The Last Frontier is known for its rugged terrain and natural beauty. What it isn't known for is its readily accessible hospitals and doctor offices. Those interested in the healthcare system in Alaska should start by knowing their options.
About 50% of all people in the state are insured through their employer, with employers paying about 75% of the total cost of the plan. There's also public health insurance like Medicare and Medicaid, or you can go through brokers or agents to secure a private policy.
Major carriers such as UnitedHealthcare, Blue Cross Blue Shield, Agile Healthcare, HealthNet, and Allied Coverage give Alaskans a wide array of options from which to choose. Average premiums can go as high as $1,150 a month for those 60 or over, while those under 25 can expect to pay closer to $425.
As Alaskans browse the available options, they'll likely come across the following types of plans:
- PPO: A preferred provider organization gives the insured the option to see any doctor they wish.
- HMO: With an HMO, patients are assigned a primary care doctor. Any specialists will need to be approved by the primary physician.
- Fee for service: Patients pay about 20% of their healthcare costs with this type of insurance, and they're allowed to choose the location of their treatment.
- Point of Service: The point-of-service plan assigns a primary care doctor but still allows patients to see doctors outside the networks.
Breaking It Down
These plans can become very complex when it comes to what is covered and what isn't. Policies may come with several pages worth of regulations and terms, and it's not always easy to understand what a person will pay by the time all is said and done. That's why it's important for people to take into account a variety of scenarios.
For example, a PPO may be more expensive in terms of premium cost than an HMO. However, if the patient needs a specialist, it may mean paying less overall. A managed care plan and HMO both negotiate fees specifically with a certain network. As patients drift out of that network, the insurance carrier can no longer control costs.
What Health Insurance Covers
Health insurance typically covers the basics, including doctor visits, surgery, lab tests, and emergency care. It may also cover less standard care, such as addiction treatment, mental health services, and chiropractic care. There are certain regulations all insurance plans need to follow, but there's also a lot of leeway between plans. Never assume something is covered until clarifying the terms of each plan. Those who need eye care, dental care, cosmetic services, or infertility treatment will likely need to go outside their health insurance plan.
When to Sign Up
Like the rest of the country, health insurance can typically only be purchased during the open enrollment period (Nov 1 – Dec 15). However, Alaskans who experience a life-qualifying event (e.g., getting married, having a child, or losing coverage through an employer, parent, or spouse) do have the option to sign up whenever the event occurs. How much a person will pay for the plan at the time of sign-up will depend on where they live, their general lifestyle, and their age. For example, smokers can expect to pay more for their premium than nonsmokers.
The state of Alaska has higher medical costs. As one might imagine, the premiums for healthcare reflect the per capita spending. There are a few reasons for this:
- The isolation from larger markets and smaller population translate to fewer medical providers and fewer insurance providers.
- The providers in big cities demand higher salaries, and the hospitals in Alaska boast higher profits than the national average.
- There are almost no government or teaching hospitals in the state.
- When people do need care, they may not live very close to a provider—they may not even live close to a usable road.
In addition to the above, Alaska also enforces the 80th percentile rule, or a regulation requiring insurers to pay out-of-network claims at a specific minimum. It was originally meant to protect Alaskans from high medical bills by forcing insurers to pay at least 80% of the average costs of what other providers charge for a service. (This rule doesn't necessarily mean 80% of all bills will be covered.) Many have said this rule has pushed spending for Alaska healthcare though. When specialty doctors may charge more than 500% in Alaska as opposed to outside, it's easy to see how the numbers could skyrocket.
Potential Cost Reductions
Despite the factors working against Alaska, the state did not always have higher costs. Healthcare experts want to see more telemedicine practiced in the state, giving people a way to access personalized advice without having to travel. Professionals also want to see more community programs to improve general wellness within the state. More awareness in the state can translate to lower costs for all.
The more Alaskans understand the healthcare options and landscape in their state, the easier it can be to choose a plan. Some people will look outside the state, traveling to the Lower 48, Canada, or other countries for lower-cost medical services. However, there are options available for those who need local coverage and specialized care.