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Insurer expected to get bigger with health exchange

Posted: August 27, 2013 - 12:01am

ANCHORAGE — Alaska’s largest health insurance company expects to get bigger when the federally run health insurance exchange begins offering plans in the state.

Premera Blue Cross Blue Shield, one of two companies that will offer plans on the exchange, expects thousands more customers in Alaska, though that growth comes with uncertainty, APRN reported.

An exchange is a marketplace for coverage options, made available under the federal health care law. The state of Alaska opted to let the feds set up an exchange for the state.

Jeff Davis, president of Premera Blue Cross Blue Shield of Alaska, said the number of individual customers the company has in Alaska could double from the current 10,000 by the end of next year due to the exchange. He said Premera, however, is prepared for the possibility it could lose a lot of money in 2014 due to the uncertainty of who comes in, when.

For the first time, insurers won’t be able to exclude customers with pre-existing conditions. While the law has provisions to help lessen the impact, such as open enrollment periods, Davis thinks the first people to sign up will have significant health problems, followed by healthier people, particularly those who qualify for subsidies. Anyone earning less than $57,000 a year would qualify for subsidies in Alaska.

For those who don’t get subsidies, individual insurance could be expensive. Premera says most rates it filed to offer on the exchange are higher than its current plans. That’s because the policies offered must have better benefits and smaller deductibles than the most popular plans today, Davis said.

A young family of four, earning more than $117,000 a year, is likely to see the biggest out-of-pocket increase, because they won’t qualify for a subsidy, he said.

Come Jan. 1, some people will pay significantly more out of pocket and some significantly less, he said. “And it’s just that upheaval and that mix that worries me.”

It’s unclear what the online marketplace will look like when it’s up and running Oct. 1. Davis expects it to be functional, but likely bare-bones at first, with additional features added later.

Susan Johnson, the regional administrator for the federal Health and Human Services Department, said it won’t be perfect right away. But she said the exchange will be a big step forward for how people buy insurance.

Davis likened the experience to a roller-coaster ride that in a couple of years will lead to a new normal where more Alaskans have health insurance.

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