By SUZANNE DOWNING
July 8, 2026 – While much of the country is seeing another round of steep Obamacare premium increases, Alaska stands out as the rare exception.
In neighboring Washington, private company health insurers received approval for an average 21% increase in Affordable Care Act individual market premiums for 2026.
Now, those insurers are back seeking an even larger average increase of 22.4% for 2027, among the highest early requests in the nation.
Alaska, by contrast, posted an average decrease of about 1.1% in 2026, making it the only state where individual market premiums actually fell while most of the country experienced double-digit increases.
But Alaska’s apparent good fortune isn’t simply the result of a healthier insurance market. It reflects a deliberate government intervention that shifts much of the financial risk away from insurers through a taxpayer-backed reinsurance program. The government is using taxpayer dollars to pay these insurance companies through the back door.
The contrast illustrates two very different approaches to keeping Obamacare afloat.
Washington’s Office of the Insurance Commissioner approved the 2026 increases after insurers cited rising medical costs, increased use of health care services, hospital consolidation, inflation, expensive prescription drugs such as GLP-1 weight-loss medications, and uncertainty following the expiration of enhanced federal premium tax credits that had subsidized millions of consumers during the pandemic years.
Those enhanced subsidies expired at the end of 2025.
State officials estimate Washington families purchasing coverage without employer insurance are paying roughly $1,548 more per year because of the approved increases. Exchange enrollment has already declined by about 13%, and officials projected that as many as 80,000 residents could ultimately drop coverage because of higher costs.
For 2027, 13 Washington insurers have requested another average increase of 22.4%. Several insurers are seeking hikes approaching or exceeding 25%, including Coordinated Care Corporation at 27.8%, Molina Healthcare at 25.8%, and Community Health Plan of Washington at 24.5%.
Washington Insurance Commissioner Patty Kuderer has said the requests will undergo extensive review before final decisions are made later this year.
Alaska tells a different story.
Approved 2026 premium changes ranged from a 1.2% increase for Moda Assurance Company to a 3.4% decrease for Premera Blue Cross Blue Shield of Alaska, producing an overall statewide decline.
The primary reason is Alaska’s Reinsurance Program, first established in 2018 and extended through 2027 under a federal Section 1332 waiver.
The program removes much of the financial risk associated with the most expensive patients by reimbursing insurers for high-cost claims. That allows insurers to file lower premiums than they otherwise would need to charge.
In practical terms, the state-created reinsurance pool is socialism. Taxpayers absorb some of the largest medical expenses, protecting insurance companies from losses.
The program is funded through a combination of redirected state premium tax revenue and federal “pass-through” funding. Because lower premiums reduce the amount the federal government pays in premium tax credits, Washington sends much of those savings back to Alaska to help finance the program.
For the 2025 and 2026 plan years, the Alaska Reinsurance Program has been funded at approximately $140 million annually.
The full $140 million is not paid directly from the state’s general fund. Instead, funding comes primarily from a portion of Alaska’s insurance premium taxes that would otherwise flow to state government, combined with federal pass-through dollars generated under the Section 1332 waiver.
The result is that insurers can charge lower premiums than they otherwise would in Alaska’s small and expensive health insurance market.
Without the reinsurance program, actuarial studies have estimated Alaska premiums would likely be 20% to 38% higher than they are today.
That makes Alaska something of an outlier nationally. Whether Alaska can continue avoiding those pressures after its current reinsurance waiver expires in 2027 remains an open question.
