Clock ticks toward adjournment of 2025 legislative session; health insurance reform could be key accomplishment

The state Legislature has about a week left in its 2025 regular session. As the clock ticks down toward the required midnight, May 21, legislators are hustling to get priority legislation passed.

Most important, that includes the state budget, which is the only action required of the Legislature each year. The state House and Senate have essentially finished work on the state operating budget, which mostly pays for state agencies and programs, and the capital budget, mostly for construction.

Money is very tight this year, and the capital budget this year is mostly money required for a 10% match for federal highway and airport money.

The operating budget is “bare bones,” with little new program money except for summer firefighting, with big fire season predicted because of dry conditions.

The state’s financial position seemed to worsen between Gov. Mike Dunleavy’s submission of his Fiscal Year 2926 budget in December and the House and Senate budget approvals in the last two weeks. Crude oil prices went down unexpectedly due to an oversupply of oil and President Donald Trump’s actions on tariffs, which raised worries for the economy.

The governor had proposed a series of modest increases in some programs, but the Legislature had to take these out because of the worsening revenue outlook.

Lawmakers have to give the governor a balanced budget so he can sign it by June 30. If the budget doesn’t balance with spending matched by revenues or funds from savings accounts the governor cannot sign it. If there is no budget signed by July 1, the start of Fiscal Year 2026, the state government cannot operate legally.

At this point a House-Senate conference committee will meet to reconcile versions of the budget passed by either body. There is a push to have a balanced spending plan that does not require a draw from the state’s main savings account, the Constitutional Budget Reserve, or CBR. About $2.8 billion is in the CBR but House and Senate leaders are loathe to draw it down because a healthy reserve is needed in case of a major emergency, such as an earthquake.

One of variables in the budget, however, is the Permanent Fund Dividend, or PFD.The House had a $1,400 PFD for 2025 in its plan but the Senate had to reduce it to $1,000 because the state’s financial situation had worsened.

It’s felt that the $1,000 dividend may prevail in the end because anything bigger might throw the budget into a deficit absent a draw on savings, which few lawmakers feel is prudent.

While the state’s financial position looks precarious, one of the bright spots for the Legislature in 2025 is in health care. If it makes it through to final passage by May 21, Senate Bill 133 will be a bright spot and possibly the most important accomplishment for the Legislature in its 2025 session.

The bill deals with approvals by insurance companies for payment for medical procedures, setting timelines for health insurers to approve coverage. Delays in approvals have become a serious problem recently for health care providers and a source of anxiety for patients. Sen. Cathy Giessel, R-Anch., is the sponsor. A similar bill was near passage last session when Premera Blue Cross, the state’s major health insurer, threatened to pull out of Alaska if the bill passed claiming defects in the legislation.

After that happened the Alaska Hospital and Health Care Association and the state Division of Insurance began developing a new bill. Last fall health insurers including Premera came on board with support.

SB 133 received final Senate approval last Monday, May 12, and the bill has been scheduled for a heaing in the House Labor and Commerce Committee where the House version, HB 144 by Rep. Justin Ruffridge, R-Soldotna, is under consideration.

Given its broad support by health care providers and now insurance companies, SB 133 can be expected to move quickly in the state House. The major uncertainty is whether the bill might get caught in the usual end-of-session logjam of legislation. If that happens work would resume in January, when the Legislature will convene its 2026 session.

Since a Legislature formally spans two years bills introduced in the first session are still alive for the second session, in this case the 2026 session. Even as the 2025 session approaches its end a lot of committee work is still underway and new bills are even being introduced. Most of this is to position legislation for 2026, however.