Another Health Insurer Abandons Alaska
By Laurel Andrews
Moda Health will exit Alaska's individual insurance market next year, the company announced Monday, leaving only one health insurance provider in the state's market that, so far, has been defined by drastic annual rate increases for consumers and big losses for insurance companies.
Moda will focus on its other group and individual plans in the state, it said in a release. It may consider returning in the future but "the market requires significant reform in order to be sustainable," the company said.
The exit applies only to Moda's 14,000 customers who have health insurance plans on the individual marketplace. The company's other medical and dental plans are not affected by the decision, the company wrote.
"Obviously this is not good news," Alaska Division of Insurance Director Lori Wing-Heier said after the announcement.
About 23,000 Alaskans have health insurance plans from the individual marketplace, a component of the Affordable Care Act intended to provide coverage to people who cannot get insurance through employers or other means. About 75 percent of those plans are subsidized by the federal government, according to the Division of Insurance.
Current customers will remain covered through December. "Moda will focus on making the transition to a new medical carrier in 2017 as convenient as possible," the release says.
After the exit of two insurers last year, Moda and Premera Blue Cross were left as the only insurance companies serving Alaska's individual market. Both companies had already suffered significant financial losses in the individual marketplace this year, Wing-Heier said in March.
In 2017, Premera will be the only company providing insurance on the individual marketplace.
"Premera is committed to the Alaska market and will continue to offer individual coverage to Alaskans," spokesperson Melanie Coon wrote in a statement about Moda's departure.
Having only one option for an individual health care insurer is unusual; most Americans were able to choose from three or more providers on the individual marketplace in 2016, according to the Kaiser Family Foundation.
"You never want to be without competition -- that's not good for consumers," Wing-Heier said. "But in our case in particular it's troubling because (companies are) leaving because they're losing money."
That makes it harder to attract new insurers to the market, Wing-Heier said.
Moda will give the Division of Insurance its claims data "in the next few days," Wing-Heier said. Premera will be able to use that data in setting its rates for next year.
Since the individual marketplace rollout in 2014, price increases have reigned. In March, Wing-Heier warned Alaska legislators that the market may go into a "death spiral" and that Alaskans were facing another year of roughly 40 percent premium increases.
Premera and Moda have blamed high-cost claims coupled with a small market pool as the reason for the rate increases.
In a Kaiser Family Foundation report analyzing rates for major cities across the U.S., Anchorage set the benchmark for high prices and was among the cities with the largest increases from 2015 to 2016.
In response to Moda's announcement, the U.S. Department of Health and Human Services emphasized a drop in Alaska's uninsured rate from 19 percent to 10 percent under the Affordable Care Act.
Most Alaskans receive substantial subsidies for their plans, press secretary Jonathan Gold wrote in a release, so the rate increases published by insurance companies do not reflect what consumers may actually pay.
"Alaska faces unique challenges related to its rural nature and small population, but we are committed to ensuring that all Americans have access to affordable coverage," Gold wrote.
Moda Health's offerings on the individual market were briefly suspended by the state last year due to concerns it didn't have enough capital to operate safely. The company must file its requested rates by May 11.
(c)2016 the Alaska Dispatch News (Anchorage, Alaska)