Monthly premiums for health insurance on the federal marketplace will rise 16% in Alaska next year
Alaskans using the federal health insurance marketplace are bracing for a significant increase in monthly bills, with premiums set to rise by 16% in 2024. This comes on the heels of an 18% increase in the previous year, resulting in a total cost hike of over one-third in just two years. The spike in monthly premiums is being attributed to higher overall health-care costs and a surge in the amount of health care sought by Alaskans in the post-pandemic era.
According to state regulators, insurance executives, and Alaska’s chief medical officer, the increase is not due to insurance company profits, but rather a result of the rising demand for health care services and the costs associated with providing that care. Premera Blue Cross Blue Shield, a major player in Alaska’s individual market, reported $26.5 million in operating losses while providing coverage last year.
Lori Wing-Heier, Alaska’s insurance director, noted that while the rate increases are concerning, they are based on justifiable factors, and her office is required to reject excessive insurance premiums by law. Enrollment for 2024 coverage began on Nov. 1 and will continue through Jan. 15. For a 40-year-old Anchorage customer, monthly premiums for one of Premera’s mid-level “silver” plans are set to jump to $1,106 next year, up from $961 this year.
However, it’s important to note that many Alaskans may not pay the full cost of their plans, as federal tax credits for premiums have been extended through 2025. Depending on income level, these credits can cover the entire monthly cost upfront, and Native people can also qualify for premium assistance through the Alaska Native Tribal Health Consortium.
While small group premiums are experiencing more modest increases, it’s clear that the post-pandemic surge in health care utilization has had a significant impact on the individual market. These increases demonstrate how demand for health care directly translates into higher monthly premiums.
In response to the growing concerns, Alaska is taking steps to address the rising costs. The state is seeking input on health care costs and payment systems and is looking for ways to pay for value-based care. Ultimately, the goal is to work with all stakeholders to address the issue of rising health care costs in Alaska.
Overall, the state and insurance companies are looking for sustainable solutions that can mitigate future spikes in the individual market. By working together and seeking input from all parties involved, Alaska is striving to find a balance that provides access to quality health care while also managing the financial burden on consumers.