business leaders about the controversial healthcare provision, taking a softer tone of “repair” rather than the hardline call of “repeal” some of their Republican fellows take.

Sullivan dropped by the Anchorage Petroleum Club on Feb. 22 to talk about his intent to follow Republicans in voting to repeal the Affordable Care Act, or ACA, but not to the extent many of them might want.

Alaska’s exorbitant health costs drive the discussion as much as anything. Sullivan highlights Alaska’s size and remoteness, its relatively small number of providers, the lack of transparency of medical procedure prices and overall pharmaceutical prices as issues he wants to find ways to address.

“It’s not a one-size-fits all thing,” Sullivan said. “What I’ve been doing since I’ve been home is meeting with as many stakeholders as I can, literally hundreds and hundreds of Alaskan, some people who think the ACA is great, others who think it’s horrible, and some are somewhere in between.”

The meeting was packed mostly with the people who think it’s horrible, while outside the Anchorage Petroleum Club protestors picketed Sullivan’s semi-closed meeting. Members of the press were only to report on the condition that they not identify audience members by name to facilitate an “open discussion.”

For a state in a recession, officials say ACA is putting a chill into business owners at a time when the state needs growth. Among other problems, the room full of business owners talked of a general feeling of fear — of not being able to provide insurance for employees or of not being able to make insurance requirements pencil out for their bottom lines.

“What we’ve heard is more general,” explained Lori Wing-Heier, director of the Alaska Division of Insurance. “Businesses are afraid to hire people. They’ve probably laid more people off. In starting up a business one of their concerns is with cost of healthcare. What are some of the impacts if you’re to start a business?”

Though the business crowd had concerns, Sullivan addressed the larger theme of how unaffordable health care is in Alaska under the Affordable Care Act.

“Doing nothing on this right now would not be responsible,” Sullivan said. “The Alaska market is in chaos, ground zero for failure, because of the ACA. Premiums have tripled, deductibles are at $12,000, $13,000, for a family of husband and wife with two kids making $75,000 a year. Some people are literally having to fork out $30,000…that’s not affordable care.”

Alaska’s new Medicaid enrollees are already costing more than what economists predicted they would. Centers for Medicare and Medicaid Services reported to Congress that Medicaid expansion enrollees cost $6,366 per person for fiscal year 2015 (ended last Sept. 30), about 49 percent higher than estimated.

Like many other rural states with sparse populations, Alaska’s results from the ACA have been mixed at best. What has worked better for high population states like New York and California has had poor results in Montana, Wyoming, Alaska and other places where there simply aren’t enough people to evenly spread the expense of high-cost enrollees.

The ACA has had other unintended consequences for Alaska. In May 2016, the Legislature bailed out insurance provider Premera Blue Cross Blue Shield of Alaska with a $55 million reinsurance bill.

Wing-Heier said the law also known as Obamacare hasn’t been all bad for the state.

“You’ve got to look at the ACA in entirety,” she said.

Like Sullivan, Wing-Heier points to the expanded coverage class as a benefit. Around 26,000 Alaskans now have access under Medicaid expansion.

“The number in the individual market with the high cost claims, probably 600 to 700 people in the entire market that if we were underwriting today wouldn’t be able to get insurance,” she said. “They have a cancer, they have preexisting conditions.

For that population, it’s been a success.”

That population affects the conversation. Nationally and in Alaska’s delegation, ACA reform comes in two flavors: outright repeal, or a more targeted, piecemeal approach that keeps some of the benefits — a strategy Sullivan favors.

“I’m going to press to retain certain things,” he said. “Staying on parents’ insurance until the age of 26, coverage for people with pre-existing conditions. That’s why I’m referring to this as ‘repeal and repair,’ not replace.”

Sullivan’s stance reflects that of Murkowski, who told the Legislature on Feb. 22 that she wouldn’t vote on broad or poorly thought out ACA repeal process. Like Sullivan, Murkowski acknowledged that coverage for children under 26 and for people with preexisting conditions was a boon to the state, and wouldn’t support measures that would strip those parts of the ACA.

She also told the Legislature she would support Medicaid expansion if it did.

To this end, Wing-Heier said the Division of Insurance is holding extensive talks with Sullivan and Lisa Murkowski and Rep. Don Young about the several pieces of ACA-related law being introduced in Congress by reform-minded Republicans.

“All three of them realize that there’s impacts to replace and repeal, and have gone more to a repair,” she said. “What’s the impact to Alaska, yea or nay, good or bad.”

Wing-Heier said the Division of Insurance thoroughly analyzed the proposals of Sens. Bill Cassidy, R-La., and Susan Collins, R-Maine, and House Speaker Paul Ryan.

The Cassidy-Collins bill makes more structured reforms, while Ryan’s bill approaches a repeal, which Wing-Heier said does not suit Alaska’s needs.

President Barack Obama’s Affordable Care Act, or ACA, expanded Medicaid eligibility in 2014. More than 4.3 million additional Americans now qualify, for a total of 64 million. By 2024, state and federal governments will spend $920.5 billion on the program, at which time 77.5 million people will get coverage.

The expansion covers 41,910 low-income Alaskans from 19 to 64 years of age who were previously not eligible for Medicaid — those not caring for dependent children, not disabled or pregnant, and who earn at or below 138 percent of the Federal Poverty Level, or FPL, for Alaska.

DJ Summers can be reached at daniel.summers@alaskajournal.com.

Updated: 
03/02/2017 - 10:48am