Health department staff wanted state insurance exchange

While Alaska won’t create a health insurance exchange on its own, a consultant’s report suggests that some in the state’s Department of Health and Social Services would have liked to see the state take the lead on its own exchange.


The state hired a consultant to report on the state’s options, and following that report, Gov. Sean Parnell said Alaska would not participate in developing its own exchange.

In his announcement last week Parnell cited cost, saying the most expensive option for exchange creation would be to have the state do it.

The consultant, Public Consulting Group, presented a draft report looking at the state’s options in April and a final report in June that was made public the day the decision was announced.

The report warned that relying on the federal government to create an insurance exchange for Alaska was the option that carried the most uncertainty, and warned that it, too, could also be costly.

And the PCG report also indicated that the staff at the Department of Health and Social Services may prefer Alaska develop its own exchange.

“State staff indicate a strong desire for the State of Alaska to find a State specific solution for Exchange creation and a preference to not rely on federal solutions,” the report said.

Parnell spokeswoman Sharon Leighow declined to say what recommendation had been made to the governor by the department staff or Commissioner Bill Streur, and disputed the meaning of the sentence in the PCG report.

“This does not support a state run exchange – only that HSS stressed to PCG Alaska’s unique insurance market and health care delivery system,” Leighow said in an email interview.

When Parnell announced that Alaska would not be developing its own exchange, he said the federal government should pay for the cost of federally mandated programs.

The PCG report cites potential cost as one of the reasons that leaving the creation of an exchange up to the federal government might have its own drawbacks.

The consultants said that Alaska, and all other states, are required under the recently upheld Affordable Care Act to have a single, streamlined form for applying for all state health care subsidy programs. That includes Medicaid, Denali KidCare, health insurance under the exchange and other programs.

That’s called an “eligibility system” and the consultants predicted, based on discussions with state officials, that Alaska would need a new one.

Replacing the entire 1980’s-vintage system could cost in the tens of millions of dollars, with many unknowns about how a federal Exchange system might link up with a state eligibility system.

“For this reason the cost estimate of the eligibility system rule (sic) out a federal option,” PCG said.

The HSS health policy advisor, Josh Applebee, said in an email that the report simply pointed out that it would be important for the eventual solution to look at the specifics in Alaska.

“Even a federally facilitated exchange will need to be State specific in several ways,” he said.

The specific recommendation made by the department to Parnell was not relevant, he said.

“What is relevant is the Governor’s decision after considering all the factors,” Applebee said.

• Contact reporter Pat Forgey at 523-2250 or


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