State ruling to change medevac insurance plans
WRANGELL — An Alaska Division of Insurance ruling will effectively cancel a widely used medical evacuation membership plan across Southeast.
The ruling, issued in a letter of judgment Nov. 12, effectively invalidates the Airlift Northwest’s Alaska AirCare membership plan. Airlift Northwest is a subsidiary of the University of Washington, and until mid-November the Alaska AirCare membership plan was designed to eliminate co-payments for emergency medical costs in Southeast.
Wrangell citizens typically use a combination of plans to cover the costs of medical transportation in the event of an emergency, health officials said. The largest provider in Southeast is Apollo MediTrans, which offers an individual plan for an annual payment of $179. Up until its cancellation, the Alaska AirCare program membership cost $79. A similar family plan offered by Guardian Flight – the state’s largest provider of medical evacuation services – cost $60 without health insurance, or $30 with insurance, until the company’s Plus Program, a product virtually identical to the Alaska AirCare program, was struck down under a similar ruling about a year ago, said Shannon Pollock, Vice President of Business Development for Guardian Flight.
The Division of Insurance’s ruling cites Alaska statutes and outlines the State’s determination that as a component of the University of Washington, Airlift Northwest is neither a medical service corporation nor a non-profit association, two entities entitled to exemptions to Alaska Title 21 under existing statutes.
A membership in the Alaska AirCare program doesn’t provide an actual medical service, but rather a medical benefit, said Marty Hester, Deputy Director with the Division of Insurance.
“If I have AirCare membership and I took a flight from Wrangell to Seattle … and I had ABC insurance, the AirCare program is still gonna bill the insurance company,” he said.
Instead of providing the service itself, the program provides a financial benefit once removed from the service, Hester said, which accounts for the distinction.
As a result, the company must reorganize into an insurance company in order to sell insurance inside Alaska, according to the letter of determination. They would be subjected to different solvency requirements and adhere to a very different set of regulations.
The company doesn’t intend to apply for insurance product licensure, said Airlift Northwest Executive Director Chris Martin.
“We’re not a for-profit service,” she said. “All we do is cover our costs and offer a 2 percent margin, and that’s fuel and to replace equipment.”
“We fly anybody, whether they have insurance or not,” she added.
The company’s best way forward may be to change Alaska law, Martin said.
“We’re really disappointed,” she said. “We believe that their decision to stop us from selling is a disservice to the citizens of southeast Alaska, and probably what’s going to have to happen is a statute change.”
Officials with local hospitals said the exact impact of the decision to Southeast consumers was hard to determine.
At Petersburg Medical Center, hospital personnel conduct two or three medical evacuations per month in the winter, and about five or six evacuations per month in the summer, estimated CEO Elizabeth Woodyard.
That figure is lower than the national average of about seven per month, taken from the number of annual flights (about 500,000 annually in combination of fixed-wing and helicopter flights, according to the Association of Air Medical Services website) and the total number of hospitals in the U.S. (5,724, according to the American Hospital Association website).
“I don’t have an opinion on whether it would be a good decision or a bad decision,” Woodyard said. “We just want our patients to be taken care of.”
Wrangell Medical Center personnel conducted 70 medical evacuations in the fiscal year ending June 30, 2013, or an average of almost six flights per month, though in reality, the flights don’t space out evenly, said Wrangell Medical Center CEO Marla Sanger.
“We could go for a long time without any, and then get a bunch all at once,” she said.
Officials in Southeast were “waiting to see how it’s all gonna play out,” she added. “We don’t get involved in the billing. This will ultimately settle itself out, and care will be provided despite this insurance issue.”