Open Enrollment 2017Why are we making changes?

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Why are there new changes going into effect January 1, 2017

In a nutshell, the changes are designed to control costs and maintain quality benefits for our AlaskaCare participants.

The health care system in the United States is widely regarded as one of the most expensive in the world, and Alaska has the dubious distinction of having some of the highest health care costs in the United States. While the price of health care benefits continues to rise, the state faces an unprecedented fiscal crisis. The cost of providing AlaskaCare employees health benefits is exceeding the plan’s revenue by significant amounts on a monthly basis. This has left the plan underfunded. Our goal is to strengthen the health plan’s ability to pay benefit costs and put it back on a healthy fiscal path. To achieve this we have four different levers or tools that we are using:

  • Increase employee contributions
  • Implement plan design changes that generate savings
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  • Pursue additional savings in our purchasing agreements
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  • Increase employer contributions

Our goal is to generate a combination of revenue and savings by using all four of these levers, and not relying too heavily on a single approach. Each of the changes implemented on January 1, 2017, have been evaluated in this context. While we have tried to limit the negative financial impacts to our employees and their families, today’s budget reality does not allow the state to shoulder the cost increases alone. Consequently, the new plan requires an increase to the employee cost share and a more restrictive benefit design that is intended to deliver a quality benefit while also controlling costs.

We are actively working towards providing access to additional new tools that will result in savings for both members and the plan. You can expect to hear more in the coming months. One initiative includes access to special clinics where members can receive primary care and generic medications at a low, fixed fee. We are also working on adding a comprehensive travel benefit that would simplify the process of traveling to locations where the cost for procedures is less.