An Act relating to state employee health insurance.

Updated: April 7, 2000
Contact: Representative Norman Rokeberg at (907) 465-2040

First, the bill will replace funding lost by the Alaska Comprehensive Health Insurance Association (ACHIA) that was eliminated when the State of Alaska went to a self-insured plan. Prior to that, Aetna (the insurance carrier for the State) paid a premium to ACHIA of about $400,000 per year.

ACHIA is an important part of Alaska's efforts to help those individuals who cannot gain insurance coverage elsewhere or who are denied adequate health insurance or considered uninsurable. At the end of 1998, 342 Alaskans were insured under the ACHIA plan, the health insurance of last resort. I would note that these 342 Alaskans pay their own premiums to ACHIA but the state's private health insurers pay $1 to $2 million a year to subsidize the program.

Keeping ACHIA a viable organization so that it can continue to offer coverage is important for all Alaskans. By returning to ACHIA the funds that were deleted when the State went to a self-insured plan, we avoid cost shifting and lower costs to private health insurance companies.

Second, this bill addresses a concern about the state employees health insurance plan. The current Administration has agreed to permit each bargaining unit to opt out of the state employee health plan pool and convert to individual health trusts or join a union-backed and controlled health coalition. The impact of such a move will be that as each individual bargaining unit opts out of the pool and into a trust or coalition, the remaining state employees in the pool would probably see higher premiums and costs for services.

CSHB 345 (L&C) says that the collective bargaining units may negotiate with the state on the issue of health insurance as long as any such negotiations do not involve that unit's stepping out of the state employees health insurance pool. For example, the union can negotiate as to the amount the state will pay for each employee, what will be covered, what type of menus will be available, etc., they just cannot step out of the large pool. For those unions who are currently in trust arrangements, they may keep those trust arrangements active. There are three unions who are involved in health insurance trusts. The three cover over 1500 members who have, in effect, been taken out of the state employee insurance pool. The largest union with 7180 employees (General Government Union) has refused to join the pool that many state employees utilize and thus that reduces the pool further. The larger the pool, the lower the costs.

Currently the state plan insures about 33,660 retirees (members and dependents) and 34,017 active employees and their families. Premiums range from a low of $525.00 to a high of $627 and the employees pays a chunk of that costs. The employee's cost ranges from $50 to $174 per month.

Fundamentally, this bill is not intended to replace the existing plan but to enlarge the pool. This would protect both the employee and the employer.

I would urge your support of this legislation.