Alaska lawmakers hear that lapse of enhanced premium tax credits could push thousands uninsured and raise costs

The House Labor and Commerce Committee heard testimony that expiration of the federal enhanced advanced premium tax credits has sharply reduced federal subsidy support for many Alaskans and is likely to push some households to drop coverage, increasing uncompensated care and pressure on hospitals.

Jared Kosin, president and CEO of the Alaska Hospital and Healthcare Association, told the committee the pandemic-era enhancements to premium tax credits expired Dec. 31 after Congress did not extend them. "When those enhancements expired just a couple weeks ago, Alaska lost $43,000,000 in subsidy support," Kosin said, adding that the change affects roughly 27,000–28,000 Alaskans who receive some subsidized coverage. He said many consumers now face "a doubling and tripling of insurance premiums," choices that he warned could lead people to forgo coverage or seek care in emergency rooms, increasing uncompensated costs borne by providers and private payers.

Heather Carpenter, director of the Division of Insurance, provided market context and reviewed the Alaska Reinsurance Program (ARP), a Section 1332 waiver program she said has lowered individual-market rates by roughly 40 percent. "Through calendar year 2025, the waiver has brought in over $800,000,000 back to Alaska and the reinsurance program," Carpenter said, noting the waiver must be renewed before it expires at the end of calendar year 2027. Carpenter said recent CMS data show 25,493 individuals signed up for 2026 coverage during open enrollment (data do not yet show how many effectuated coverage) and that the division provided the committee an updated white paper with examples of consumer cost changes by federal poverty level.

Carpenter described the program’s funding mechanics: insurers submit ceded premiums to the Alaska Comprehensive Health Insurance Association (aCHIA) for claims related to 35 high-cost conditions; federal pass-through awards are then calculated from projected savings. She told the committee the division currently estimates about $85,000,000 will be needed across 2026–27 to make up the difference between the program amount and expected federal pass-through funding, and that ceded premium funds would be used if federal awards are insufficient.

Small-business owners and a broker described direct effects on households and employers. Insurance broker Shayla Teague said the recent enrollment period was "the most difficult of my career," that many clients were in tears over premium shock, and that the marketplace saw about an 11 percent decrease in enrollments this year. Laura Oates Butcher of CNL Creative said her family’s premiums rose from $1,400 a month in 2025 to about $4,250 in 2026, and that the family is now uninsured. Mark Robicoff of AK Bark said his household premium rose from $953 to $2,886 monthly on Jan. 1. Janice Fleischman of Fire Island Rustic Bake Shop said her bakery now pays $13,500 a month to insure 18 employees — roughly $162,000 a year — and that staffing and sick-leave rules have compounded the business burden.

Committee members pressed state officials on rate drivers, whether insurers profit from the subsidies, the role of the state’s 2.7 percent insurance premium tax, and what policy levers could address the root causes of high health-care costs. Carpenter and Kosin emphasized a mix of factors including a sicker risk pool, delayed care creating pent-up claims, federal payer shortfalls, and cost-shifting across payers. Carpenter identified the rural health-care transformation program and investments in primary care and workforce as initiatives the state is reviewing.

The hearing produced no formal legislative action. Committee members requested follow-up data from the Division of Insurance and noted the topic will return to committee. The Division supplied a white paper and examples the committee may use to evaluate policy options and potential funding decisions.