TL/DR –
The Alaska Legislature has approved a bill authorizing direct health agreements, a concept akin to a gym membership for basic healthcare services. These agreements, clarified in Senate Bill 45, are not insurance and can’t be regulated as such, with the aim to bypass insurance company markups and reduce cost. However, it’s stated that emergency care or specialty services might not be covered in these agreements, and there are concerns over whether it’ll help those who need emergency care or are confronted with large bills.
The Alaska Legislature approves gym-like healthcare approach
The Alaska Legislature has given the green light to a new healthcare model similar to gym membership. The state House pushed Senate Bill 45 through in a 28-12 vote, enabling direct health agreements, essentially a subscription for primary healthcare.
Per SB 45, these agreements are not classified as insurance and are therefore not subject to the same regulations. As Representative Kevin McCabe, R-Big Lake, explained, existing laws in Alaska cast doubt on the legality of these arrangements.
Subscription-based healthcare to tackle high costs
SB 45 was passed by senators in May 2023, making it the fourth bill this year to receive approval from both the House and Senate. The move is aimed at cutting through insurance company markups to reduce Alaska’s notoriously high healthcare costs.
Patients can sign up for direct health agreements with local healthcare providers to receive basic care services. However, emergency and specialty care may not be covered by these agreements. As Rep. McCabe put it, “Direct health care agreements work similarly to a gym membership…”
Healthcare access, cost and consumer protection on the agenda
Representative Genevieve Mina, D-Anchorage, has reservations about whether the new approach will help Alaskans needing emergency care or facing larger bills. During the House floor debates, amendments were made to SB 45, mandating health care providers to have 20% of their patients uninsured or on Medicare. Additional consumer protection language was added.
Concerns were also raised about non-Alaskan private equity firms buying clinics and offering cut-rate services, potentially making it impossible for Alaska-owned businesses to operate.
Next steps for SB 45
SB 45 awaits reconsideration in the House, following which it will return to the Senate for approval of the House’s changes. If passed, it goes to Governor Mike Dunleavy for final approval. If the senate rejects the changes, a compromise version will be drafted by a select group of legislators.
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