Report: Controlling Health Care Costs in Alaska

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Health care costs have been a very public topic of discussion in America for years, and the discussion was brought to the forefront with the passage of the Affordable Care Act (ACA) in 2010. We were assured by some that the ACA would bring down costs for all Americans, thus the name “affordable.” But for those of us in the free-market policy world, it was clear that almost none of the reforms included in the ACA were designed to create more competition in the health care marketplace—and competition is a significant factor in lowering costs.

In the years since the ACA became law, most Alaskans have found their health care costs going not down, but up. By some measures, in fact, Alaska has the most expensive health care in the country. There have been many studies and theories posited over the years about why this is so. And yet the high costs continue with no significant reforms to address this far-reaching state problem.

Health care costs affect so much that matters. These costs influence the actual health of people, as individuals forgo essential and preventative care simply because they cannot afford it. These costs shape our labor market, as employers try to balance providing quality coverage to attract superior employees with rapidly increasing health care costs. These costs affect our state economy, as the health care industry provides much-needed and high-paying jobs. And of particular interest to policymakers, health care costs make up significant portions of our government budgets: the state of Alaska pays out hundreds of millions of dollars each year for Medicaid claims, and hundreds more for state employee health care coverage.

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