News Room

By John Morris, Steven Compton, Ric Davidge and David Morgan • February 18, 2024

There is little scarier than the phrase “I am from the government, and I am here to help,” except perhaps a new version we’ve been hearing lately: “I am an out-of-state insurance salesman, and I am here to help, too.”

Premera Blue Cross Blue Shield, the Seattle-based insurance company with a near-monopoly on Alaska’s health insurance market, boasts more lobbyists (three) than employees in its Anchorage office, but that hasn’t stopped them from working hard to repeal a rule that has protected Alaskans for nearly 20 years. The 80th percentile rule, a longstanding consumer protection that required insurers to pay the going rate in the community for your medical bills rather than an arbitrarily low amount that left you saddled with the rest, was recently repealed following extensive lobbying and marketing by Premera.

In a recent opinion piece full of misleading statements and omitted details, Premera’s Seattle-based market manager, Jim Grazko, indicated Premera has been providing this “help” not to further their bottom line but rather to protect Alaskans from overpaid nurses and overpriced mammograms. In one example, Premera made the case that health care costs are the same in Anchorage as they are in San Francisco. Even if that were true for health care, it is not the case for health insurance. According to the independent health policy organization KFF, a silver plan costs 41% more in Alaska than it does in San Francisco for a family of four. That’s $9,360 more a year for insurance to cover the same-sized medical bills.

By Iris Samuels • January 10, 2024

The Dunleavy administration has repealed a rule meant to lower health care costs, triggering opposition from hundreds of providers who say the regulation is needed. An ongoing lawsuit is challenging the state’s authority to remove it.

Under the rule, which was formally repealed Jan. 1, insurance companies were required to pay out-of-network providers at least the 80th percentile of the average going rate for a medical service. Without the rule, an insurance company is free to pay a lower rate for services — and consumers have to pay the difference.

Since its implementation in 2004, the rule — which applies only to the private insurance market — effectively prevented Alaska patients from receiving large medical bills for out-of-network care. But the state argues the rule also increased the cost of health care over time by incentivizing providers to keep rates high.

The state asserts the repeal can help lower Alaska’s health care costs, which are the highest in the nation.

A broad coalition including physicians, chiropractors, physical therapists, podiatrists and more — representing the vast majority of healthcare providers in Alaska — recently brought suit to stop the repeal of the longstanding consumer protection known as the 80th Percentile Rule. As a member of that coalition, and a concerned Alaskan, let me explain to Must Read Alaska readers why:

After months of attempting to communicate in good faith with the Alaska Division of Insurance about the dangers of repealing the 80th Percentile Rule without a workable replacement, our coalition reluctantly took legal action to protect the countless Alaska families, workers and patients who will be impacted by this misguided repeal. If the repeal is allowed to stand, the elimination of this rule will severely jeopardize Alaskans’ ability to receive healthcare here at home, will return us to the days before the rule’s implementation in 2004 when Alaskans were saddled with surprise medical bills on top of their already high insurance premiums, and will result in little if any of the promised cost savings.

Every Alaskan, regardless of their politics or background, should care about this lawsuit because repeal of the 80th Percentile Rule all but guarantees an Alaska where it will be even harder to find a doctor, where wait times will dramatically increase, and where patients will have to pay even more out of their own pocket for healthcare.

Anchorage, AK — The Coalition for Reliable Medical Access, along with several prominent healthcare organizations, including the Alaska State Medical Association, the Alaska Medical Group Management Association, the Alaska Podiatric Medical Association, the Alaska Physical Therapy Association, Inc., and the Alaska Chiropractic Society, is taking legal action to challenge the recent decision by the Alaska Division of Insurance (ADOI) to repeal the 80th Percentile Rule.

“After months of attempting to communicate with the Alaska Division of Insurance on the dangers of repealing the 80th Percentile Rule without a replacement, we have reluctantly filed suit to protect the countless Alaska families, workers and patients impacted by this misguided regulatory repeal. Every downstream result of abolishing the 80th percentile rule and its consumer protections means less access to care, fewer doctors to see, bigger bills for patients, and the return of the predatory insurance practices that the rule successfully worked to eliminate,” said Dr. John Morris, Chair of the Coalition for Reliable Medical Access.

ANCHORAGE, Alaska (KTUU) - The state of Alaska is proposing changes to and repeal of a health care-related policy that could alter payment practices for providers, and in turn patients, across the state.

The change to a longstanding policy known as the 80th percentile rule, which would require alterations to Title 3 of the Alaska Administrative Code, is being pushed by the Division of Insurance and at least one major health care provider that serves Alaskans with health insurance.

The policy, as written, requires health care insurers to pay out-of-network health care providers for covered services and supplies based on an amount that is equal to or greater than the 80th percentile of charges in the geographical area.

Despite the provision having been established as a way to protect consumers and keep costs from being astronomical, proponents of the move claim the change would reduce health care costs in Alaska. However, people against the removal of the policy caution against what it could do to already costly visits.

I am writing to comment on the Alaska Division of Insurance’s proposed changes to 3AAC26.110, specifically, the deletion of paragraphs (a)(1) and (a)(2), and the revision of paragraphs (4) and (5)(A). Alaska Hand Rehabilitation opposes the proposed changes. As president-elect of the Alaska Medical Group Management Association and an Alaskan consumer of health care, I also oppose the proposed changes.

Our concern is that the proposed changes further unbalance the patient/provider/carrier relationship in the carrier’s favor. Simply put, the proposed regulation changes grant more power to the carriers to force medical providers into their networks. Many of our members are small or single-practice providers. Many patients prefer this simple, personalized treatment setting. Large providers, such as corporate chains/hospitals, have negotiating power in contract negotiations with carriers. For our smaller members, it’s “take it or leave it” -- join our network for a drastically reduced reimbursement, treat the patient for free, or be forced to not accept patients for most payer populations.

Alaska physicians have taken an oath to care for our communities, protect our patients and do no harm. Unfortunately, insurance companies and special interests take no such oath. This is why it is our duty to ensure the 80th percentile rule is preserved.

The 80th percentile rule is an important regulation to protect Alaska patients and consumers from predatory practices by insurance companies. It was adopted by the state due to the volume of complaints from Alaskans that their insurance company was not paying their medical bills and Alaskans were left paying more than their health insurance policy promised. It was designed to ensure insurance companies based outside of Alaska do not pay only part of your medical bill and saddle the patient with the remainder. It protects Alaskans from insurance companies and, more importantly, the 80th percentile rule works. Multiple states have similar laws, regulations or rules; we are hardly the first or the only. The new federal No Surprises Act, touted by insurance companies as a reason to eliminate the 80th percentile rule, only provides some protection for emergency services --it does not replace the 80th percentile rule -- and is mired in litigation across the country.

State officials want to repeal a policy established nearly 20 years ago to protect Alaskans from surprise medical bills that’s now being blamed for soaring health care costs in the state.

Some, like the Alaska State Medical Association and numerous physicians, say repealing the rule would remove an important consumer protection and could lead to higher health care costs for patients and fewer specialists, particularly in rural Alaska.

But one of the largest insurance companies in the state wants the rule to go, claiming that it has actually contributed to Alaska’s high health care costs by incentivizing health providers to raise prices over time.