Senate committee continues work on mandatory health insurance

“Small businesses are very nervous about this bill because they think it will wind up costing them money,” said Sen. Hollis French, D-Anchorage. “We think that once they understand it there will be a lot of support,” because it will help their employees get health insurance coverage.

French told the Labor and Commerce committee Feb. 26 that he has seen estimates that 100,000 Alaskans are without health coverage, about 15 percent of the work force, and that 60 percent of those without insurance have jobs.

French’s bill would create a health care board that would define essential services to be offered and to certify health plans offered by insurers that meet the minimum coverage requirements. Insurers would have the flexibility to design different plans, French said, as long as they meet the minimums. Competition among insurance companies would help keep the price of health insurance down, French said.

Free coverage would be offered to Alaskans who are at or below the federal poverty level set for Alaska, but French said Medicaid now covers the vast majority of people at this income. Alaskans with incomes of up to 300 percent of the federal minimum would be eligible for subsidized coverage on a sliding scale. The 2008 federal poverty level for Alaska is $13,000 a year for individuals and $26,500 a year for a family, French said.

People with incomes above three times the federal poverty level are not eligible for subsidized coverage but would still be required to have health insurance if the legislation passes. The other side of this, however, is that insurers won’t be able to deny coverage, French said.

French’s bill would impose costs on the state general fund. The fiscal note prepared for the bill estimates the cost at more than $300 million per year, but this assumes that a robust plan like that state employees enjoy would be offered. A leaner plan would bring costs down.

French said not having coverage imposes costs on others because those who have coverage tend to pay higher prices to providers to cover the costs of bills unpaid by uninsured.

A study by the nonprofit organization Families USA estimated the total cost of uncompensated care in Alaska in 2005 at $124.7 million. The study also showed health providers trying to recover these losses drove up the cost of private insurance by 13.6 percent.