Alaska Journal | The reinsurance program caught up by the failure of the CBR vote


The Alaska House of Representatives turned the tide on June 28 to ensure the entire state government does not close on July 1, but the policy will still leave many long-standing and widely popular programs behind. unfunded for the foreseeable future, including one that has been successful in reducing private sector health insurance premiums.

Lawmakers on the Budget Conference Committee tried to pressure their colleagues to vote for Permanent Fund dividends of around $ 1,100 per person by earmarking the largest amount to fund the Equalization Grant for the United States. electricity costs for rural residents, to state school debt payments to local governments and to $ 114 million. in oil and gas tax credits; the payment of oil and gas tax credits was supported by many Republican supporters for larger PFDs.

Much of the funding for the FPD and other affected programs in the FY2022 budget has been contingent on a favorable vote for the now annual drawdown of the state’s declining savings account, the Constitutional Budget Reserve, which requires a three-quarter vote. to the House and the Senate to access its funds. An affirmative CBR vote also authorizes technical action, known as a “reverse sweep,” which restores program funds at the start of each fiscal year due to a constitutional requirement.

However, the CBR vote failed in both the House and Senate, resulting in a plethora of unfinished or underfunded capital programs and projects, and PFDs of around $ 525 per Alaskan, at least until the legislature meets again.

Among the unfunded programs, there is one that only required lawmakers to approve the acceptance and transfer of federal funds to help offset the unusually high cost of individual health insurance plans in Alaska.

The reinsurance program, the first of its kind in the state, approved by lawmakers in 2017, lowers the cost of health insurance premiums for individual market enrollees by directing premiums for high use of care or health disaster to the Alaska Comprehensive Insurance Association, a nonprofit organization.

The insurance group then looks to the larger individual market to spread the costs for these individuals, thereby reducing the cost for the individual insurance providers. After reaching the highest level in the country, insurance premiums for individual plan holders have mainly declined each year since the program came into effect.

Alaska was eligible to receive approximately $ 78.5 million from the U.S. Department of Health and Human Services to support the reinsurance program through an innovation waiver 1332, according to a March release from the State Insurance Division, but the wording of the budget binds the reinsurance program in reverse. The sweep means the program is currently unfunded for fiscal years 2022 and 2023, according to some House Democrats.

A spokesperson for the Division of Insurance did not answer questions about the situation in time for this story, but the average premium for a consumer on a Bronze Market plan was $ 435 per month in 2020, which was Down about $ 100 per month from 2018 rates, according to the Kaiser Family Foundation.

The House adjourned sine die almost immediately after approving an effective date for the existing budget to avoid a government shutdown, but did not address the CBR vote, while ensuring the host of the affected programs will start the year without the necessary funding.

Senate Speaker Peter Micciche R-Soldotna said in a statement provided by a Senate Majority spokesperson that the caucus will hold internal meetings and discuss with other lawmakers the prospect of addressing CBR and potentially other points before the next extraordinary session convened by the government. Mike Dunleavy – the third this year – begins in early August.

“There is still work to be done: three quarters, the reverse, etc. If there is a way to come to an agreement for short-term sessions before the special session, I think we would have the opportunity to be much more productive, ”said Micciche.

A spokesperson for House Speaker Louise Stutes, R-Kodiak, did not answer questions about the possibility of dealing with the CBR vote until August in time for this story.

Elwood Brehmer can be contacted at [email protected].

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