5 Things Big, Lower-48 Insurance Companies Don’t Want You to Know About the Repeal of the 80th Percentile Rule:

Lower-48 insurance companies and the Alaska Division of Insurance recently abolished Alaska’s 80th Percentile Rule, a 2004 State of Alaska regulation implemented to protect patients, families and workers from predatory bill practices, exorbitant out-of-pocket medical costs and surprise medical billing.  In short, the rule states that health insurers must reimburse out-of-network healthcare providers at an amount equal to or greater than the 80th percentile of charges in a community, rather than unilaterally determining an amount and saddling patients with the remainder. If this repeal is allowed to stand without adequate guardrails in place, the impacts will be devastating to Alaska’s healthcare system, especially for our seniors, veterans, rural residents and other vulnerable populations who already struggle to find adequate medical access in Alaska.

Here are 5 Things Big, Lower-48 Insurance Companies Don’t Want You to Know About the Repeal of the 80th Percentile Rule:

  1. Fewer Consumer Protections: The 80th Percentile Rule provided Alaska patients with protections against predatory billing practices and surprise medical billing. Its repeal means fewer safeguards for policyholders, exposing them to greater risks without the safety net provided by the regulation.

  2. Shift in Power Away from Patients and Doctors: With the 80th Percentile Rule gone, access to reliable medical care in Alaska will be significantly impacted. That’s because the 80th Percentile Rule prevents insurance companies from completely controlling Alaska’s healthcare system. Without the 80th Percentile Rule, insurance companies have all the bargaining power, deciding which doctors you see, when and where you’ll see them, and arbitrarily deciding how much they’ll pay. Providers will be forced out-of-network by insurers who see no reason to contract with them and seek to narrow their networks.

  3. Premiums Are on the Rise: Despite, big out of state insurance companies insisting that the repeal of the 80th Percentile Rule would result in lower rates, premiums for Alaskans are set to skyrocket in 2024 –– with one insurer raising rates by 17.8%.

  4. Decreased Competition: Without Alaska's 80th Percentile Rule, insurance companies have ZERO incentive to negotiate with your doctor. The result – they get to pick the winners and losers in our healthcare system; shrinking our healthcare market, reducing access, and driving specialists out of Alaska. For vulnerable populations like seniors, veterans, and rural residents, this would be catastrophic and would result in less access to care at home. Providers will be forced to limit or stop seeing non-privately insured payers all together as their fees will be drastically cut by insurers.

  5. Insurance Companies Continue to Reimburse Alaska Doctors Less, While Increasing Patient Premiums: Despite claiming doctors and medical providers are the primary driver of rising health insurance premiums, out-of-state insurance companies reimburse Alaska doctors less and less each year. How can local doctors be the problem if insurance companies pay them less but charges you more?