|By Tim Bradner, Alaska Journal of Commerce, Anchorage|
|McClatchy-Tribune Information Services|
Under state law the state
The extent of Premera's losses are severe.
"We're currently paying an average of
"At the rate of those payments, the company would have to have a 71.5 percent average increase to break even in 2015. We have instead filed for and received approval for a 37.5 percent average rate increase," the company said.
Even with that increase Premera expects to lose
The increases will generally not affect lower-income Alaskans receiving federal subsidies for their individual health insurance plans.
The other company that filed for the increase is
"The problem is really the very small size of the
In contrast, states with large numbers of people in the individual plans are seeing decreases in premiums in 2015, Coon said. The average premium in
Those are average premiums filed by all insurers in those markets and not just
Competition among many insurance companies selling the plans, in contrast to just two in
What allowed the premiums to drop was simply the very large numbers of people signing up under the ACA metallic plans in those two states in sharp contrast to
About 16,000 Alaskans in total are covered under individual health insurance policies issued under the federal health care act, the state
There are also a number of Alaskans with individual plans issued before Janurary 2014 that are "grandfathered" and not subject to the rate increases, for 2015 at least.
What aggravated the situation is that a large number of people with serious health conditions who were formerly enrolled in the state and federal high-risk pools opted to drop that coverage and enroll in one of the ACA "metallic" plans where premiums would be lower.
In the state high-risk pool the members paid premiums that were high but even those covered only part of the total costs of medical care. The remainder was paid, in effect subsidized, by all health insurance companies selling in
Coon said Premera believes a similar reinsurance mechanism to cover losses in the
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