Interview: “The ineptitude and ineffectiveness of lawmakers in Juneau”

Albert Fogle

Albert Fogle, AAHU President Elect

I caught up with Albert Fogle, the President-Elect of the Alaska Association of Health Underwriters (AAHU), Alaska’s voice for insurance brokers and agents. He is also an Employee Benefits Consultant at Northrim Benefits Group, and sits on AAHU’s Legislative Committee.

I asked him about the state of health care reform in Alaska, the likelihood of a successful session in Juneau, and what he makes of the State of Alaska’s handling of the Moda story.

DJ Wilson: I’m sure you saw a number of different sides to the story about Moda being suspended, and then let back into the Alaska market. What did you make of watching that unfold?

Albert Fogle:   I think the Division of Insurance could have handled the situation much better. The DOI could have given Moda Health advanced notice and a chance to come to an agreement before suspending the health insurance carrier. The goal is to have more insurance carriers in Alaska to drive more competition in our market.

DW: You sit on AAHU’s Legislative Committee. How likely are we to get legislation out of Juneau this year that will help stabilize the individual market in Alaska?

AF: Not likely. When you have legislators that don’t even know how our health care system works, let alone that they even know there is a problem, how can we expect anything to get accomplished?

With the ineptitude and ineffectiveness of the lawmakers in Juneau when it comes to health care, plus the weight of the budget deficit, you add that all up and I don’t think they will pass anything this year.

DW: Do you think there is any chance we get a tax package that garners enough support from lawmakers that they are able to end on time?

AF: The legislators are definitely going to have to use a portion of the PFD to get through the budget problem. I’m personally against any new taxation, because once tax is in place, legislators very rarely repeal taxation. Plus the amount of money the legislator would raise in taxes is an insignificant amount of money when compared to the $3.5 Billion dollar deficit. I think we can get through this impasse with cuts to the size of government, plus utilization of a portion of the Permanent Fund.

DW: You’ve been on the Legislative Committee for AAHU for 5 years. Tell me about AAHU’s agenda for this session.

AF: We have three priorities for this and the next coming session. First, we’d like to repeal and replace the 80% percentile rule. This rule allows providers, particularly specialty providers to be paid no less than 80% of whatever the market is charging overall. This regulation continues to drive up the cost of healthcare in Alaska.

The second is transparency. We think pricing should be available to consumers for healthcare services and procedures at the point they enter a provider’s office.

And third is a re-insurance pool that will provide some cost support for high-cost individuals.

Given the dynamics of the legislative session, I don’t think we’re going to get this re-insurance program passed. But, the 10% health care cost trend year after year is not sustainable.

On the 80% rule, I am of the opinion that the Director of the Division of Insurance could make a change to the 80th percentile rule, if she wanted to but we are told the Director is still studying the concept of changing the regulation.   We may need to look to the legislature if the regulation cannot be changed administratively.

DW: If the re-insurance pool doesn’t pass, do you think Alaska will have an individual market next year?

AF: Yes, Alaska will at least we’ll have Premera as an option. Premera is probably like the idea of being the only individual carrier because they can skew plan and network design to control health care costs. The individual market in Alaska for both Moda Health and Premera has been a losing game since the ACA inception. It’s basically charity.

DW: We’re building an argument that there is a lot of blame to go around regarding Moda’s challenges in Alaska. That includes policy matters as well, like the ending of the high risk pool and grandfathering in old, pre-2014 plans, and allowing them to move forward into 2014. What do you think of that line of thinking?

AF: Absolutely. It’s never just one smoking bullet it’s always a combination of things. The high cost of healthcare, consistent high and over utilization, small population and the transition of the ACHIA population into the exchanges. Not to mention the Federal Government not fulfilling their obligation to refund carriers for excessive losses. The grandfathered plans do have a small effect on the overall pricing of the individual health plans since the grandfathered plans tend to perform better. But another factor is that small business owners that would normally purchase an individual plan in the past are now buying group health insurance policies since the pricing in the small group market is now lower than the individual market.

Instead of the convoluted ACA law, If Congress simply created an ACHIA (high risk pool) plan for each state, we wouldn’t have as high as healthcare cost as we do now and all of the other problem we hear of everyday in the news. Another solution would be to allow states to band together – states like Wyoming, North Dakota, South Dakota, Idaho, Montana, small western states – let us band together to create a bigger pool, that potentially would help. One other alternative would be to allow employers to group together and form larger risk pools.