FAIRBANKS — Alaska could receive a special bonus under the GOP-led Graham-Cassidy health care bill for having premiums higher than any other state. Studies this week, however, also indicate a dark future for insurance costs in the state.
According to financial projections produced by the office of Sen. Bill Cassidy, one of the bill’s authors, Alaska would be the only state to receive additional money from the legislation’s $182 billion stability fund. The money would be delivered through a provision in the bill that, in 2026, would award each state $4,400 in federal subsidies to each “eligible beneficiary.” Alaska, however, would be awarded $6,500, or 48 percent more than other states.
The bill did not define who would qualify as an “eligible beneficiary.”
The newly introduced bill would eliminate many of the provisions found in the Affordable Care Act, replacing them with a block grant system that would appropriate a certain amount of health care funding to each state for the state to manage as it sees fit.
The bill would scrap current federal subsidy exchanges of the Affordable Care Act, replacing them with the bonus after 10 years.
The figures were found on a spreadsheet on Cassidy’s website. The spreadsheet since has been removed from the site, and a staffer in Cassidy’s office said the senator is revising the projections.
A staffer in Cassidy’s office did say that an impending version of the projections would reflect a similar bonus, stating that low-density states whose health care costs are more than 20 percent above the U.S. mean would qualify for the bonus. This would include only Alaska and North Dakota, though no bonus in beneficiary funding was reflected for North Dakota in the spreadsheet.
Alaska Gov. Bill Walker said he is still closely reviewing the health care bill. He was unavailable for comment on the new projections, according to his office.
“What I can tell you now is that all initial reviews indicate that Alaska stands to lose, not gain, millions of dollars,” Walker spokeswoman Grace Jang said. “We are hoping to get a deeper analysis in the coming days.”
The Congressional Budget Office has said it doesn’t have time to complete a full analysis of the impact on coverage before the GOP’s Sept. 30 deadline, meaning senators would be voting on the bill without complete knowledge of its impact.
A new study released Wednesday by Avalere, a D.C-based health care consulting firm, suggests that the Graham-Cassidy bill could in fact lead to a reduction in federal funding to states by $215 billion through 2026 and more than $4 trillion over 20 years.
According to the study, Alaska would see a $1 billion cut in federal funding through 2026. The state’s federal funding would be cut by $14 billion overall between 2020 and 2036.
The bill specifies that block grants would end after 2026, then each grant would need to be re-appropriated and funding levels could change.
“A reduction in federal subsidies for health insurance is likely to result in more people being uninsured,” said Caroline Pearson, a senior vice president at Avalere, which specializes in health industry research.
Pearson said the bill would significantly reduce funding to states over the long term, particularly for states such as Alaska that have expanded their Medicaid program.
“States would have broad flexibility to shape their markets but would have less funding to subsidize coverage for low- and middle-income individuals,” Pearson said.
A new report published by the Center for American Progress projects that 41,000 Alaskans would lose coverage by 2027 from a combination of reduced Medicaid funding and significant cuts to federal tax credits that help Alaskans buy insurance on the individual market. It estimates 32 million fewer people nationwide would have coverage by 2027.
The Blue Cross Blue Shield Association warned against the bill in a statement Wednesday. Premera Blue Cross, an independent licensee of the association, is the only insurer operating in the Affordable Care Act marketplace in Alaska.
“The bill contains provisions that would allow states to waive key consumer protections, as well as undermine safeguards for those with pre-existing medical conditions,” according to the association.
The statement added that the bill could allow states to repeal ACA provisions that prevent patients with pre-existing conditions from being charged more for premiums. The association also expressed concern regarding potential funding cuts in the bill, warning that the block grants the bill centers around could be too small to fund state’s insurance costs.
Premera Blue Cross Blue Shield of Alaska on Wednesday projected at least a 26 percent decrease in health care premiums based on the state’s reinsurance program.
Walker said the announcement continues to support a need to fully examine the impacts of any changes to the Affordable Care Act, which enabled the creation of Alaska’s reinsurance program.
“I continue to support a bipartisan approach that follows a comprehensive process to stabilize the market and ensure affordable health care coverage to Alaskans,” Walker said in a statement Wednesday.
Senate Republican leader Mitch McConnell plans to bring his party’s latest repeal attempt up for a vote in the Senate next week, Reuters reported Wednesday.
Contact staff writer Erin Granger at 459-7544. Follow her on Twitter: @FDNMPolitics. The Associated Press contributed to this report.