Official: Insurer Moda won't extend certain health policies in Alaska past end of this year

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JUNEAU, Alaska — One of the two health insurers that are part of the federally run online marketplace in Alaska won't allow people to keep policies past this year that are out of compliance with President Barack Obama's signature health care law, a state official said.

Lori Wing-Heier, director of Alaska's Division of Insurance, said her best guess is that the decision by Moda Health would affect about 800 policies.

The other provider on the exchange in Alaska, Premera Blue Cross Blue Shield, will extend such policies, which are held by about 3,240 members, spokeswoman Melanie Coon said by email.

Moda spokesman Jonathan Nicholas said he was traveling and would try to respond to requests for comment Monday.

After the marketplace's rocky rollout last year, Obama said insurers would be allowed to offer plans through 2014 that would have otherwise been canceled. The Obama administration later extended that for two more years, meaning some policies, depending on their renewal date, could extend through September 2017. State insurance commissioners were given the final say on what policies could be sold in their states.

Coon said Friday that Premera will extend its plans through 2016.

Wing-Heier said other insurers in the state can also extend their plans but they had "very few policies" in the individual and small group markets.

She said by email that the division did not question Moda's decision, calling it a business decision on the company's part. She said as long as Moda sends the required 90-day discontinuation notices, it is compliant with state law.

Premera said last year that about 5,360 of its individual members in Alaska had plans that did not meet the requirements of the Affordable Care Act. Some of those individuals may have opted for a new policy if they qualified for a federal subsidy to help pay the cost, Coon said.

The company has about 5,100 members with plans purchased through the marketplace.

Last week, the state announced rate increases in 2015 ranging from 22 percent to 29 percent across all plans for Moda, and 35 percent to 40 percent for Premera. The reasons cited include the relatively small market, which has to support its claims, and high claims in the first half of 2014.

Premera said it expects to lose $5 million next year, even with the increase, and that it had urged the state to create a reinsurance program, in which an insurer buys its own insurance to reduce risk. That would help spread high medical costs across the entire insured market.

Wing-Heier said the state is looking at what it would take to implement reinsurance.

U.S. Sen. Mark Begich, D-Alaska, last year proposed "copper" plans, a new tier with lower premiums aimed at offering more affordable options.

"This option will be especially important in states such as Alaska, where medical costs are very high and there is not much competition among insurers," he said in a letter to U.S. Health and Human Services Secretary Sylvia Burwell, asking that this idea be studied.

Burwell told Begich while competition is working in the online marketplace, "it may not work as efficiently in a high cost market with a small population, such as Alaska."

She said the agency planned to look at possible contributing factors and at options "for improving the functioning of the market or offering additional choices for individuals, including a new 'copper plan.'"

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