BECKY BOHRER

Bill seeks to address rising health insurance rates

JUNEAU (AP) — State officials in Alaska are proposing a program to address high-cost health insurance claims in hopes of stabilizing rising rates on the individual policy market. Just two companies — Premera Blue Cross Blue Shield and Moda Health Plan Inc. — serve the individual market in Alaska and have filed for double-digit rate increases each of the past two years. State officials say that's not sustainable. They hope that reviving a high-risk pool to handle claims for the costliest conditions will bring some relief. The idea is to spread the cost of those claims across all insured markets, rather than to have them just be borne by the smaller individual market. The claims would be handled through the Alaska Comprehensive Health Insurance Association, which before the federal health care law provided insurance to Alaska residents who had been denied coverage. Under the proposal, insurers would transfer premiums for those consumers to the program, said Division of Insurance Director Lori Wing-Heier. The hope is to ease high rate increases by taking high-risk claims from the individual market and having more than 220,000 Alaskans pay a portion of those claims rather than 22,000, she said. There would be an assessment passed on to insured Alaskans to contribute to the pool, she said. The cost of that is not yet known. But it's not the intent to make it so expensive that people who have insurance would no longer be able to afford it, she said. Wing-Heier told lawmakers Tuesday that without a change, the state runs the risk of the individual market going into a "death spiral," with people potentially forced from the market by the high rates. The state struggles with high health care costs and that has translated to high insurance costs, she said. Wing-Heier said the goal of the proposal from Gov. Bill Walker is to minimize the size of rate increases and provide some stability to the market. With the state down to two insurers in the individual market, there's concern with how long they continue to incur the losses they have, she said. Both Premera and Moda experienced "significant losses" in 2014 and 2015, according to the Division of Insurance. Last year, each filed for average rate increases of close to 40 percent. Early indications this year suggest continued losses and likely rate increases for next year of more than 25 percent, the division said.  

Walker picks Spohnholz to succeed Gruenberg in Alaska House

Gov. Bill Walker on Tuesday appointed Ivy Spohnholz to fill the state House seat vacated when Anchorage Democratic Rep. Max Gruenberg died last month, calling Spohnholz a "worthy successor." Spohnholz was one of three finalists for the job whose names were sent to Walker for consideration by Anchorage Democrats. The other two were Taylor Brelsford and Kendra Kloster. By law, the appointee must be a member of the same political party as the predecessor, and in this case, would be subject to confirmation by House Democrats. If confirmed, Spohnholz, 43, said she plans to seek election to the seat later this year. She said she would caucus with minority Democrats. In a release, Walker said Spohnholz has a heart "for the youngest and most vulnerable among us." She will keep the state's future in mind in working toward a balanced, sustainable budget, he said. Spohnholz, who works for the Alaska division of the Salvation Army, said that when she was considering seeking the seat, she thought about what is at stake for the state and felt compelled to be a part of the conversation. Legislators are grappling with a multibillion-dollar deficit amid chronically low oil prices. Spohnholz said she's been following the budget and the state's fiscal situation closely. One thing that's been missing in the discussions so far, she said, is "what kind of a state do we want to have." "We've been talking about what we're willing to pay for government, and that is a very important conversation," she said. But more important than that is asking: "What kind of a state do we want to have and what are we going to do to get there?" she said. "Do we want to have a state where people don't want to go to our university system because we have starved it and our best and brightest move out of state?" Spohnholz said. "I don't think that's the state that we want to have, for example."

Alaska judge tosses lawmaker challenge to Medicaid expansion

A state court judge in Alaska on Tuesday upheld Gov. Bill Walker’s decision to expand Medicaid without legislative approval, finding that the federal Social Security Act requires Medicaid expansion. Superior Court Judge Frank Pfiffner dismissed a challenge to Walker’s authority by the Legislative Council, which is comprised of state House and Senate lawmakers. That decision can be appealed. A spokeswoman for the Senate majority said the Republican-led majority is looking over the decision and will evaluate its options. The decision came as Republicans in Alaska were participating in the state’s presidential preference poll. A key argument in the case centered on whether the expansion population is a mandatory group for coverage under Medicaid or an optional group that cannot be covered unless approved by the Legislature. The Legislative Council, in its lawsuit, argued that Walker overstepped his authority in expanding Medicaid on his own. The federal health care law expanded eligibility for Medicaid, and the U.S. Supreme Court in 2012 upheld most of the law. But it also found that states cannot lose existing Medicaid funding if they don’t expand Medicaid coverage. Pfiffner found that the U.S. Supreme Court decision striking down a penalty for not complying with expansion did not affect the requirement that states provide Medicaid to the expansion group. “This requirement may lack the coerciveness that Congress intended, but it is still a requirement,” Pfiffner wrote. The Legislature can change state law to reject the expansion if it wants, he wrote. Until then, state law requires the governor to provide Medicaid services to the expansion group, Pfiffner wrote. The population targeted by expansion is people between the ages of 19 and 64 who are not caring for dependent children, not disabled and not pregnant, and who earn up to 138 percent of the federal poverty level. Expansion in the state took effect last September. More than 10,000 people have been covered by the expansion, according to the state health department. Walker, in a statement, said he is pleased with the decision. He said the administration would continue to work with the Legislature on efforts to redesign and reform the Medicaid program. Becky Bohrer can be reached at https://twitter.com/beckybohrerap.

Alaska judge tosses lawmaker challenge to Medicaid expansion

(AP) — A state court judge in Alaska on Tuesday upheld Gov. Bill Walker's decision to expand Medicaid without legislative approval, finding that the federal Social Security Act requires Medicaid expansion. Superior Court Judge Frank Pfiffner dismissed a challenge to Walker's authority by the Legislative Council, which is comprised of state House and Senate lawmakers. That decision can be appealed. A spokeswoman for the Senate majority said the Republican-led majority is looking over the decision and will evaluate its options. The decision came as Republicans in Alaska were participating in the state's presidential preference poll. A key argument in the case centered on whether the expansion population is a mandatory group for coverage under Medicaid or an optional group that cannot be covered unless approved by the Legislature. The Legislative Council, in its lawsuit, argued that Walker overstepped his authority in expanding Medicaid on his own. The federal health care law expanded eligibility for Medicaid, and the U.S. Supreme Court in 2012 upheld most of the law. But it also found that states cannot lose existing Medicaid funding if they don't expand Medicaid coverage. Pfiffner found that the U.S. Supreme Court decision striking down a penalty for not complying with expansion did not affect the requirement that states provide Medicaid to the expansion group. "This requirement may lack the coerciveness that Congress intended, but it is still a requirement," Pfiffner wrote. The Legislature can change state law to reject the expansion if it wants, he wrote. Until then, state law requires the governor to provide Medicaid services to the expansion group, Pfiffner wrote. The population targeted by expansion is people between the ages of 19 and 64 who are not caring for dependent children, not disabled and not pregnant, and who earn up to 138 percent of the federal poverty level.

Legislators pay fond tribute to Rep. Gruenberg

JUNEAU — Legislators paid tribute Feb. 16 to the late state Rep. Max Gruenberg, remembering the Anchorage Democrat as a kind man and a stickler for details with a penchant for amending bills that he thought could be improved. There were tears and laughs at the remembrance, held in the House speaker’s chambers, as stories were shared. There were jokes about Gruenberg’s amendments and breaks in floor sessions, known as “at eases,” so Gruenberg could iron out details or nail down answers to questions. There were tears remembering acts of kindness and the impression that he left. House and Senate lawmakers from both parties attended, along with aides and Gruenberg’s widow, Kayla Epstein. Gov. Bill Walker and Lt. Gov. Byron Mallott paid their respects, as did several former legislators. Gruenberg served in the House from 1985 to 1993 and from 2003 until his death. He was 72. House Speaker Mike Chenault, R-Nikiski, said Gruenberg had a good heart and tried to improve legislation. Even if he didn’t agree with the bill, he wanted to make sure that if it was done, it was done right, Chenault said. He enjoyed Gruenberg’s company, “even though sometimes, and I’ll say it, he was a pain the butt,” Chenault said to laughs. “But he was our pain in the butt.” House Minority Leader Chris Tuck, D-Anchorage, said Gruenberg was often a crutch for him to lean on. He left a big hole, Tuck said. Senate Minority Leader Berta Gardner, D-Anchorage, said Gruenberg had a joy for life and would listen with his full attention. She said to laughter that there were times he would fall asleep, but when the talking stopped, he would open his eyes and ask a pertinent question. Rep. Les Gara, D-Anchorage, said Gruenberg’s “true passion was giving people a chance in the world, regardless of their background, regardless of whether they were born wealthy, poor or whatever.” He believed everyone deserved a fair shake, Gara said. Epstein asked legislators to consider going back to 120-day sessions. She said her husband was working hard. State law calls for sessions to run 90 days, the result of a 2006 voter initiative. The constitution allows for sessions of up to 121 days, with an option to extend for up to 10 days. Under the law, when a vacancy occurs in the Legislature, the governor is to appoint a qualified replacement within 30 days of the vacancy. The law states the appointee shall be a member of the same political party as the predecessor and in this case would be subject to confirmation by a majority of House Democrats. In a release, the state Democratic party and House District 16 Democrats said that district Democrats will accept applications to fill the seat until 5 p.m. Feb. 22. Applicants must live in District 16, the Anchorage district that Gruenberg represented. Interviews will be conducted on Feb. 24 and 25. Three nominees will be sent to Walker. The person appointed would fill the remainder of Gruenberg’s term, which ends in January.  

Moda Health suspension lifted; company must raise $179M

JUNEAU (AP) — Insurance regulators in Alaska and Oregon announced Feb. 8 that a company that had been suspended from offering health insurance policies in the states over concerns with its financial condition will be allowed to resume that business. The Alaska Division of Insurance and the Oregon Department of Consumer and Business Services said they have reached an agreement with Moda Health Plan Inc. aimed at stabilizing its financial position. The agencies said the agreement will allow Moda to resume selling and renewing policies to individual and group customers in Alaska and Oregon. Both states late last month suspended Moda from accepting new or renewal policies, citing concerns with the company’s financial situation. In a release, Patrick Allen, director of the Oregon department, said initially the agency thought it might be prudent for Moda to leave the individual market. The steps outlined in the consent order will instead allow consumers to continue their health coverage with no changes, he said. The agreement reached “is the best option for consumers because it will not disrupt their current policies,” he said. The department said it retains the ability to respond if Moda doesn’t comply with all the requirements in the order. “We worked very hard to keep them” in the market, said Alaska Division of Insurance Director Lori Wing-Heier. Moda is one of two companies that have been offering individual health insurance policies for Alaskans on the federally facilitated online marketplace. Wing-Heier said she has asked the federal government to put Moda back on the exchange and has also requested a two-week special enrollment period. Wing-Heier said people may have selected Moda but had not finalized their enrollment. The initial action against Moda took place near the end of the latest open enrollment period on the marketplace. Alaska officials in a release said both states came to an agreement with Moda over the weekend that outlines a plan for the company to stabilize its financial position and continue to offer coverage. The agreement calls for Moda to raise at least $179 million, which is expected to allow the company to continue providing services through 2016. Of that, $15 million would be put aside for the protection of Alaska policyholders, Wing-Heier said. Among other things, Moda also must obtain approval from Oregon regulators before awarding executive salary increases or bonuses. Wing-Heier said insurers not only in Alaska but across the country have had a tough time. Moda has made a commitment to try to stay in the market, she said. “They could’ve taken a much easier route and said, ‘We’re out of health insurance,’ or ‘We’re out of Alaska, period,’ and they did not take that,” she said. Since Jan. 27, Moda has worked through the process of assuring the Oregon Department of Consumer and Business Services of its ability to continue to serve its individual customers in Oregon and Alaska, said Robert Gootee, CEO of Moda Inc., the parent company of Moda Health Plan. “They have done an excellent job of quickly analyzing a difficult and rapidly changing set of circumstances,” he said in a statement. He said he’s pleased an agreement has been reached on a path forward. About 10,000 Alaskans are enrolled by Moda on the individual market and about 7,500 on the small group market, Wing-Heier has said. About 244,000 Oregon residents were enrolled in Moda plans in the individual, small group and large group markets as of Sept. 30, according to the Oregon Department of Consumer and Business Services.

Moda allowed to resume business under consent order

JUNEAU (AP) — Insurance regulators in Alaska and Oregon announced Monday that a company that had been suspended from offering health insurance policies in the states over concerns with its financial condition will be allowed to resume that business. The Alaska Division of Insurance and the Oregon Department of Consumer and Business Services said they have reached an agreement with Moda Health Plan Inc. aimed at stabilizing its financial position. The agencies said the agreement will allow Moda to resume selling and renewing policies to individual and group customers in Alaska and Oregon. Both states late last month suspended Moda from accepting new or renewal policies, citing concerns with the company's financial situation. In a release, Patrick Allen, director of the Oregon department, said initially the agency thought it might be prudent for Moda to leave the individual market. The steps outlined in the consent order will instead allow consumers to continue their health coverage with no changes, he said. The agreement reached "is the best option for consumers because it will not disrupt their current policies," he said. The department said it retains the ability to respond if Moda doesn't comply with all the requirements in the order. "We worked very hard to keep them" in the market, said Alaska Division of Insurance Director Lori Wing-Heier. Moda is one of two companies that have been offering individual health insurance policies for Alaskans on the federally facilitated online marketplace. Wing-Heier said she has asked the federal government to put Moda back on the exchange and has also requested a two-week special enrollment period. Wing-Heier said people may have selected Moda but had not finalized their enrollment. The initial action against Moda took place near the end of the latest open enrollment period on the marketplace. Alaska officials in a release said both states came to an agreement with Moda over the weekend that outlines a plan for the company to stabilize its financial position and continue to offer coverage. The agreement calls for Moda to raise at least $179 million, which is expected to allow the company to continue providing services through 2016. Of that, $15 million would be put aside for the protection of Alaska policyholders, Wing-Heier said. Among other things, Moda also must obtain approval from Oregon regulators before awarding executive salary increases or bonuses. Wing-Heier said insurers not only in Alaska but across the country have had a tough time. Moda has made a commitment to try to stay in the market, she said. "They could've taken a much easier route and said, 'We're out of health insurance,' or 'We're out of Alaska, period,' and they did not take that," she said. Since Jan. 27, Moda has worked through the process of assuring the Oregon Department of Consumer and Business Services of its ability to continue to serve its individual customers in Oregon and Alaska, said Robert Gootee, CEO of Moda Inc., the parent company of Moda Health Plan. "They have done an excellent job of quickly analyzing a difficult and rapidly changing set of circumstances," he said in a statement. He said he's pleased an agreement has been reached on a path forward. About 10,000 Alaskans are enrolled by Moda on the individual market and about 7,500 on the small group market, Wing-Heier has said. About 244,000 Oregon residents were enrolled in Moda plans in the individual, small group and large group markets as of Sept. 30, according to the Oregon Department of Consumer and Business Services.  

Alaska, Oregon suspend Moda Health as finances worsen

Alaska insurance regulators on Jan. 28 suspended Moda Health Plan from accepting new or renewal policies in the state, citing concerns with the Oregon-based company’s financial situation. The Alaska Division of Insurance acted after officials in Oregon placed the company under supervision because of its financial condition. Moda is one of two companies offering individual insurance policies for Alaskans on the federally facilitated health insurance marketplace. The other is Premera Blue Cross Blue Shield. The division of insurance last year approved average rate increases of nearly 40 percent for both companies. The Oregon Department of Consumer and Business Services said its supervision order calls for the company to obtain sufficient capital and to present a business plan that demonstrates Moda can operate in sound financial manner into the future. The department said its actions were prompted by Moda’s “excessive operating losses and inadequate capital and surplus.” Under the order, Moda cannot issue new policies or renew current policies in the individual market or add new groups in Oregon, the department said in a release. The department said it will begin working with Moda to transfer its individual market plans to another carrier. “Our primary goal is to ensure consumers are protected,” Patrick Allen, the department’s director, said in a release. “We will continue to work closely with the company to find a sustainable path going forward while minimizing risk to consumers.” Lisa Morawski, a spokeswoman for the department, said a lot of what happens next will depend on the plan that Moda presents and whether the department finds it acceptable. About 10,000 Alaskans are enrolled by Moda on the individual market and about 7,500 on the small group market, Alaska Division of Insurance Director Lori Wing-Heier said in an email response to questions. There are other options in the group market, she said. “The division will do everything within its authority to see that Moda’s policyholders will continue to access medical services until they can be transitioned to another insurer,” Wing-Heier said in a release. About 244,000 Oregon residents were enrolled in Moda plans in the individual, small group and large group markets as of Sept. 30, according to the Oregon Department of Consumer and Business Services. U.S. Rep. Don Young, R-Alaska, said Thursday’s announcement “is meant to protect Alaskans from the failings of an individual insurance provider, but it also begs the question of the overall instability of our current health care system.” The system went through a shake-up last year, with other companies announcing their departure from the individual market. “The Alaska Division of Insurance has made assurances that Moda policy holders will continue to be able to access health care services, their claims will be paid and consumers will be protected,” Young said in a release. “Alaskans should know that the state and the congressional delegation will be working with them as this process moves forward.”

Alaska, Oregon suspend activity by health insurer Moda

JUNEAU (AP) — Alaska insurance regulators have suspended Moda Health Plan from accepting new or renewal policies in the state, citing concerns with the Oregon-based company's financial situation. Moda is one of two companies offering individual insurance policies for Alaskans on the federally facilitated health insurance marketplace. The other is Premera Blue Cross Blue Shield. The Alaska Division of Insurance acted Thursday after officials in Oregon placed the company under supervision due to its financial condition. The supervision order issued by Oregon's Department of Consumer and Business Services calls for the company to submit a business plan that it deems acceptable by Friday. The department says Moda cannot issue new policies or renew current policies in the individual market or add new groups. A message was left for a Moda spokesman. Below is the press release from the Alaska Division of Insurance: “The Division of Insurance has been closely reviewing Moda’s financial status and monitoring related consumer complaints,” said Lori Wing-Heier, Director of the Division of Insurance. “We took this action to protect Alaskans—Moda’s inadequate capital and excessive operating losses put it in a hazardous financial situation. “Today’s action will facilitate the division’s participation in the company’s financial decisions to ensure that policyholders are protected. The division will do everything within its authority to see that Moda’s policyholders will continue to access medical services until they can be transitioned to another insurer.” Information for policyholders will be made available on the Division of Insurance’s webpage as it emerges. https://www.commerce.alaska.gov/web/ins/Home.aspx The Determination of Impairment order is effective today; however, Moda’s insurance policies may still appear on healthcare.gov through the end of the open enrollment period on January 31. The Division of Insurance advises consumers still shopping for plans to choose an insurer other than Moda. Alaskans already enrolled with Moda will need to switch plans; there will be a special enrollment period to allow for the transition. The Division of Insurance is working closely with the federal Centers for Medicare and Medicaid Services and Center for Consumer Information and Insurance Oversight during this time. Consumers with questions should contact the Division of Insurance consumer services specialists at (907) 269- 7900. FAQs will be posted to the division webpage https://www.commerce.alaska.gov/web/ins/Home.aspx by close of business, and updated as more information becomes available.

Walker’s Permanent Fund plan gets first Senate hearing

JUNEAU (AP) — The chairman of the Senate State Affairs Committee said Jan. 26 that he wants to vet several ideas surrounding the use of Alaska Permanent Fund earnings. Sen. Bill Stoltze, R-Chugiak, said that could include a constitutional amendment to allow voters to weigh in on the matter. So far, such a measure has not been introduced. Stoltze said he wants to be able to have different bills and ideas ready to send to the Senate Finance Committee for additional review. Stoltze’s committee held its first hearing Jan. 26 on Gov. Bill Walker’s plan to use the Permanent Fund as an endowment of sorts, fed by oil tax revenue and a portion of royalties. Earnings from the Fund, bolstered by a transfer from savings, would help pay for state government, moving the state away from budgeting around volatile oil revenue. The plan would change how the annual dividends most Alaskans receive are calculated, basing them on a portion of royalties rather than on the performance of the Fund. This year would be a transitional year for the dividend, and Walker’s budget proposal for the upcoming fiscal year calls for oil-tax revenue and the bulk of royalties to go into the earnings reserve. The use of Permanent Fund earnings is a centerpiece of Walker’s budget plan. But questions have been raised about whether the Fund’s earnings reserve account must be swept into the constitutional budget reserve to repay money that’s been taken out of it. The Department of Law, in a memo to the House Finance co-chairs this week, said it wouldn’t. In recent years, lawmakers have approved taking money from the constitutional budget reserve to help with the state’s pension shortfall and to help balance the budget amid deficits fueled by low oil prices. Under the constitution, if money is taken from the budget reserve, money in the general Fund available to spend at the end of each fiscal year is to be deposited into the budget reserve until it’s repaid. A three-quarter vote of each the House and Senate generally is needed to access the budget reserve. State law defines the earnings reserve as a separate account in the Permanent Fund. But the Legislative Finance Division has argued that putting money other than Permanent Fund earnings into the earnings reserve would change the nature of that account. The Department of Law’s memo, signed by Senior Assistant Attorney General William Milks on behalf of the attorney general, acknowledges that the earnings reserve would no longer be comprised solely of Permanent Fund income and that the account would be used for state government costs rather than restricted to paying dividends. But, the memo states, that doesn’t change the earnings reserve into a Fund within the general Fund. The account has always been available to pay for government even if it hasn’t been used that way, the memo states. Legislative Finance Division Director David Teal said he wanted to have the issue at least discussed. If adopted as proposed by the administration, he said he’s concerned about a potential court challenge. A memo from Legislative Legal Services, requested by Sen. Bill Wielechowski, D-Anchorage, states that the appropriation of non- Permanent Fund income to the earnings reserve, as proposed “poses a novel issue not yet resolved by the Alaska Supreme Court.” Some legislators have indicated they’re interested in looking at some use of Permanent Fund earnings to address the deficit. At least two bills with different approaches than Walker has proposed are pending. Sen. Bert Stedman, R-Sitka, said he thinks lawmakers should consider not inflation proofing the Permanent Fund and using that $900 million. He also wants to change the state’s oil tax credit structure. Laura Achee, a spokeswoman for the Alaska Permanent Fund Corp., said by email that most of the Fund’s assets rise and fall with inflation and are “self-inflation proofing.” The Legislature traditionally also has used Fund income toward inflation-proofing the Fund’s principal.

Alaska Supreme Court upholds local school contribution

The Alaska Supreme Court on Friday upheld as constitutional a state requirement that local school districts help pay for education, reversing a lower court decision. The ruling came in a case filed against the state by the Ketchikan Gateway Borough. In 2014, a state court judge ruled in the borough's favor, finding that a required local contribution for schools is a dedicated fund that violates a constitutional provision that no state tax or license will be earmarked for any special purpose. But the high court, in a decision released Friday, said the required local contribution is not a state tax or license within the meaning of the dedicated funds clause. The opinion, written by Justice Joel Bolger, states that the minutes of the constitutional convention and historical context of those proceedings suggest delegates intended for local communities and the state to share responsibility for local schools. Chief Justice Craig Stowers and Justice Daniel Winfree concurred in the decision but expressed concerns. Winfree wrote that he does not rule out an ultimate conclusion that the required local contribution is unconstitutional, as a dedicated tax or otherwise, and does not join the court's analysis or decision on that point. "In my view the question cannot be answered definitively without a full interpretation and understanding of the Alaska Constitution's public schools clause, which, apparently for strategic reasons, the parties did not confront," he wrote. Winfree wrote that he agreed with the court's analysis in affirming the lower court's secondary decision that the required contribution does not violate the appropriations clause or the governor's veto clause of the Alaska Constitution.

About 7,700 Alaskans have enrolled in expanded Medicaid

A state health department official says that since the state expanded Medicaid to cover more lower-income Alaskans on Sept. 1, about 7,700 people have enrolled. Chris Ashenbrenner is the Medicaid program coordinator for the state health department. The department had estimated that nearly 20,100 newly eligible Alaskans would enroll during the first year of expansion, and Ashenbrenner believes that enrollment is on track for that. She says enrollment in the first half of the year may be more robust because of pent-up demand for health care. She says open enrollment periods through the federally facilitated health insurance marketplace also brings in a lot of new Medicaid applications because the system can make a Medicaid-eligibility determination or refer cases to the state for a determination.  

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