Jeff Davis, Premera Blue Cross Blue Shield of Alaska, continues as Chair of the Board. I am completing four years as Executive Director, while continuing my involvement since the original founding of the Board in the Fall of 1992. I am pleased to have this opportunity to extend my service to ACHIA and the people of Alaska. Our newest Board member is: David Hill, Assurant. We are pleased to have David join the Board bringing his knowledge of health insurance. Of course, we enjoy the continued service of Brian Angel, AFLAC; Chet Lozowski, Continental General; Shawn Pollock, Physician Mutual; and Marilyn Walsh Kasmar and Mona McAleese, consumer representatives.

Benefit Management (BMI) of Great Bend, Kansas became the administrator in July 2002. For those of you who have been with ACHIA for a while, we hope that you have become comfortable with them. We also hope that you have noticed improved service. The web-based claim data system has greatly improved knowledge and information transfer. We are now in our sixth year with BMI. Recently, BMI’s contract was extended another three years to June 30, 2011. We continue to be interested in comments, positive or negative, regarding BMI’s performance. Please send any comments to the email below or directly to me at oakoffice1@cox.net.

Rising health care costs have resulted in rising health insurance premiums. While the Board has made a good faith effort to keep our premiums as low as possible, the Board is charged by the State of Alaska with maintaining those premiums at a level somewhat greater than the average new business premium being offered by insurers in Alaska. The Board could set the rates as high as 150%, but feels strongly that a lower rate is a more appropriate level. The shortfall incurred by the Association is covered by assessing the health insurers doing business in Alaska. We encourage you to review the most recent Annual Report that is now loaded on this website for more information regarding the financials and the assessment process.

While costs and premiums keep spiraling upward, the assessment base, i.e., insured health plans in Alaska, continues to shrink, or at least not keep pace with ACHIA claims. As the assessment percentage becomes larger, it increases the premiums that groups, primarily small groups, and individuals pay for insured major medical plans. During 2006, the Legislature provided relief from this phenomenon. The 2006 50% premium tax offset legislation will provide an immediate reduction in the net assessments paid out, with offsets recoverable in 2008 for amounts assessed in 2007. While the underlying premium trends will continue upward, small group and individual premium levels will benefit from the assessment recovery, as ultimately those costs are passed through to the policyholders. Of course, the Board will continue its efforts to hold down costs for the program. It should also be noted that the net assessment amounts will continue to grow after this effective one time drop in the net amount being paid by the insurers. In addition, the Board continues to work with State legislators and the Administration to see how ACHIA can be improved.

Previously, ACHIA received some relief due to the Federal Trade Assistance Act enacted in 2003. The Act provided for funding based on losses in 2002 and 2003. ACHIA received $541,883 for 2002 and $483,555 for 2003 losses. Similar legislation was passed on February 1, 2006. This should provide for funding in the five year period 2006 through 2010. ACHIA received a grant of $1,686,122 based on 2005 losses which it began drawing on in late 2006. Unfortunately, while the legislation is for a 5 year program and the first year (2006) was funded, the second year (2007) was not funded. I am pleased to say that recently funding was included in the 2008 Federal budget for this program. However, the initial 2009 budget proposed by the President does not include funding for this program. The ACHIA Board and Executive Director continue to encourage renewal of that funding. Any help that you can give us regarding this would be greatly appreciated.

I want to take this opportunity again to welcome you to our website. Through this website, we are able to easily and inexpensively communicate to our policyholders, as well as prospective applicants. We can more efficiently inform you of current information, advise you of future happenings, and advise you of other creative approaches that might be useful in managing your health care.

Send us your thoughts and comments. We are interested in them.

Cecil Bykerk,
Executive Director
February 2008