Health reform may hurt seniors, Alaska economy

Public option will drive up medical costs, UA consultant says

Posted: Sunday, December 13, 2009

ANCHORAGE - Proposed health care reform bills that would extend insurance coverage to thousands of uninsured Alaskans may not be good for seniors or the state economy.

An economic consultant for the University of Alaska who is tracking health care bills in Congress says a bill passed by the U.S. House last month could make it harder for older Alaskans on Medicare to get in to see doctors.

Consultant Mark Foster says many seniors already can't find primary care doctors who will accept Medicare because it pays doctors below Alaska market rates.

Foster, a contract consultant for the Institute for Social and Economic Research, an arm of the University of Alaska Anchorage, analyzed the House proposal in a report.

He noted the House bill, and a Senate bill also pending, would expand Medicaid, the joint federal-state health insurance available to low-income people.

In most states, Medicare pays better than Medicaid.

But Foster says expanding Medicaid, and the House proposal to establish a new government-sponsored insurance program called the public option, would likely drive up medical care costs in Alaska.

In his report, he said "thousands of additional Alaskans will essentially move ahead of Medicare beneficiaries in line for health care" as a result.

If Alaskans have to pay more taxes for medical care but get less back, the state economy could suffer, Foster said.

A Congressional Budget Office report on the Senate proposal says the cost of health care premiums for businesses small or large would remain about the same nationally with or without the Senate bill.

Foster, however, said the House version would stress Alaska's small employers with a mandate to provide employee health insurance.

The provision "could be especially disruptive to Alaska, compared with states that have lower costs and fewer small employers," Foster wrote.

Alaska's two U.S. senators differ on how Alaskans who have individual insurance would fare under the Senate bill.

Health insurance premiums for this group would generally rise 10 percent to 13 percent nationally, but more than half the people would be eligible for government subsidies to buy the insurance. For those people, costs generally would drop.

Republican Sen. Lisa Murkowski said nearly 28,000 Alaskans - an estimate of the pool of people who have individual insurance policies - would see premiums rise.

Premiums wouldn't rise for the portion of that group that gets subsidies.

Foster said he doesn't yet know how many people that would affect in Alaska.

Democratic Sen. Mark Begich said people with individual policies in Alaska could see premiums shrink. But he was talking about people who already have decent individual health care coverage and could get the same level of insurance for less.

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