Alaska's GOP creates fund to prevent collapse of Obamacare exchange

The death spiral has finally hit Obamacare, at least in one state. GOP politicians in Alaska who say they are opposed to the law are creating a new fund to prevent it from collapsing.

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Alaska has already lost several of the insurers on its Obamacare exchange. Next year it will be down to just one remaining company selling policies. That company, Blue Cross Blue Shield, will need to raise premiums substantially in order to cover costs. Faced with the possible collapse of the state’s exchange, which currently insures 23,000 people, the state’s Republican governor recommended passing a law to use state funds to keep prices down. Politico reports on the surprising turn of events:

The legislation, originally proposed by [Gov. Bill] Walker, 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 and an exodus by all except one insurance company…

Republican state lawmakers, who sued Walker for expanding Medicaid under the health law, swear they remain opposed to Obamacare. But they say they’re doing what’s necessary to prevent health insurance premiums from spiraling out of control and letting thousands of people lose their coverage.

“What I’m getting — and I guarantee what the Alaska Legislature’s getting — is constituents pleading with them for help,” Sen. Dan Sullivan (R-Alaska) told POLITICO. “There’s been no state in the union more negatively impacted by Obamacare than Alaska.”

Alaskans already faced high costs but their Obamacare prices are the highest in the nation:

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An analysis of average 2016 Obamacare premiums from Avalere Health, a consulting firm, showed that the lowest-cost “silver” level plan in Alaska cost $956 per month before any subsidies were factored in — the highest rate in the nation. That amount is 40 percent higher than the year before.

Alaskan Republicans face an unenviable choice. They can either put the program they didn’t want in the first place on state life support or they can let the market take its course, which will create more disruption for tens of thousands of Alaskans. Republican state Rep. Lance Pruitt tells Politico, “Are we trying to maintain ACA? I think what we’re trying to do is live within the new reality that’s out there.” In other words, they don’t really have much of a choice since the federal law mandates this.

Politically, having Republicans work to save the president’s signature achievement in a red state must look like a win for progressives. However it doesn’t seem like a win for Alaskans who are left with few choices and insurance that requires both state and federal subsidies to remain even somewhat “affordable.”

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