According to 2017 data from the Council for Community and Economic Research, health services in Alaska are 70 – 200 percent more expensive than the national average. Many pressures influence Alaska’s health-care costs. They include expenses related to recruiting providers from out of state, lack of competition, and the state’s small population.
In the 2018 legislative term, Alaska sought legislative solutions to skyrocketing healthcare costs in terms of price transparency and cost containment. The state introduced and passed HB 240, which promotes regulation and price transparency of pharmacy benefit managers. Other measures failed to pass, however, including SB 129, which limits how much an insurance company must reimburse an out-of-network provider for covered services, and HB 123, which requires providers and medical facilities to disclose the undiscounted costs of their most common procedures.
In the 2016 legislative term, Alaska passed a law which sets up a $55 million fund, financed through an existing tax on all insurance companies, to subsidize enrollees’ costs as the state struggles with Obamacare price spikes. The number of insurers offering plans to individuals in Alaska markets is set to drop to one for 2017, and state officials warned that the remaining companies couldn’t realistically raise rates high enough to cover customers’ medical bills. Alaska Governor Bill Walker said the bill would ensure that the 23,000 Alaskans enrolled in exchange plans would not suddenly lose their insurance.
Alaska’s most recent legislative session ran from 1/16/2018 – 4/16/2018.
Recent Legislative Developments
|2018||SB 209||An Act relating to the practice of pharmacy; and relating to notifications to consumers regarding prescription drug pricing. Would require a pharmacist to charge a consumer the applicable cost sharing or the current pharmacy retail price for a prescription medication, whichever is less. If a pharmacist, or a person acting at the direction of a pharmacist, determines that the cost sharing for a prescription medication exceeds the current pharmacy retail price, the pharmacist or person acting at the direction of a pharmacist shall notify the consumer of the pharmacy retail price and the consumer’s cost sharing. A pharmacist shall disclose the pharmacy retail price and the consumer’s cost sharing of any prescription when requested by the consumer. A pharmacy shall post a notice to consumers informing them that they may, at the point of sale, request the current pharmacy retail price for each prescription medication the consumer intends to purchase.||Inactive — Died.|
|HB 240||An Act relating to the registration and duties of pharmacy benefits managers; relating to procedures, guidelines, and enforcement mechanisms for pharmacy audits; relating to the cost of multi-source generic drugs and insurance reimbursement procedures; relating to the duties of the director of the division of insurance; and providing for an effective date.
Would require pharmacy benefit manager to register biennially as a third party administrator with the Division of Insurance. Would establish rules for pharmacy audits. Would establish rules for calculating pharmacy overpayments and underpayments based on actuals rather than estimates. . Would require pharmacy benefit manager to disclose methodology and sources for drug reimbursement amounts. Would require pharmacy benefit manager to establish appeals process for reimbursement of multi-source drugs.
|Passed – See NASHP.org for status updates.|
|2017||SB 119/HB 123||An Act relating to disclosure of health care services and price information; relating to health care insurers; relating to availability of payment information and estimates of out-of-pocket expenses; relating to an incentive program for electing to receive health care services for less than the average price paid; relating to filing and reporting requirements; and providing for an effective date.||Inactive — Died.|
|2015-2016||HB 374||An Act relating to coverage under a state plan provided by the Comprehensive Health Insurance Association; establishing the Alaska comprehensive health insurance fund; relating to a reinsurance program; relating to the definition of ‘residents who are high risks’; relating to an application for a waiver for state innovation for health care insurance; and providing for an effective date.
This bill sets up a $55 million fund, which is financed through an existing tax on all insurance companies, in order to subsidize enrollees’ costs as the state struggles with Obamacare price spikes.
|Passed — Signed by Governor on November 7, 2016.|
|2018||HB 358||An Act relating to insurance coverage for benefits provided through telehealth; and providing for an effective date. A health care insurer that offers, issues for delivery, or renews in the state a health care insurance plan in the group or individual market [THAT PROVIDES MENTAL HEALTH BENEFITS] shall provide coverage for [MENTAL HEALTH] benefits provided through telehealth by a health care provider licensed in this state and may not require that prior in-person contact occur between a health care provider and a patient before payment is made for covered services.||Inactive — Died.|
|SB 129||An Act relating to the determination by an insurer of a final payment for a covered service or supply; annulling regulations relating to determination by an insurer of a final payment for a covered service or supply based on geographical areas; and providing for an effective date.||Inactive — Died.|
|2017||SB 62||An Act repealing the certificate of need program for health care facilities; making 02 conforming amendments; and providing for an effective date.||Inactive — Died.|
We compile state statutes that relate to healthcare price and competition, including healthcare transparency, markets, and costs. For a complete listing of all health related statutes visit the State Health Practice Database for Research.
Transparency in Healthcare
- Alaska Stat. § 21.06.085 requires health care insurers to use uniform claim forms established by the director of insurance for the purpose of processing data relating to billing for and payment of health care services provided to residents of the state.
- Alaska Stat. § 21.07.010 regulates contracts between health care providers and insurers, stating that a contract may not contain a provision that the provider be compensated for medical care services performed at the same rate as the provider has contracted with another health care insurer.
- Alaska Stat. § 21.51.405 states that “[r]ates charged for a health insurance policy may not be excessive, inadequate, or unfairly discriminatory.” Insurers must file rate changes with the director of insurance, who has an opportunity to demand information and disapprove of the change during the statutorily provided waiting period before the change becomes effective.
- Alaska Stat. § 21.07.020 states that a health care insurance policy must contain a provision that covered medical services shall be reasonably available in the community in which a covered persons resides or that adequate referrals outside the community will be made available if necessary.
- Alaska Stat. § 21.07.030 requires that if a health care insurer offers a policy that provides for coverage of medical services furnished through a network of providers that have entered into a contract with the insurer, the insurer must also offer a non-network option to covered persons at initial enrollment (which may require additional cost-sharing).
- Alaska Stat. 21.36.020 prohibits unfair methods of competition and unfair or deceptive acts or practices in the business of insurance.
- Alaska Stat. § 18.07.031 prohibits health care providers from acquiring, replacing, or adding to their facilities and equipment, except in specified circumstances, without the prior approval of the Department of Health and Human Services through the state’s Certificate of Need process. A Certificate of Need regime aims to reduce healthcare overheard by reducing unnecessary or duplicative services, but can be anticompetitive by increasing regulatory barriers for new entrants.
- Alaska Stat. § 18.09.010 creates the Alaska Health Care Commission to serve as the state health planning and coordinating body, with duties to reduce health care costs by enhancing market forces and increase saving from health information technology, among other things.
- Alaska Stat. § 18.23.300 creates a statewide electronic health information exchange system in order to “promotes a more effective marketplace, greater competition, greater systems analysis, increased choice, enhanced quality, and improved outcomes in health care services.”
- In April 2017, Department of Justice and the FTC issued a joint statement regarding proposed legislation repealing the state’s Certificate of Need (CON) laws. The agencies recommended that Alaska repeal its CON laws, which require healthcare providers to obtain state approval before expanding, establishing new facilities or services, or making certain large capital expenditures.