The key to Alaska's future is our multigenerational culture. Our seniors, parents, grandparents, uncles, aunts, friends and neighbors, bring tremendous value to Alaska. Seniors contribute $1.6 billion to the Alaska economy each year but immeasurably more valuable is the mentoring, grand-parenting, parenting, volunteering, and knowledge base they add. However, if seniors can't get the healthcare they need, we will lose this valuable resource to other areas of the US where healthcare under Medicare is more available.
Why should we be concerned? Well, the Alaska Commission on Aging says the number of Alaskans age 65 and older grew 49.6 per cent over the last decade, a faster rate than in any other state. The Commission predicts the number of people in this age group to double in the next 15 years. And, the fastest growing age group in Alaska are those over 85.
Our state's disproportionately large baby-boomer population contributes much to Alaska, but Medicare rules are making retirement here for many of them impossible. Alaskans, particularly in Anchorage, cannot find primary care physicians to see them because Medicare reimbursement won't cover doctors' costs. Patient access to hospital services, diagnostics procedures, surgeries, and specialist care all start with a primary care referral.
Prices charged for healthcare services vary widely across the U.S. Local fees, often referred to as UCR (usual and customary rates), are what insurance companies use to determine what they will pay. If a doctor charges more, the insurance company will generally only pay a preset percentage of UCR. The patient is billed for the balance even if it is more than the patient's preset percentage of the total charge - a practice called "balance billing".
Medicare is different. Through a complex formula, Medicare determines regional maximum allowable charges. Typically Medicare reimburses the doctor 80 per cent and the patient is responsible for 20 per cent of the maximum allowable charge. But Medicare's payment for primary care services in Alaska is so low private physicians lose money every time they see a patient covered under this insurance.
Both doctor and patient are caught in a Catch 22. If a patient wishes to pay the "balance bill" so their doctor can afford to see them, Medicare won't pay the 80 per cent of the maximum allowable charge they owe the physician. The doctor loses even more and the patient can't resolve the problem simply by paying the relatively small differential.
Our past Congressional delegations have successfully convinced Medicare to increase the geographic differential for Alaska, but this only works as long as they can keep the pressure up. Medicare pays community health centers at a higher reimbursement rate than private doctors. As a result many Anchorage seniors receive their primary care services from the Anchorage Neighborhood Health Services. And other medical professionals are working to develop private clinical models that may work under Medicare's higher clinical reimbursement schedule.
But many seniors want to continue seeing the doctor who cared for them prior to reaching age 65. These physicians know their patients, understand their medical histories and often have had relationships lasting decades. Many seniors would willingly pay the differential between the Medicare maximum allowable and UCR to retain their family doctor, but are unable to due to Medicare's prohibition on balance billing. If you doubt this consider that several doctors are currently contracting directly with their patients over age 65 at a reduced fee, but a rate higher than what Medicare will pay, and the patient is responsible for the entire charge.
Alaska's seniors are an invaluable resource to our state. They are the cornerstone to today's multigenerational Alaska.  We shouldn't allow the current Medicare structure and the resulting loss in primary health care to drive them from their home--Alaska. It's time to consider an Alaskan exemption from Medicare's "balance billing" penalty. This would be the quickest, longest lasting way to retain this critical Alaska resource, our seniors. Let's work together as Alaskans to create our own solutions and ensure a bright future for all our people.
Bob Poe is a candidate for Governor in 2010. He has had a 28 year career in both the private and public sectors. While Alaska Commissioner of Administration he oversaw the Division of Senior Services and the Alaska Pioneer Homes.