Concerns Raised About Monopoly of Individual Health Insurance in Alaska After Moda Health Plan Stopped from Issuing or Renewing Policies
By MARY KAUFFMAN
February 01, 2016
The Alaska Division of Insurance issued a Determination of Impairment last Thursday, thereby limiting Moda Health Plan’s business practices in Alaska. Under the determination, Moda’s ability to accept new and renewal business in Alaska is suspended. This action follows the Order of Immediate Supervision issued by the State of Oregon, where Moda is domiciled.
U.S. Senator Dan Sullivan (R-AK) in a prepared statement said, “I’m extremely disappointed that the health care of thousands of Alaskans will be negatively affected by the inability of Moda Health to issue new insurance policies in the state and its exit from the individual exchange and other markets in Alaska. Even before this news, I have been hearing from hundreds of Alaskans who were pleading for help due to skyrocketing insurance premiums. Unfortunately, this development will result in more hardship."
“[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 healthcare system” said Congressman Don Young (R-AK). “With the departure of Aetna, Assurant Health and State Farm last year, Alaskans are now left with only one viable option to obtain individual health insurance – which is concerning from a competition and marketplace standpoint. 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. Alaskans should know that the State and the congressional delegation will be working with them as this process moves forward.”
“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 regarding frequently asked questions for policyholders is available on the Alaska Division of Insurance’s website.
The Determination of Impairment order was effective Thursday; however, Moda’s insurance policies still appeared on healthcare.gov through the end of the open enrollment period which was January 31. The Alaska Division of Insurance advised 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.
Alaska House Representative Adam Wool (D- Fairbanks) responded to the news by highlighting the need to reform Alaska’s health insurance rate review process. Rep. Wool is the sponsor of House Bill 239 which would create a series of reforms to strengthen the Division of Insurance’s review process and make sure consumers are informed of proposed rate increases.
“Now that one insurance company will have a monopoly on individual health insurance in Alaska, it is more important than ever that health insurance rates be properly scrutinized and consumers be properly informed about possible rate increases,” said Rep. Wool. “Alaskan have already been forced to bear rate hikes far in excess of those in the rest of the country, and now that we have a true monopoly it is imperative that we reform our rate review process immediately.”
According to the Commonwealth Fund, from 2014-2015 Alaska’s health insurance rates rose by 31%, the highest increase in the nation, even though nationwide rates stayed flat. For 2016 the Division of Insurance has approved another average rate increase of 39%. HB 239 requires that the Division of Insurance hold investigatory hearings for all rate increase of more than 10%. The Attorney General would be authorized to advocate for the consumers in these hearings, similar to the role the Attorney General plays in utility rate cases before the Regulatory Commission of Alaska. Current law allows the division to conduct hearings on any rate case, but they have chosen to simply approve the recent rate hikes without holding hearings.
“Studies by the U.S. Department of Health and Human Services show that across the country rigorous health insurance rate review processes have saved Americans $1 billion each year,” said Rep. Wool. “It’s about time Alaskans start getting some of these savings.”
HB 239 is currently in the Alaska House Health and Social Services Committee.
Consumers with questions should contact the Division of Insurance consumer services specialists at (907) 269- 7900. FAQs will be posted to the division webpage and updated as more information becomes available.
The Alaska Division of Insurance, along with the Division of Banking and Securities, the Division of Corporations, Business and Professional Licensing, the Alcohol and Marijuana Control Office, and the Regulatory Commission of Alaska, is an agency housed within the Alaska State Department of Commerce, Community and Economic Development tasked with protecting consumers in Alaska.
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