- Associated Press - Thursday, August 27, 2015

JUNEAU, Alaska (AP) - Alaska’s Division of Insurance has approved average rate increases for next year of nearly 40 percent for the two companies providing individual health insurance plans through the federally run online marketplace.

Division director Lori Wing-Heier said Thursday that Premera Blue Cross Blue Shield and Moda Health cited the high cost of medical services as one of the factors in requesting rate increases.

She also said Alaska has a relatively small market and very small group of individuals with high-cost claims.

Wing-Heier said the average rate increase approved for Premera was 38.7 percent and 39.6 percent for Moda. She said that applies to individual plans on and off the online marketplace. The division approved the increases Tuesday.

She said she could not respond to questions about what increases the companies requested, noting that filings are considered confidential until Jan. 1. However, Premera, on its website, said it requested an average increase of 38.7 percent. A Moda spokesman did not immediately respond to a request for comment.

Premera says it lost more than $9 million in Alaska last year serving individuals with so-called platinum, gold, silver and bronze plans under the federal health care law and expects to lose a similar amount based on claims data from the first three months of this year.

“The key here is the lack of a large enough pool to spread the costs of members with very significant medical needs,” the company said. “Again, these individuals deserve access to coverage and we’re working with state officials to find a solution to this challenge for Alaskans.”

Premera and Moda are poised to be the major insurers remaining in Alaska for individual health policies. The division previously announced plans by Aetna and State Farm to pull out of the individual plan market in Alaska and by Assurant Health to leave the health insurance market altogether.

Wing-Heier said the high cost of health care in Alaska has been a long-standing concern, with no clear answers for getting a real handle on it.

The small group market has continued to perform well, she said, with average increases approved of 4.3 percent for Premera and 9 percent for Moda.

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