Captain Zero Goes Too Far: Health Insurance Premiums

Would You Trust This Man with Your Money?

Would You Trust This Man with Your Money?

Normally WC doesn’t get this worked up about the election antics of our politicians, but Governor Sean “Captain Zero” Parnell’s machinations of Alaska’s health insurance premiums, as Dermot Cole, puts it, crossed a line.

“Health insurance premiums are going ‘way up!,” Captain Zero is shouting. “It’s that evil Obamacare!”

That’s a lie.

It was Captain Zero’s decision to deny Medicaid expansion, a program expansion that would have been paid for by the federal government. The Captain didn’t have a real reason for denying Medicaid expansion except, you know, Obamacare. As everyone except Captain Zero understood, those folks who didn’t get Medicaid coverage still got sick, still had to get treatment, and still couldn’t pay. So their treatment costs got passed along to the rest of us as a part of general overhead. Those increased base costs get paid by our insurers, which results in higher rates. Pretty clearly, Captain Zero’s decision to deny Medicaid expansion significantly contributed to insurance rate increases.

It was Captain Zero’s decision to refuse to establish an Alaska Health Care Exchange, leaving it to the Feds to create one for Alaska. If Captain Zero had created a state-controlled health care exchange, and put some effort into encouraging new vendors to enter the Alaska marketplace, there would have been more competition, and lower rates. As it is, there are only two entrants. What economists call an oligopoly. There’s little meaningful price competition in an oligopoly. Captain Zero’s decision to deny Alaskans a health care exchange significantly contributed to health insurance rate increases. For the same reason, Commissioner Susan Bell’s claim that with “just 16,000 enrollees,” Alaska’s market is too small to pool the risks is untenable when her boss sabotaged enrollment. And shame on Commissioner Bell for allowing herself to be used in such a callow way.

It was Captain Zero’s decision not to put in place a more effective insurance premium review processes. According to the non-partisan Kaiser Family Foundation, Alaska’s insurance rate review has the weakest, bare minimum regulatory standards for insurance premium oversight. There were federal funds available to help Alaska improve those review standards. Captain Zero rejected them. And the health insurance providers in Alaska know that Captain Zero stayed with weak review standards. Captain Zero’s decision to leave Alaska with weak review standards significantly contributed to health insurance rate increases.

Captain Zero claims that he has gone over the proposed rate increases “with a fine toothed comb.” But he hasn’t provided a shred of evidence to support that claim. We haven’t seen any documents analyzing the proposed rate increases. We haven’t seen any detailed study. We can’t even see the new rates until January 1, because we have such pitifully weak review standards. Captain Zero is selling us a new car but refusing to show us the price sticker so we can see what we’re buying or what it’s going to cost. WC doesn’t trust the Captain as far as WC could throw him. WC would bet a cup of designer coffee that the Captain simply signed off without serious examination or negotiation.

Having taken this series of steps to sabotage the Affordable Care Act at the expense of Alaskans, Captain Zero is now shouting that health insurance reform is a failure. Having done everything in his power to sink health care reform, he is proclaiming it is a failure.

it’s actually worse than that. His administration has issued a press release with the same message, but also blaming the rate increases on “health care utilizers.”

Between Jan. 1 and June 30, 2014, we had more than $7 million in medical claims from only 33 Alaska members on individual plans under the ACA. That’s roughly one-third of all the medical claims costs for all 7,000 members on our individual plans under the ACA.

Dermot Cole, WC thinks, is understandably annoyed about this highly misleading claim. After all, his late brother, Pat Cole, died after a heart transplant failed. A family visited by tragedy and heartbreak is entitled to be annoyed when a bureaucrat sneers at Pat Cole and his family as “health care utilizers.” It’s also hardly news. Everyone in the health care industry understands that a small percentage of your insured base consume most of the health care services. A smart governor, a proactive administration, a politician interested in solving the problem instead of political sabotage, would work with the health industry to better manage expensive patients. There have been successes in other states.

But that wouldn’t serve Captain Zero’s purpose. That wouldn’t serve Captain Zero’s political agenda. He prefers to blame the victims. If Alaskans get higher health insurance premiums as result of the Captain’s war on Obamacare, that’s just collateral damage.