Alaska insurance director expects minimal impact from individual mandate repeal

The U.S. Senate is barreling (with help from Alaska’s two senators) toward a final vote on the GOP’s tax reform bill. It will include a repeal of the Affordable Care Act’s individual mandate, but that part—at least—isn’t making state officials nervous.

That inclusion of the repeal has raised dire warnings that it’ll spike premiums and could send markets into death spirals, but it’s not expected to make a significant impact in Alaska, according to Alaska Insurance Division Director Lori Wing-Heier.

Wing-Heier explains that’s because people are generally already operating as if the individual mandate wasn’t in place. In 2015, about 19,000 Alaskans went without insurance. That’s about equal to as many people who did sign up for coverage.

“People that want insurance are purchasing it and those that can’t afford it or don’t support the ACA are paying the penalty,” she said. “We support the mandate, but with such a small market, knowing how many are already not complying, it is hard to show an impact that will further decrease the market.”

The inclusion of the individual mandate in the tax bill initially caused concern for Alaska Sen. Lisa Murkowski, who’s fought previous GOP efforts to undo the Affordable Care Act out of concern of its impacts on Alaska. She later reversed course on the issue, and currently plans to vote in favor of the tax bill.

Alaska Sen. Dan Sullivan referenced the state’s position on the individual mandate during a call with reporters on Thursday, brushing aside concerns about the impacts a repeal would have on insurance rates.

Here’s Wing-Heier’s full statement as provided by Gov. Bill Walker’s office:

“We do not expect the mandate to have a significant impact on the Alaska individual market. The possible deterioration was factored into the 2018 rates. We know that 19,000 Alaskans did not purchase insurance and paid over $12 million in penalties in 2015 even though close to 16,000 would have qualified for subsidies or Medicaid expansion. We have consistently said that we support the individual mandate to stabilize the market but do not see it having an impact. People that want insurance are purchasing it and those that can’t afford it or don’t support the ACA are paying the penalty. Our market has decreased over the last two years from a high of 20,000 to about 16,000. Some have migrated to Medicaid and we’ve lost to healthcare sharing ministries. Again, we support the mandate but with such a small market, knowing how many are already not complying, it is hard to show an impact that will further decrease the market.”

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